1. Harvest of Profits: The World Empire of Cargill, Inc.
By Roger Burbach and Patricia Flynn

2. About Cargill
Cargill, Inc. is the largest privately owned US corporation
Started by two Minneapolis-based families: the Cargills and the MacMillans who own 85% of the company’s stock
If Cargill were placed on a list of the 500 leading public industrial corporations, it would rank 14th
As of May 31, 1979, Cargill’s annual sales stood at $12.6 billion making it the largest grain trader in the world

3. Cargill’s Corporate Origins
In the 1880s Cargill operated along major railways arteries in North and South Dakota, Iowa, Minnesota and Wisconsin
By 1900, Cargill’s profits allowed the family to expand into new, and unrelated, areas
1906 began the downturn for the industry where Cargill nearly went bankrupt. However, they managed to recover and had full done so by the 1920s

4. Expansion
Cargill’s use of cut-throat business practices and its rapid pace of expansion upset many of the established grain trading interests
By the 1930s, Cargill joined the growing list of U.S. companies with foreign operations
When WWII happened, Cargill profited by moving into domestic manufacturing and building tankers
During the postwar period the U.S. became the world’s principal supplier of wheat and flour. The exports jumped from 48 million bushels in 1944 to 503 million in 1948 which led to an even larger boom for Cargill

5. Cargill’s Domestic Structure
By the 1950s Cargill owned three important things:
Local elevators where farmers sold their grain
Terminals at the major transportation crossroads
Large export elevators located in major U.S. ports
Cargill’s regional terminals favor the large-scale farmers who can buy or contract for trailer trucks to haul their grain long distances to the terminals where they receive premium prices that compensate for the shipping costs

6. Cargill’s Structure Cont.
In some cases, Cargill has used its control over railroads and elevator facilities to exploit the farmers. Cargill, railway operators and elevator owners would often conspire to fix grain prices where farmers were forced to accept price discounts of up to 50 cents on each bushel of grain sold to Cargill
During the 1950s-1960s Cargill also used these terminals to store the grain surplus the U.S. government purchased through the CCC to keep the prices from falling. From , Cargill received over $76 million from the government for storing the grain.

7. What is Public Law 480?
Public Law 480 is a funding avenue by which U.S.’s food can be used for overseas aid to:
Combat world hunger and malnutrition
Promote sustainable development (including agriculture)
Expand international trade
Develop and expand the export market for U.S. agricultural commodities and products
Foster private enterprise

8. PL 480 and Cargill
PL 480 served as a two-pronged instrument in Cargill’s market expansion because it enabled the company to directly increase its export sales
Cargill used PL 480 to “whet the appetites” of many countries and with PL 480 “we taught people to eat wheat who didn’t eat it before”
Once they had opened up the market in a given country, it was much easier for them to follow up with direct commercial sales.

9. Financial Backing
Financial backing played a crucial role in the company’s growth
Cargill maintains credit lines with over forty banks and knows how to use the government plans to their benefit
Example: in 1973 the Duluth Minnesota Port Authority and Cargill announced a $15 million project for constructing a new port facility. $13.5 million came from revenue bonds backed by the Port Authority while the remaining flowed from federal and state programs. Cargill didn’t put up any money for the project.

10. Cargill and the State
Cargill loudly proclaims the need for free trade and abhors government regulation, but it would be virtually impossible for the worlds largest grain traders to operate without the support of the governmental institutions and organizations
The companies realize this which is why “The grain companies are always at the elbow of people in the USDA”, assuring that they will have the legislation they need to continue their operations

11. Profiteering and the Future of the Grain Trade
Today it is the largest private grain exporter in four of the world’s five leading grain exporting nations (US, Canada, France and Argentina). In the fifth (Australia) it is unclear which company is dominant, although we know that Cargill is a major force in that country’s grain trade
Not only is Cargill involved in exporting US grain, it also buys and exports grain in the other major agricultural producing nations. Cargill is Argentina’s leading exporter of wheat, barley, maize, and other grains and through Tradax is the leading exporter of grain in France.

12. In 2008…
“Cargill is an international provider of food, agricultural and risk management products and services with 158,000 employees in 66 countries”
“With annual sales of approximately $75 billion and growing, we’re among the world’s largest companies. We sell thousands of products, operate hundreds of businesses and partner with dozens of other companies, many of whom are leaders in their industries”

13. Conclusion
Cargill knows how to use both public and private funds to sustain its commercial empire
Examples:
Cargill controls much of the grain flow on the railway system without owning a single locomotive
A port in Duluth was built under their supervision without Cargill having to put down any money
It received millions of dollars from the government paying storage fees
Much of Cargill’s international trade is financed by PL 480 and other government lending programs

14. Conclusion Cont.
Cargill realizes that the agricultural policies of the US government mean widely swinging markets with boom and bust periods in agriculture. Therefore, it is using its high profits to rapidly diversify its holdings. Approximately one-half of Cargill’s sales now come from activities other than grain trading.
“For decades, Cargill has shrouded itself in a veil of secrecy precisely to ward off this possibility: it realizes that publicity about the company’s operations can only lead to increased public hostility”