Video produced and edited by Sean Morrow and Brooke Shuman
They’ve been called “the worst company in the world,” they once had an intelligence operation “bigger than the CIA”, and they have near complete control over how and what you eat.
Cargill Incorporated is the biggest privately owned company in America by a huge margin. they bring in more money than the 3rd, 4th, and 5th largest companies combined. Pretty much any food you buy, they made a little bit of money off of.
This is a result of over a century of consolidation: absorbing, buying up, and merging with other companies to try to control a chunk of every aspect of the food economy.
Their power and breadth has kept wages down, squashed worker power, and pushed family farms to the brink of non-existence, while manipulating prices for the consumer–that’s you.
And that ubiquity is about to get even worse: Cargill has plans to absorb a chicken empire.
It’s all made one family very, very rich: the Cargill-MacMillan’s own 88% of the company. 14 of them are billionaires. The family is worth a total of $40 billion. How does so much wealth get concentrated into so few hands?
We have to go back 127 years to the beginnings of Cargill’s history.
This is How They Got Rich, a series from The Class Room by More Perfect Union.
Cargill began in 1865, right as the Civil War ended, with the purchase of a single grain storage warehouse. As the then-new railroad expanded along the American west, Cargill facilities followed.
At the time, the Cargills didn’t really own farms or actually produce anything, they just ferreted themselves into grain profits by controlling infrastructure and storage.
Then, as one of the first clues this family treats real life like Game of Thrones, WW Cargill married off his daughter Edna to John H. MacMillan, whose family owned even more grain warehouses. The companies merged.
They became the Cargill-MacMillians, the family we know today.
By the early 1900s, Cargill controlled so much different industry that if a grain farmer in the midwest didn’t do business with Cargill, they couldn’t do business at all.
World War I breaks out, and Cargill makes a profit.
They started expanding out of the Midwest, building out what they internally called the “endless belt.”
Picture a giant nation-spanning conveyer belt hauling wheat from a farm in western Iowa, it stops at a mill facility in Chicago to become flower flour, the flour goes to a bakery in Pittsburgh where it’s turned into a kaiser roll, and then it lands at a New York city deli to become a delicious reuben.
Cargill’s plan was to make money at each step of the way: selling seeds and supplies to the farmer, storing the grain, selling tools to the mill, sourcing sesame seeds for the bakery, and selling curing salt to the deli.
Oh, and they own the transportation systems too: the further it goes, the more they make.
In 1924 they acquired the Taylor and Bornqiue company, a competitor, who has a unique technology: a private wire system. Back then, this was the equivalent of having your own internet, and allowed Cargill to communicate quickly and easily among themselves.
The tech was so good it remained in operation til 1996, well into the internet age.
Getting good information quickly was important, because Cargill was beginning to work in commodities futures trading: that’s gambling on the future prices of necessities like wheat, corn, and meat.
A lot of this business is done at the Chicago Board of Trade, which was basically a real version of how you pictured the stock market as a kid: a bunch of guys yelling in a room about the price of a bushel of wheat.
Novelist Frank Norris wrote in his The Epic of the Wheat, “Think of it, the food of hundreds and hundreds of thousands of people just at the mercy of a few men down there on the Board of Trade. They make the price. They say just how much the peasant shall pay for his loaf of bread. If he can’t pay the price, he simply starves.”
Cargill established information superiority: if they got information about something that could affect wheat prices at one location, they could instantly blast that information to other locations and change how they invest.
This is one of the ways consolidation helps: because Cargill had so many business arms, they got all the best information all of the time.
Sounds a lot like insider trading right? In commodities trading that’s basically legal.
“In contrast to stocks, commodities trading is the only major U.S. market where companies are allowed to act on inside information to manage risks others might not know about. In fact, that is how futures markets were designed.” – The Wall Street Journal
This is how Cargill managed to profit on the Great Depression and the dust bowl of the 1930s.
The dust bowl was caused in large part by the too-quick expansion of agriculture into the American prairie by companies like Cargill: farmers changed the landscape of the area too quickly and the ecosystem couldn’t handle it.
The Great Depression was caused in large part by speculation, again, a Cargill practice. Cargill, of course, had a different idea of whose fault the Depression was:
CEO John MacMillian Sr., blamed the labor movement,
“[they] got entirely out of hand and demanded [to reduce] the number of hours worked to forty hours a week. It is making the cost of everything so great that neither the farmer nor anyone else can live.”
The Depression sent grain prices down, and the Dust Bowl sent them up.
Cargill profited both times: their intelligence network had predicted the corn shortage and stockpiled it.
And people noticed: for the first time there were attempts to regulate the Cargill model of business. The Chicago Board of Trade banned Cargill and New Deal programs attempted to slow consolidation and regulate speculation, but Cargill executives argued against those programs to the public and FDR administration officials. The said the government should be cutting costs on labor instead.
Their lobbying worked and the Department of Agriculture agreed to a plan that gave the grain trading industry almost complete control over regulating themselves.
In the following decades they just bought more and more companies, taking over different elements of the food business to the seemingly random endeavors like Las Vegas casinos and Tokyo love hotels.
Significantly they’ve also taken over much of the meat industry. There are 4 big meat companies: Tyson, JBS, National Beef, and Cargill, which collectively control 85% of the world’s meat.
They decide the prices, they decide the supply, they decide what we eat and how much we pay for it.
And despite these companies using the illusion of inflation to raise prices, they think they’re helping:
Current Cargill CEO: “You can’t have a bunch of small players delivering such an important food source to the nation’s consumers. You have to have larger companies that can do it cheaply and can keep costs down”
All of that consolidation has made a massive corporation that’s still privately owned–88% by the Cargill-MacMillan family–and doesn’t have to report anything to the public.
The family isn’t as involved in the direct management of the company anymore like they used to be: they still dominate the board but the executives are outsiders.
But they still make an income off the company: dividends are the payments shareholders get of a company’s profit periodically.
The Cargills got paid $1.13 billion in dividends in 2020, nearly double what they got the year before.
That’s 44 thousand times what the average American family farm made the same year.
Cargill Inc. and the Cargill-MacMillan family aren’t one and the same, but the fiduciary responsibility of the company is to make money for the family. And they’re only getting more powerful.
The family and company are major beneficiaries of a pro-corporate government.
When Cargill was accused of having child slaves in the Ivory Coast, the Supreme Court dropped the case because the statute that allowed foreigners to sue in American court couldn’t be used to sue corporations.
The Commodity Futures Modernization Act of 2000 took away what limited regulations over speculative commodities we have, which led to Cargill opening up hedge funds that invested in commodity futures.
They were selling people investments in a market they controlled.
And they want to get even bigger:
Cargill recently completed a merger with Sanderson Chicken, the third largest chicken producer in America.
A coalition of Senators had implored the Department of Justice to investigate and stop it:
“This mega merger, in a sector already plagued with consolidation and illegal behaviors that harm farmers and consumers alike, represents a new threat to building a competitive agricultural industry”
But the DoJ allowed the deal to go through, with one caveat: the combined companies would stop using the ‘tournament system’–where top performing workers got bonuses taken from the paychecks of lower performers.
A practice enabled by consolidation: a long running conspiracy with a number of other poultry processors in the United States to exchange information about the wages and benefits that they pay the plant workers.
“Just two days after this announcement… they told me they’d reduce my income by 1/3rd…. whether or not I signed this contract, all the Sanderson growers within the state of Mississippi would receive this paycut. ”
It’s easier to treat your employees poorly when the guy across town does too.
The companies also had to pay a fine: $85 million, total.
That’s almost nothing within the vast wealth of the Cargills.
That wealth was hoarded at the expense of small farmers, working people, people who… eat food, and people who simply live on Earth: Cargill is one of the worst polluters in the world.
At least a portion of the Cargills’ $40 billion was taken from you.
The rise of the Cargill corporation, and the wealth hoarding of the few dozen family members benefiting from it, shows that aggressive consolidation in any industry is bad for working people, and needs to be regulated.