DECATUR, Illinois (AP) -- Archer Daniels Midland's first-quarter net income dropped 31 percent, pressured by rising commodity prices and a shifting supply of crops.

Profit slid despite very strong volume and revenue.

The corn and soybean processor, which also makes ethanol, posted net income of $345 million, or 54 cents per share. A year ago, net income was $496 million, or 77 cents per share.

This quarter's performance fell below the 75 cents per share that analysts polled by Thomson Reuters expected.

Archer Daniels' stock slid $1.75, or 5.2 percent, to $31.64 in premarket trading. Over the past year, the shares have traded between $24.22 and $34.03.

Rising commodity prices increased Archer Daniels' LIFO inventory valuation reserves by $123 million during the quarter.

LIFO, or last-in-first-out, refers to a method of accounting for inventory that assumes a company sells its newest inventory first.

The company's agricultural services division also weighed on results, with its operating profit falling to $132 million from $175 million.

"Agricultural services results were impacted by crop supply shifts early in the quarter," Chairman and CEO Patricia Woertz said on Tuesday.

Archer Daniels cited drought conditions and government actions in the Black Sea region for shifting supply.

Operating profit for the oilseeds processing segment increased to $308 million from $284 million, and climbed to $341 million from $188 million at the corn processing unit on better ethanol margins and volumes.

"The ADM team performed solidly in both corn and oilseeds with both businesses well positioned to meet demand," Woertz said.

Revenue for the period ended Sept. 30 rose 13 percent to $16.8 billion from $14.92 billion.

That beat the $15.66 billion in revenue analysts expected.

The company based in Decatur, Ill. is in the midst of a management shuffle, which Woertz said last week was part of its initiative to grow shareholder value, earnings and the size of the company. Ray Young, a former General Motors Corp. executive, will assume the role of chief financial officer effective Dec. 1. He takes over for Steven Mills, who was named senior executive vice president of performance and growth.

Archer Daniels Midland Co. grows, ships and processes grains. More than 240 ADM processing plants convert corn, oilseeds, wheat and cocoa into products for food, animal feed, chemical and energy uses.

Copyright 2010 The AP.