David Whitford (with Doris Burke) has written a comprehensive article on a famously private company, Cargill, titled ‘Cargill: Inside the quiet giant that rules the food business’. The article was written for Fortune and appears on the CNN Money website, and is well worth a read by anyone interested in food security, quality and affordability – and the well being of food producing farmers.
A quick summary:
– The beginnings of the Cargill company were in Iowa in 1865 and approximately 100 descendants of William W. Cargill and John H. MacMillan own Cargill today.
– Cargill is the largest privately owned company in the U.S., with $119.5 billion (USD) in revenue for the most recent (US) financial year. If publicly listed, Cargill would be ranked number 18 on this year’s Fortune 500 list of companies.
– There are 56,000 Cargill employees in North America, but also 32,000 listed in the South Pacific (which presumably includes Australia), 21,000 in South America and 17,000 in Europe. There are also 4,000 Cargill employees in Africa and the Middle East.
– 60% of earnings come from outside the USA.
-Cargill is primarily a commodities trading company. Cargill doesn’t actually own any farmland or produce any food themselves, other than a couple of large oil palm plantations in Indonesia. “Their game is: extremely efficient, high volumes, low margins, and just being smarter and quicker than anybody else,” says the deputy director of the Stanford University Centre on Food Security & the Environment, Wally Falcon.
A classic quote:
‘Whatever you ate or drank today — a candy bar, pretzels, soup from a can, ice cream, yogurt, chewing gum, beer — chances are it included a little something from Cargill’s menu of food additives.’ I’m pleased to say none of those things are on my menu today – and most are rarely or never part of my daily diet. Because here’s the next sentence: ‘Its $50 billion “ingredients” business touches pretty much anything salted, sweetened, preserved, fortified, emulsified, or texturized, or anything whose raw taste or smell had to be masked in order to make it palatable.’ Enough to put you off processed food for life, I’m thankful I don’t EVER go to those imported hamburger places. Bring on the fresh vegetables and grassfed beef and lamb! And, as of the other day, we now produce our own Australian chocolate, produced by Daintree Estates. (Daintree cocoa is a genuine farmer’s co-operative; and the chocolate is made from Australian sugar and dairy products, as well as home-grown cocoa beans.)
The article has a very interesting piece on Cargill’s involvement in Vietnamese farming, in particular, the burgeoning cocoa farming industry.
But of course the part of the Cargill article that is of most relevance to Australians, is a small paragraph down near the bottom of the article, concerning Cargill’s purchase of the Australian Wheat Board (AWB) for $1.3 billion. Cargill CEO Greg Page is quoted as saying: “We’re in Russia, we’re in the Ukraine, we’re in Canada, we’re in the U.S., we’re in Argentina, and we just didn’t have as vibrant a footprint there” (prior to the purchase of the AWB).
Great news for Australian wheat growers – NOT!
It’d break your heart to read this, and having been involved in the setting up of the AWB, all those decades ago, I’m just glad my grandfather has not been around to see the AWB so-called ‘wheat for arms’ scandal. Which was so clearly instigated and stoked along by vested-interest overseas grain trading competitors who’d no doubt not think twice themselves about doing whatever it took, behind closed doors, to get the deal done. That’s how business usually operates, both large and small, and anyone who believes otherwise is exceedingly naive. And the AWB so-called ‘scandal’ is particularly galling, given that America is the world’s largest manufacturer of arms (i.e. not in a position to honestly jump up and down about an Australian business risking the safety of U.S. citizens and soldiers…when the U.S. has been managing that themselves, unhindered, for many years). Australia’s single desk wheat trading board was set up decades ago by Australian grain farmers to enable them to pool their produce and negotiate a better price from grain traders on the world market – who otherwise handed smaller producers crumbs in return for their grain (read Steele Rudd’s ‘On our Selection’ for a reminder of how it used to be – heartbreaking, giving away the very best crops for a pittance). Hmmm I don’t suppose any of the Cargill billions would have been acquired by buying grain for unconscionably low prices and selling for extortionately high, during times of drought and food shortage?
Well worth keeping an eye on. And it pays to remember – to help ensure Australia continues to have a plentiful and good quality supply of food into the future, as much as possible, buy Australian grown produce, produced by Australian farmers and farming companies.
PS: Cargill’s Australian website features an image of Uluru, which is an odd choice, given the Cargill Australia headquarters are in Melbourne, and all their Australian operations are in farming areas south of a line drawn from Brisbane to St George then Perth. And there’s absolutely no grain growing or farming in the red sandy country in the vicinity of Uluru. Although Melbourne’s Flinders Street Railway Station does feature in a couple of images – it’s not far from Cargill’s Southbank headquarters. The map of Cargill’s Australian operations is indeed a wild one, with the most obvious gaffes being locating Toowoomba considerably further west than St George, in fact Toowoomba is marked on the map right about where Charleville is; and Parkes has been located right about where Lake Mungo is. Tip for companies who set up a business in another country – it helps foster an image that you care, and have some knowledge of what you’re talking about, if you’ve bothered to get your website maps approximately correct, and include relevant, local images.