Archer Daniels Midland 2007 Annual Report Download - page 18

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10
Item 1. BUSINESS (Continued)
The public may read and copy any materials filed by the Company with the SEC at the SEC’s Public Reference
Room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the
Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site which
contains reports, proxy and information statements, and other information regarding issuers that file information
electronically with the SEC. The SEC’s Internet address is http://www.sec.gov.
Item 1A. RISK FACTORS
The availability and price of the agricultural commodities and agricultural commodity products the Company
produces and merchandises can be affected by weather, disease, government programs, and various other
factors beyond the Company’s control and could adversely affect the Company’s operating results.
The availability and price of agricultural commodities are subject to wide fluctuations due to unpredictable factors
such as weather, plantings, government (domestic and foreign) farm programs and policies, changes in global
demand resulting from population growth and changes in standards of living, and global production of similar and
competitive crops. These factors have historically caused volatility in the agricultural commodities industry and,
consequently, in the Company’s operating results. Reduced supply of agricultural commodities due to weather-
related factors or other reasons could adversely affect the Company’s profitability by increasing the cost of raw
materials used in the Company’s agricultural processing operations. Reduced supplies of agricultural commodities
could also limit the Company’s ability to procure, transport, store, process, and merchandise agricultural
commodities in an efficient manner which could adversely affect the Company’s profitability. In addition, the
availability and price of agricultural commodities can be affected by other factors, such as plant disease, which can
result in crop failures and reduced harvests.
Also, with respect to prices, to the extent production capacity is added within the agricultural processing industry,
the disruption to the balance of supply and demand may result in downward pressure on the relevant product prices,
thereby adversely affecting revenues and operating results.
Fluctuations in energy prices could adversely affect the Company’s operating results.
The Company’s operating costs and selling prices of certain finished products are sensitive to changes in energy
prices. The Company’s processing plants are powered principally by electricity, natural gas, and coal. The
Company’s transportation operations are dependent upon diesel fuel and other petroleum products. Significant
increases in the cost of these items could adversely affect the Company’s production costs and operating results.
The Company has certain finished products, such as ethanol and biodiesel, which are closely related to, or may be
substituted for, petroleum products. Therefore, the selling prices of ethanol and biodiesel relate to the selling prices
of unleaded gasoline and diesel fuel. A significant decrease in the price of unleaded gasoline or diesel fuel could
result in a significant decrease in the selling price of the Company’s ethanol and biodiesel and could adversely
affect the Company’s revenues and operating results.
The Company is subject to economic downturns, political instability and other risks of doing business globally
which could adversely affect the Company’s operating results.
The Company conducts its business and has substantial assets located in many countries and geographic areas.
The Company’s operations are principally in developed countries in the United States, Europe, and South
America but the Company also operates in, or plans to expand or develop its business in, emerging market areas
such as Asia. Both developed and emerging market areas are subject to economic downturns and emerging
market areas could be subject to more volatile economic, political and market conditions. Such economic
downturns and volatile conditions may have a negative impact on the Company’s ability to execute its business
strategies and on its operating results.