ADM CEO Says Precision Fermentation Is 'A Cost' Today, Meaningful In Years Five To 10
Juan Luciano gave analysts a long timeline for the new protein business as ADM raised 2026 adjusted EPS guidance to $5.50 to $5.80.
ADM Chair and CEO Juan Luciano told analysts on the company's Tuesday earnings call that precision fermentation, its new bet on making proteins through fermentation, is for now a drain: "today, this opportunity is a cost." The admission came as ADM, the crop processor, raised its 2026 adjusted earnings guidance to $5.50 to $5.80 a share from $5.15 to $5.60, its third increase this year.
A timeline measured in years
Asked by an analyst about the size of the market, how much ADM might spend and when it would pay off, Luciano gave no market-size or spending figure. He gave a schedule. "Over the next two or three years, it will become profitable," he said, and "probably between year five and year 10, it will become meaningful, hopefully, for ADM." That, he said, is the planning horizon.
The analyst also asked whether ADM's trading multiple would improve as it invests in more downstream applications. Luciano did not address that directly.
To limit the risk, Luciano said, ADM is lining up sponsoring customers so that any finishing units it has to build are backed by demand. Examples he cited were egg replacement, lamb-style meat alternatives for pet food and a whey protein alternative.
Owned plants, cheap dextrose
ADM, which buys crops from farmers and processes them into ingredients and products for food, feed, fuel and industry, says the venture sits in its carbohydrate solutions segment. Luciano named three advantages: access to commercial-scale dextrose supply, fermentation assets ADM already owns, and an integrated chain of research, supply and customers. The owned plants, he said, let it scale without the time and capital of new greenfield projects.
The company is building customers in pet food, where it is investing in animal-free chicken and lamb alternatives, and is moving toward commercial-scale production of an egg-white alternative. For whey, which he said is in short supply, ADM is working with a technology partner.
Luciano said ADM will show other growth platforms on future calls. Natural colors, the subject of last quarter's call, keeps its target of $80 million to $100 million of annual operating profit uplift over time.
Guidance up, shares down
Third-quarter adjusted earnings were $1.77 a share, with total segment operating profit of $1.4 billion, up 64% from a year earlier. Carbohydrate solutions earned $470 million, up 40%, helped by ethanol margins and policy incentives. ADM also raised its expected net benefit from the 45Z clean-fuel tax credit to about $350 million for 2026, from about $250 million.
ADM shares fell 4.43% to $72.41 in Tuesday trading as of 9:46 a.m. ET, for a market value of $36.5 billion.
In another new line of business, Luciano said ADM's Columbus, Nebraska, plant can capture and permanently store more than 800,000 tons a year of biogenic carbon dioxide for the voluntary carbon removal market. The company expects its first credits around the end of 2026.
Luciano declined to put a number on 2027 carbon removal revenue, calling the market nascent, and said the first Columbus credits should arrive around the end of 2026.
Sources
- Archer Daniels Midland 3Q Profit Jumps on Boost from U.S. Biofuels Policy — MarketWatch
- Archer Daniels Midland (ADM) Q3 Earnings Top Estimates — Yahoo Finance
- Archer-Daniels-Midland reports mixed Q3 results; raises FY26 outlook | Seeking Alpha — seekingalpha.com
- ADM to Release Third Quarter Financial Results on November 3, 2026 – Company Announcement - FT.com — Financial Times
- ADM: Q3 Earnings Snapshot | wfaa.com — Associated Press
