Cargill

• 1. Introduction

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  Cargill, Incorporated, headquartered in Minnetonka, Minnesota, employs more than 160,000 people across 66 countries. It is responsible for 25% of all grain exported from the United States, and it supplies about 22% of the American domestic meat market. It is also the only American producer of Alberger process salt, an ingredient used across the fast-food and prepared food industries.

  Its range is wide. Cargill produces grain, palm oil, livestock feed, steel and energy. It makes starch, glucose syrup and vegetable oils for ultra-processed foods and for industrial use. It also runs a large financial services arm that manages the company's risk in commodity markets.

  As of 2023, Cargill was the largest privately held company in the United States by revenue. Its shares do not trade on a stock exchange, and descendants of its founder still own more than 90% of it. Because it is private, it must release less information than a listed company, and it has long kept a relatively low profile.

  How did a small family grain business grow into something this large? Who steered it through wars, market crashes and a financial reckoning of its own? And why have courts, regulators and campaign groups on several continents spent years scrutinizing it?

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• 2. Family and Frontier

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  In 1865, in the Iowa town of Conover, William Wallace Cargill started the business that still carries his name. A year later his brother Sam joined him, and the firm became W. W. Cargill and Brother. Together they built grain flat houses and opened a lumberyard. In 1875 the business moved to La Crosse, Wisconsin, where a third brother, James, came aboard.

  Sam left La Crosse in 1887 to run the office in Minneapolis, which was then an emerging grain center. Three years later the Minneapolis operation was incorporated as Cargill Elevator Co. The La Crosse operation later became W. W. Cargill Company of La Crosse, Wisconsin. In 1898 two brothers, John H. MacMillan Sr. and Daniel, began working for W. W. Cargill.

  Sam's death in 1903 left William as the sole owner of the La Crosse office. John MacMillan became general manager of Cargill Elevator Company and moved his family to Minneapolis. William died in 1909, and the company's debts pushed it into a fiscal crisis. To pay off its creditors, it issued $2.25 million in Gold Notes backed by Cargill stock.

  The notes were due in 1917, but record grain prices during World War I let the company clear all of its debts by 1915. MacMillan worked on the credit problems. He also forced his brother-in-law, William S. Cargill, out of the company.

  John MacMillan then ran Cargill until he retired in 1936. In 1923 he opened the first East Coast office, in New York. He is remembered as the architect of the company's strategy of internationalism. Its first Canadian, European and Latin American offices opened in 1928-1929 and 1930. The Canadian office, in Montreal, operated as Cargill Grain Company Ltd. MacMillan was also noted for his part in the controversial thawing of trade between the United States and the Soviet Union.

  War brought both profit and blame. As the fighting continued into 1917, Cargill reported record earnings and faced criticism for war profiteering. Four years later, after the financial crash of 1920, it posted its first loss.

  The sharpest fight in these years was with the Chicago Board of Trade. In 1934 the Board denied Cargill membership, and the US government overturned the ruling and forced the Board to accept the company. Then the 1936 corn crop failed, and the 1937 crop would not be available until October. The Board ordered Cargill to sell some of its corn, and Cargill refused.

  The US Commodity Exchange Authority and the Board accused the company of trying to corner the corn market. In 1938 the Board suspended Cargill and three of its officers from the trading floor. When the suspension was lifted a few years later, Cargill declined to rejoin. It traded through independent traders instead.

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• 3. Widening the Menu

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  During World War II, under MacMillan Jr., Cargill stored and moved grain and built T1 tankers and Towboats for the United States Navy. In 1945 it bought the stock of Nutrena Feeds, then known as Nutrena Mills. Animal feed was in short supply after the war, so the purchase doubled the size of Cargill's feed business and turned its attention further toward feed.

  In 1960 Erwin Kelm became the first chief executive from outside the founding family. He wanted to move into downstream production, and he led the company into milling, starches and syrups. As Cargill grew, it built a market intelligence network to coordinate its trading, processing, freight, shipping and futures businesses. By 1972 its sales had reached $5 billion, making it the largest agricultural trader in the world.

  The Soviet Union shaped the next decade. Cargill had negotiated a $40 million wheat deal with the USSR in 1963, the start of a relationship that grew into a series of larger deals. When the Soviet Union entered the grain markets in the 1970s, demand surged to unprecedented levels, and Cargill benefited.

  Whitney MacMillan, a nephew of John Jr., took over from Kelm in 1976, when revenue was approaching $30 billion. The US government pressured the large grain exporters with allegations of market manipulation, and Cargill was a major target. It emerged without any major changes.

  The company kept adding new businesses. In 1978 it bought the Leslie Salt refining company, in Newark, California, from Schilling. In 1979 it entered meat processing by buying the beef processor MBPXL, later called Excel. That division grew into turkey, food service and food distribution, and it is now known as Cargill Meat Solutions.

  In 1986 Cargill began operating in Venezuela through a partnership with the Possenti family's Mimesa C.A. The venture, Agroindustrial Mimesa in Maracaibo, was dedicated to making flour and pasta.

  In 1993 the company answered demands for a public stock offering with an employee stock ownership plan. It used a 17% stake purchased from 72 Cargills and MacMillans for $730 million. The board was also reorganized, cutting the number of relatives to six, alongside six independents and five managers.

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• 4. Crisis and Reinvention

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  Ernest Micek took over as chief executive in August 1995, and the years that followed brought turmoil. In 1998 the financial unit lost hundreds of millions of dollars when Russia defaulted on its debt and developing countries ran into financial trouble. The commodities and ingredients business, which brought in 75% of total revenue, was hit by the 1997 Asian financial crisis.

  Revenue fell by double-digit percentages two years in a row. It dropped from $55.7 billion in 1997 to $51.4 billion in 1998 and then $45.7 billion in 1999. Net income slid from $814 million to $468 million and then to $220 million. By 1999 the company carried $4 billion in debt.

  Its previously strong bond credit rating was downgraded, and Micek announced he would step down a year early. Warren Staley became chief executive in 1998. The company sold assets such as its coffee and rubber businesses.

  Recovery came through acquisitions. In 2002 Cargill bought the European starch maker Cerestar from Montedison for $1.1 billion. Cargill Meat Solutions bought Taylor Packing Co. in 2001 and Milwaukee Emmpak in 2003, then merged the two. In 2006 it bought Fresno Meats.

  In 2003 the company split off part of its financial operations into Black River Asset Management, a hedge fund with about $10 billion in assets and liabilities. Cargill had also owned two-thirds of the shares of The Mosaic Company, a producer of concentrated phosphate and potash crop nutrients. It sold that stake in 2011.

  On the 1st of June 2007, Gregory R. Page succeeded Staley as chief executive. In the quarter ending on the 29th of February 2008, quarterly profits topped $1 billion for the first time, at $1.03 billion.

  In October 2011 the US Justice Department announced that a Cargill biotech specialist had pleaded guilty to stealing information from Cargill and Dow AgroSciences. The man, Kexue Huang, a Chinese national, had been passing trade secrets back to China. In November 2011 Cargill completed its purchase of the animal nutrition company Provimi for 1.5 billion euros, or $2.1 billion.

  Dave MacLennan succeeded Page as chief executive and chairman in December 2013. In December 2014 Cargill finished commissioning a $100 million cocoa plant in Indonesia. In 2015 it wound down Black River Asset Management, shutting some hedge funds and folding others into Cargill. It spun off the rest to create Proterra Investment Partners, Argentem Creek Partners and Garda Capital Partners.

  In 2016 the company announced that its Protein Group headquarters would leave older downtown buildings in Wichita, Kansas, for a new $60 million building in the nearby Old Town area. The site was to be the historic former home of The Wichita Eagle. In 2017 Cargill sold its Geneva-based petroleum-trading business to Macquarie Bank. Its North American power and gas trading business soon followed.

  2018 was busy. Cargill and Faccenda Foods created a joint venture, Avara Foods, to take over their UK fresh poultry businesses, employing 6,000 people. In February the company completed its purchase of the pet food maker Pro Pet, which had plants in Owatonna, Minnesota, Kansas City, Kansas, and St. Marys, Ohio. In November it sold 13 crop input locations in Ontario, Canada, to La Coop Fédérée. It also invested $25 million in Puris, a supplier of pea protein used in Beyond Meat products, and added $75 million in 2019.

  On the 3rd of June 2020, Cargill announced that it would stop publishing quarterly results, ending disclosures it had made since 1996. It had already canceled its third-quarter earnings release in March 2020, amid the COVID-19 pandemic. In December 2021 Croda announced the sale of one of its divisions to Cargill for $1 billion.

  In 2022 Cargill saw record profits as the Russian invasion of Ukraine drove up food prices, and it continued to pay the Russian government during that time. In January 2023 Brian Sikes was appointed president and CEO.

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• 5. Child Labor Claims

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  In 2005 the International Labor Rights Fund filed suit in a US federal court against Cargill, Nestlé and Archer Daniels Midland. It acted for children who said they had been trafficked from Mali into Côte d'Ivoire as child slaves. They said they were forced to work on cocoa plantations for 12 to 14 hours a day, with no pay, little food and sleep, and frequent physical abuse.

  A 2019 program on the French channel France 2 looked at cocoa illegally harvested from protected areas in Côte d'Ivoire. It found child labor widespread on the plantations it investigated, with every third worker a child. Cases of trafficking from neighboring Burkina Faso were also reported.

  Cargill buys from those plantations. It first denied buying cocoa from protected areas, but it then had to admit that its traceability system had not reached them. It could not fully trace where its cocoa came from. Swiss TV channel RTS 1 later reported that Nestlé is one of Cargill's biggest customers for cocoa from Côte d'Ivoire.

  In 2021 eight formerly enslaved children from Mali named Cargill in a class action lawsuit. They alleged that it aided and abetted their enslavement on cocoa plantations in Côte d'Ivoire. The suit also named Nestlé, Barry Callebaut, Mars, Incorporated, Olam International, The Hershey Company and Mondelez International. It accused them of knowingly engaging in forced labor and sought damages for unjust enrichment, negligent supervision and intentional infliction of emotional distress.

  The cocoa claims were not the first. Cargill was a major buyer of cotton in Uzbekistan, where unpaid labor and possible human rights abuses were common. Two company representatives admitted that Cargill knew of child labor in the production of its crops, and concerns about this had been public since 2005.

  In December 2010 a complaint was filed in France, Germany, Switzerland and the United Kingdom. It accused Cargill of knowingly profiting from child labor in Uzbekistan. The complaint alleged that children were pulled out of school to help with the cotton harvest, and that their families saw no profit from it. Individual agreements were reached with each of the countries that took part. A follow-up evaluation in 2013 showed that Cargill had lessened its commitment once media coverage faded.

  In September 2023 a Brazilian court fined Cargill the equivalent of $120,185 for its use of child labor in cocoa harvesting.

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• 6. Forests and Land

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  In 2019 the NGO Mighty Earth released a 56-page report on Cargill. Its chair, the former US Congressman Henry A. Waxman, called Cargill "the worst company in the world". He said it drives "the most important problems facing our world" at "a scale that dwarfs their closest competitors." He listed those problems as deforestation, pollution, climate change and exploitation. The same year, the Swiss NGO Public Eye also criticized Cargill in a report on agricultural commodity traders based in Switzerland.

  In 2003 Cargill completed a port for processing soya in Santarém, in the Amazon region of Brazil. It sharply increased soya production in the area and, according to Greenpeace, sped up the deforestation of the local rain forest. Locals looking for work first backed the port, but opposition grew when the jobs failed to appear. In February 2006 Brazil's federal courts gave Cargill six months to complete an environmental assessment. By July 2006 the federal prosecutor said they were close to shutting the port down.

  Greenpeace took its campaign to major food retailers. McDonald's and the UK retailers Asda, Waitrose and Marks & Spencer quickly agreed to stop buying meat raised on Amazonian soya. These retailers in turn pressed Cargill, Archer Daniels Midland, Bunge, the André Maggi Group and Dreyfus to prove their soya was not grown on recently deforested land. In July 2006 Cargill reportedly joined other soy businesses in Brazil in a two-year moratorium on buying soybeans from newly deforested land. In 2019 six of the largest agricultural commodity traders committed to monitoring their soy supply chains in Brazil's Cerrado. They were ADM, Bunge, Cargill, LDC, COFCO Int. and Glencore Agri.

  Palm oil raises a similar problem. Cargill sells large volumes of it, and it is found in many processed foods, cosmetics and detergents. Most palm oil comes from plantations in Sumatra and Borneo, which have been heavily deforested to make room for them.

  On the 13th of September 2017, Mighty Earth released a report finding that Cargill buys cocoa grown illegally in national parks and other protected forests in the Ivory Coast. The report accused the company of endangering the habitats of chimpanzees, elephants and other wildlife. It found that 7 of the 23 Ivorian protected areas had been almost entirely converted to cocoa. Cargill was told of the findings and did not deny that it sourced cocoa from protected areas.

  Data from Global Forest Watch in April 2019 showed that tropical primary forest loss rose dramatically in 2018 in Ghana and Côte d'Ivoire, mainly because of cocoa farming and gold mining. Ghana's rate rose by 60% over 2017, the highest increase in the world. Côte d'Ivoire followed with 26%.

  The NGO Oxfam documented a case of land grabbing in Colombia. Between 2010 and 2012, Cargill brought large areas of land under its control despite legal limits on acquiring state land. To do so it set up at least 36 mailbox companies, which let it exceed the maximum landholding size set by law. Its holdings passed 50,000 hectares, more than 30 times the limit for a single owner.

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• 7. Food Safety and Animals

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  In 1971 Cargill sold 63,000 tons of seed treated with a methylmercury-based fungicide. When eaten, it eventually caused at least 650 deaths. The treated seed was supplied at the specific request of Saddam Hussein and was never meant to be eaten by people or animals before planting.

  The grain was dyed red and carried warnings in Spanish and English, along with a skull and crossbones. These precautions followed a 1960 incident in which mercury-treated seed was sold as food in Iraqi markets. In 1971 the grain arrived too late for much of the planting season, so many farmers sold their surplus in public markets at very low prices. That drew in poor Iraqis who could not understand the warnings or ignored them, and thousands of cases of mercury poisoning followed. Two things made the surplus seem safe: symptoms appear only after a long delay, and cattle tolerate mercury better than people do.

  Later problems involved meat. In October 2007 Cargill recalled nearly 850,000 frozen beef patties from its packing plant in Butler, Wisconsin, over suspected E. coli contamination. The beef was sold mainly at Walmart and Sam's Club stores.

  In March 2009 the Australian Quarantine and Inspection Service temporarily suspended Cargill Australia's license to export meat to Japan and the US. E. coli had been found in export containers from its Wagga Wagga plant. The suspension was lifted in late April 2009.

  In August 2011 the USDA and Cargill jointly announced a recall of 36 million pounds of ground turkey from the Springdale, Arkansas, plant over salmonella concerns. The Centers for Disease Control and Prevention said the strain was resistant to commonly prescribed antibiotics. One death and 76 illnesses in 26 states were reported. In September 2011 Cargill announced a second, immediate and voluntary Class One recall, this time of 185,000 pounds of 85% lean fresh-ground turkey, over possible Salmonella Heidelberg contamination.

  In July 2012 the Vermont Department of Public Health reported that 10 people in the state had fallen ill from ground beef recalled by Cargill Beef. Hannaford Supermarkets alerted shoppers that Cargill Beef was voluntarily recalling 29,339 pounds of ground beef that might contain salmonella.

  Animal welfare has drawn attention too. In 2015 Cargill announced it would phase out gestation crates for its sows by 2017, reportedly in response to pressure from clients and consumers. In 2022 an inspection of a turkey factory in Dayton found infractions of the Poultry Products Inspection Act, which is meant to minimize suffering in poultry. The inspection found that the plant allowed turkeys to die from asphyxiation without first stunning or slaughtering them.

  In 2024 the USDA reported that Cargill was giving human-grade antibiotics to its cattle while labeling the beef "raised without antibiotics". This breached truth-in-advertising and labeling standards. The Bureau of Investigative Journalism then reported that these were antibiotics for human use, which would significantly add to antibiotic resistance in the human population, a source of human suffering prioritized by the UN.

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• 8. Workers, Wages and Law

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  In 2020 a single meat processing plant in High River, Canada, was linked to over 358 cases of COVID-19 infection. Thomas Hesse, president of United Food and Commercial Workers Canada Union Local 401, said: "It's a tragedy. We asked days and days ago for that plant to be closed temporarily for two weeks, send all of the workers home with pay to isolate. That was when we were aware of 38 cases. That was before they set up a dedicated testing facility in the area." Reports also surfaced of employees being denied personal protective equipment. By the 3rd of May 2020, 917 of the plant's 2,000 workers had tested positive, and the plant was linked to 1,501 cases in total.

  In February 2018 employees at Cargill's plant in Dayton, Virginia, held protests, including an organized strike outside the plant. Their grievances included poor health benefits, poor working conditions and the alleged firing of employees who organized a union. The protests led to nine arrests for trespassing on company property.

  In August 2018 Cargill faced legal accusations in Turkey that it had fired fourteen union members without justification. The company denied them. Final rulings in late 2019 and early 2020 found that at least eight of the former employees were fired only because of their union ties, and that four of the others were also unfairly dismissed. Cargill was ordered to pay additional severance to each of these workers.

  In 2024 Cargill paid $30 million to settle a class action alleging collusion with other beef producers to suppress wages at meatpacking plants. Together with JBS Foods, Tyson and National Beef, Cargill is considered one of the nation's largest meat processors, making up over 85% of US beef production. The law firm Hagens Berman claimed that "Cargill and other meat companies shared compensation data through third parties and 'secret meetings' over several years to hold wages and benefits at artificially low levels." Cargill denied the allegations. It said it settled to avoid "larger litigation costs and distractions from the critical work our production teams do."

  In 2011 a case of transfer mispricing came to light in Argentina involving the four largest grain traders: ADM, Bunge, Cargill and LDC. Argentina's revenue and customs service had started investigating when commodity prices spiked in 2008 but very little profit was reported. It alleged that the companies submitted false sales declarations and routed profits through tax havens or to their headquarters. In some cases they were said to have used dummy corporations to buy grain and to inflate costs in Argentina to reduce recorded profits there. The outstanding taxes came to almost US$1 billion. The companies denied the allegations.

  As of 2019 the Argentinian tax authorities had not answered Public Eye's request about the state of the case. Bunge's 2018 annual report to the US Securities and Exchange Commission mentioned provisions suggesting it was still ongoing. In 2023 the Argentine tax court ruled officially against Cargill, ordering the fine and interest.

  Cargill has also faced regulators over air pollution. In 2005 it settled with the Department of Justice and the Environmental Protection Agency over Clean Air Act violations, including a plan to invest over $60 million in clean air controls. The effort was joint between federal authorities and Alabama, Georgia, Indiana, Illinois, Iowa, Missouri, Nebraska, North Carolina, North Dakota and Ohio. In 2006 NatureWorks, a Cargill subsidiary in Nebraska, settled with the state over inadequate air pollution controls. In 2015 Cargill settled with the EPA over Clean Air Act violations at a plant in Iowa.

  In 2024 McDonald's Corporation sued JBS, National Beef, Cargill and Tyson, along with their subsidiaries, for alleged price fixing. In 2026 Cargill and Tyson both settled, agreeing to pay $87.5 million.

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