Monday, December 5, 2011

Higher Commdities Prices Cause 2,000 Layoffs at Cargill

Cargill, Inc. is one of the giant American agricultural conglomerates that have such a poor reputation among people who actually give a shit how the stuff they put in their mouths is grown/raised/processed/produced/packaged. There are few industries less accountable these days than big agribusiness. Nevertheless, per this report from CBS News, ordinarily I hate seeing anyone lose their jobs:
Food-industry conglomerate Cargill Inc. said Friday it will cut up to 2,000 jobs to reduce expenses in a weak economy.

Cargill, which has 138,000 employees, said most of the cuts will occur in the next six months.
The announcement, of course, was accompanied by the usual Corporate FlackSpeak:
"These are difficult decisions but are necessary to better position the company for continued growth," said spokesman Mike Fernandez. The company said each business unit made recommendations for reductions, and the cuts were not uniform across all segments.
Why don't any of these business stenographers reporters ever call out any of these assholes by asking exactly how it is possible for a company to grow while laying off its employees. Just once, I'd like to see them ask for an explanation. Just once. Fucking humor me. It's as if they can get up and assert that two plus two equals five and everyone just shrugs like it makes sense. Do they really learn this shit in business school or something?

Anyway, the article didn't bore down into the root cause of Cargill's problems until near the end:
Cargill doesn't report financial results in the same detail as publicly traded companies, but it said in October that fiscal first-quarter earnings fell 66 percent despite a 34 percent increase in revenue. The company was hurt by volatile commodity prices that hurt its trading business, and the sale of a majority stake in a fertilizer maker also reduced profit.
Wow, let me take off my shoes and socks for a minute while I contemplate the math on this one. Revenues were UP by one-third but earnings were DOWN by two-thirds, huh? That sounds like a shit-pot load of inflation there to me. If it walks like a duck, flies like a duck and quacks like a's gonna cost you a lot more to cook it and put it on your table at Christmastime this year. And fuck the reporter who wrote this article referring to "volatile" commodities prices when it should be pretty clear that whatever short-term fluctuations there may have been, they clearly were generally headed in one direction: up. Corporate America does not need any additional help concealing the truth from people.

Remember this example as the Federal Reserve and the other central banks keep playing their games with the world's currencies trying to prop up the creaking facade of business as usual. More "liquidity" (another Orwellian term I hate) means MORE commodity inflation, which means MORE cost pressure on soulless corporations like Cargill, which means MORE layoffs. Until the day finally comes when they "prime the pump" only to have the pressure blow the whole stinking edifice up in their faces.


  1. We are coming up on our one-year anniversary of US national average gasoline price over $3/gallon, December 20, 2010.

    Expect major layoffs as US refineries shut down.

  2. @babystrangeloop - I was thinking about that just the other day. Welcome to the "new normal."