1. brittany anderson

2. cargill, inc. largest privately owned u.s. corporation owned by two minneapolis based families- the cargills and the macmillans worldwide annual sales: approx $12.6 billion

3. meet the cargills william w. cargill – scottish presbyterian – migrated to us in 1830’s – became a captain in the merchant marines – left the shipping business in 1857, moved to wisconsin to become a farmer – three sons began trading grains and built grain elevators and storage units

4. history cargill was often the only grain elevator at major railroad stops – Farmers were forced to accept prices offered by the company – often grail elevator and railway owners conspired to fix prices – cargill’s historian admits that cargill monopolized the grain trade business in south dakota and minnesota and also held other trading positions in wisconsin, iowa, and north dakota finances cargill obtained loans from many small midwestern banks – will made friends with a prominent milwaukee banker who “backed his friend [multiple times]…to their mutual benefit” formed partnerships with other grain merchants – when others would go under, cargill would purchase their partnership to result in complete owership

5. saved by infusion 1906 - william cargill could not manage the overextended business in the face of the economic recession 1909 - most of the company’s properties were placed in receivership cargill appeared to be on the brink of dissolution 1895 – john h. macmillan, member of a prominent business family in lacrosse, wisconsin married into the cargill family – persuaded credit company to allow management of the company – introduced the macmillan -cargill partnership, which forged the destiny of the midwestern grain company

6. expansion 1920’s – Established direct sales offices in the east as well as sales offices in principal european grain centers and argentina 1930’s- – 1932: obtained control of new grain export elevator in albany, new york – mid-1930’s: moved into the chicago market – 1938: chicago board of trade filed suit against cargill for manipulating corn market prices. cargill filed countersuit, claiming federal government needed to “clean up” the board cargill lost legal battle, but won economic war. wwii – maritime hostilities ended private direct exports – government regulated domestic grain market – established feed milling and vegetable processing divisions, which moved into domestic manufacturing – also built tanks for the military postwar – us became principal food manufacturer, while the rest of the world was in disarray – main us agricultural exports: wheat and flour 1944: 48 million bushels 1948: 503 million bushels

7. teaching “people to eat wheat, who didn’t eat it before” western european nations agriculturally rose after korean war began 1954: us government “forged perfect instrument for expansion” public law 480 – enabled companies to directly increase export sales – when a market in a country was opened, direct commercial sales were much easier – enabled countries to gain entrance to a market at the smallest expense possible commodity credit corporation (ccc) – gave one to three year loans to foreign governments to purchase its surplus grain reserves – cargill was the first major firm to take advantage of the ccc barter program – strategically exchanged grain for war materials

8. 1950’s- – cargill operates at three main points of collection and distribution of grain: local elevator where farmer sells grain subterminals & terminals at the major transportation crossroads – subterminals used to bypass smaller country elevators, which are often under control of local coops and located in small communities large export elevators located in major u.s. ports

10. ccc accumulation of grain surpluses caused the operation of storage facilities to play a major role in marketing strategies – the federal government controlled these surpluses by purchasing excess agricultural production to secure prices from falling cargill stored CCC grain in their facilities in return for government storage payments 1958-1968: cargill received $76 million for storing grain – companies purchased from the ccc reserves when grain was necessary to cover their own marketing needs

11. transportation waterways late 1940’s: cargill opened a new route to the mississippi river by opening the minnesota river channel – allowed for the bypass of minneapolis, decreasing costs 1950’s: began using inland waterways to transport through shipping subsidiary, cargo carriers – made use of transportation on the missouri, ohio, tennessee, illinois and mississippi rivers railway 1960’s: pressured interstate commerce commission to restructure railway rates and regulations to make the rail more economical for grain companies – regulations were altered so companies could take control of the whole train at special rates 1968: cargill conceived the concept of rent-a-train (rat) – a company could rent the engine, crew, and railroad right of way for an extended amount of time 1972: companies used control of railway to hold down the price they paid for various grains – lack of shipping alternatives caused local farmers and merchants to sell at the dictated price.

12. financing the empire “exporting companies must have sufficient funds to cover the costs of carrying these large quantities of grain.” not even cargill, known as the “cadillac of the grain trade,” does not have sufficent funds to cover the capital necessary to finance the seasonal grain inventories – maintain credit lines with 40+ banks, including eight of the ten largest u.s. commercial banks draws on these credit lines to pay for its purchases three chicago based banks are important to financing the grain business – continental bank of ilinois – harris savings and trust – first national bank of chicago chase manhattan bank – 1933: john peterson leaves chase to join cargill as chief financial officer – no major moves are made without the consultation of chase – one cargill official noted that hardly a month goes by without a meeting between executives at chase and cargill – cargill executives deny that chase calls the shots in the business decisions

13. not all financial needs are met by lines of credit – when cargill builds fixed assests such as grain elevators and storage bins, they call upon insurance companies for long term loans – prudential – metropolitan life – john hancock collect savings of u.s. workers to relend to corporate interests

14. public funds sustain the empire 1973: duluth- minnesota port authority and cargill announced a $15 million project for constructing new port facilities – cargill did not foot a cent of the bill cargill controls most of the flow of grain on the railway system – without owning a single train car received millions of dollars in storage payments for holding ccc grains – international trade financed by pl 480 cargill is “a stunning example of modern corporate capitalism where small amounts of capital are used to control vast financial and commercial empires.”

15. “the sun never sets on cargill’s corn” 1929: first trading offices established in europe today: international operations penetrate every corner of the globe – 140 affiliates and subsidaries – international trading operations directed by tradax a subsidiary with headquarters in geneva performs the same merchandising functions abroad that cargill does in the states cargill buys and exports grains in other agricultural producing countries – argentina: leader in exporting wheat, barley, maize – canada: maneuvered “free market” by purchsing national grain company, built large regional terminal elevators – phillipines: heavy trader in copra and sugar, taking advantage of cheap labor force – western europe: one of five grain companies controlling the market – japan: one of the world’s leading grain importers – latin america: much more susceptible to bribery in arranging grain deals

16. a multinational industrial corporation 1960’s: cargill’s expansion into foreign manufacturing was built on its u.s. Industrial base and foreign marketing network – by 1962, wholly owned nutrena Largest feed producer in the u.s. Operated 27 domestic feed mills Owned 14 vegetable oil processing plants expansion into agribusiness: – 1965: purchased shaver poultry breeding farms A candadian firm shipping breeding stock abroad peru: first international investment – 1960: became major international distributor of peruvian fishmeal – 1963: purchase of a large fishmeal plant and fishing fleet spain: first soybean processing plant 1964: acquired hens company – feed manufacturing company – belgium, west germany, france within a decade, cargill became a major player in the vegetable oil and animal feed industries of western europe.

17. expansion into agribusiness: – 1965: purchased shaver poultry breeding farms a candadian firm shipping breeding stock abroad today, uses shaver to form an integrated pacakge of feed mills and poultry breeding stock – rapidly expanded feed and food processing operations established subsidaries in el salvador, guatemala, phillipines, argentina, brazil, pakistan, taiwan, south korea 1968: cargill proposed an integrated poultry operation in korea – included breeding farm, feed processing plant, processing unit – received 95% of funding from u.s. government loan for $500,000 under pl 480 korea cargill was a supplier to u.s. military forces during and after the korean war

18. korea cargill 1968: cargill proposed an integrated poultry operation in south korea – included breeding farm, feed processing plant, processing unit – received 95% of funding from u.s. government Loan for $500,000 under pl 480 korean government restricted use of limited foreign exchange – made it difficult to import feed grains and breeding stock korea cargill was a supplier to u.s. military forces during and after the korean war many employees are veterans of the korean war – “They have an awareness of danger, a familiarity with hardship and an eagerness to face the future that is inevitable.” –e.c. fuller – cargill dissatsified with profits in korea turned to us government – suggested that korean gov to give special consideration to poultry and livestock industries – korean government refused turned to u.s. once again – asked to defer pl 480 loans

19. south america argentina: – involved since 1929 – owns and operates export facilities – produces hybrid corn seeds – 1979: announced $18 investment in a linseed oil and sunflower oil processing plant brazil: – attempted to gain foothold in 1947 and 1950’s – cargill agricola established in 1965 by 1970’s produced hybrid seeds, manufactured seeds, participated in grain merchandising and poultry farming – became one of brazils largest soybean producers built one of the world’s most modern soybean processing facilities in ponta grossa – overseas private investment corporation lent $2.5 million – eximbank lent $1 million

20. cargill and the state federal and state governments fund port facilities, grant tax concessions for new capital investments, maintain a legal and financial system essential to the survival of cargill – 1960’s: formed a public policy committee formulates positions on key issues establishes guidelines for company representatives who speak on behalf of the company ideologies do not stand in the way of business interests – twenty-odd people that run cargill are “rock-ribbed republicans” – gave money to hubert humphrey for “every campaign since he ran for mayor of minneapolis” “it’s a lot cheaper to give humphrey a few thousand dollars than to fund the republican party” – walter mondale played a key role in the u.s. decision to purchase grain company contracts with the soviet union when an embargo was announced – Cargill was the largest benficiary

21. cargill in office richard nixon 1962:loses california’s gubernatorial seat; goes to work for wall street law firm mudge, stern, baldwin & todd – one of the largest corporate clients: cargill gained cargill’s support in 1968 and 1972 william pearce – vp of cargill – drafted williams comission report drew up the blueprint of the u.s. dept. of agriculture in 1970’s served as deputy special trade rep, with rank of ambassador structural corruption – personnel go from the grain companies to work for the usda or vice versa cargill is a member of the us-ussr trade and economic council – retiring president serves as director of national council for us- china trade

22. profiteering “for the past five years, cargill has consistently earned profits in excess of 20 to 25 percent.” cargill uses control of railways and elevators to exploit farmers – no alternative to moving grains – forced to accept price discounts of 10 to 25 and sometimes $.50 a bushel 1973: assets increased from $246 million to $352 million – 43% return on assets – $107.8 million

23. future of grain trade largest grain exporter in four of the five leading exporting nations: – argentina, united states, canada and france – it is unclear who is dominant in australia, but cargill is a major force – cargill hopes to increase market share from 25% to 35% investing $150 million/year in grain handling facilities

24. spreading the profit base/ the cargill future leslie salt and mbpxl corporation – nation’s second largest meat packer Sales of $ 1+ billion summit national holding company – insurance firm aenco, co. – solid waste processing center c. tennant & sons – Large metals international trading firm north star steel co. – Manufaturer of steel sheet rolls established many subsidaries through cargill leasing inc. – purchased various small businesses around the world approximately half of cargill’s sales now come from activites other than grain trading cargill executives are uneasy about how long the government will stay out of the grain business – “i see no way to keep the government out of the market if we go through another bout of exploding prices.” cargill shrouds itself in a veil of secrecy to prevent such an event – publicity about the company’s operations can only increase public hostility

25. “ few facets of modern life are unaffected or unreached by cargill today” agriculture: – we buy, process and distribute grain, oilseeds and other commodities to makers of food and animal nutrition products. We also provide crop and livestock producers with products and services. food: – we provide food and beverage manufacturers, foodservice companies and retailers with high-quality ingredients, meat and poultry products, and health-promoting ingredients and ingredient systems. financial: – we provide our agricultural, food, financial and energy customers around the world with risk management and financial solutions. industrial: – cargill serves industrial users of energy, salt, starch and steel products. we also develop and market sustainable products made from agricultural feedstocks.