Mergers May Not Solve Grain Company Woes

(Dow Jones) -- Deal speculation has gripped the agricultural industry, with Archer Daniels Midland and Glencore both reported over the past year to have approached competitor Bunge about a deal. Bunge CEO Soren Schroder on the company's 4Q earnings call declines to address those reports, but does tell analysts that consolidation on its own won't be the answer to years-long struggles among agricultural commodity traders. Following five successive bumper crops in North America and another potential record South American harvest, "it's more how you operate that determines your profitability," versus sheer scale, Schroder says. "The entire industry and certainly ourselves are trying to adjust to a new environment."