Archer Daniels Midland and Cargill both confirm they have reached an agreement to exchange ownership of some grain elevator facilities in Indiana and Illinois. The swap would increase efficiencies and fit both companies’ long-term strategies.

Large U.S. grain merchants Cargill and Archer Daniels Midland have reached a deal to swap some of their grain elevators in the U.S. Midwest in a deal expected to close later this summer. The deal includes a sale by Cargill of its Mount Vernon and Evansville, Indiana, elevators on the Ohio River to ADM. In return, ADM will sell its Beardstown, Naples and Keithsburg, Illinois, elevators along the Illinois River to Cargill, representatives from both companies said. ADM and Cargill did not release financial terms of the deal. Both companies, among the largest grain merchants in the world, said the swap would increase efficiencies and fit both companies’ long-term strategies. ADM and Cargill have been cutting costs and restructuring operations in recent years as a global glut of grain has squeezed margins. A trade war between the United States and China has reduced U.S. agricultural exports to the world’s top soybean buyer and eroded profits for the global commodities traders. “We regularly evaluate our portfolio to ensure that our businesses and assets best fit our strategy to maximize long-term returns. Cargill’s Mount Vernon and Evansville, Indiana, elevators are a great fit for our origination network,” ADM spokeswoman Jackie Anderson said in an emailed statement to Reuters. The facilities buy grain and soybeans and load river barges bound for the Gulf Coast, home to some of the nation’s largest bulk grain export terminals. The deals would effectively reduce the number of buyers competing for farmers’ crops in some areas. In Evansville, ADM already operates a barge-loading elevator less than a mile from the one it is buying from Cargill. The Keithsburg elevator Cargill is buying is less than 10 miles (16 km) from another facility it owns in New Boston, Illinois. “Because we believe the competition in this area remains very strong ... we don’t see any competition concerns,” said Cargill spokeswoman Victoria Bagley, adding that closing the transaction was “not contingent on any competition review.” Cargill reported a 41% drop in fiscal fourth-quarter profit, citing negative effects from the U.S.-China trade war and adverse spring weather in the United States. Cargill’s animal nutrition and protein segment posted a lower year-on-year profit for the third time in four quarters as poor weather disrupted U.S. Midwest cattle shipments and reduced demand for beef for outdoor grilling. Reduced hog feed demand in China, where a deadly hog disease called African swine fever has decimated the industry, further dampened results. ADM is due to report second-quarter results on Aug. 1. REUTERS