Cargill

Performance indicators

2023: Double profit growth

Cargill's Russian starch subsidiary doubled its net profit for 2023. The indicator amounted to 15.32 billion rubles against 7.42 billion rubles in profit in 2022. Such data are given in the reports of Cargill, published in early April 2024.

According to Interfax, citing the company's materials, its revenue in 2023 amounted to 113.99 billion rubles, which is less than the revenue a year ago at 129.23 billion rubles. Revenue from the sale of finished products also decreased - from 87.05 billion to 78.27 billion rubles. The cost of finished products in 2023 decreased to 53.25 billion rubles from 64.64 billion rubles in 2023.

𝓲

Unsplash

Global Cargill's revenue for fiscal 2023 reached $177 billion, up 7% from the previous year. Revenues rose thanks to strong demand for food, animal feed and biofuels, the company reported. Also, global interruptions in grain supplies caused by the Russian-Ukrainian military conflict had a positive impact on the group's performance.

Cargill was among the major exporters of Russian grain, but since July 1, 2023 it has closed this business. Cargill also announced the termination of investments in the Russian Federation.

In Russia, Cargill operates in the following areas (by the end of 2023):

• trade in grains and seeds of oilseeds
• pressing, refining, bottling and hydrogenation of vegetable oils and fats
• development of fodder formulations for animal husbandry, their production and implementation
• production and marketing of molasses and starch products
• marketing of food and feed ingredients
• production of native wheat gluten
• marketing of special purpose food ingredients, including texturants.^[1]

2022: Record annual revenue of the Russian subsidiary - 129.2 billion rubles (+ 9.7 %)

The revenue of the Russian subsidiary Cargil in 2022 amounted to 129.2 billion rubles, which is 9.7% more than a year earlier. This figure turned out to be a record for the company. Its annual net profit increased 1.7 times and reached 7.43 billion rubles. Such data are contained in reports published in May 2023.

According to Interfax, citing Cargil materials, in 2022, profit from sales of the company's Russian division amounted to 11.4 billion rubles, which is 1.9 times more than a year ago.

Russian "daughter" Cargill received record revenue

Cargill is among the major exporters of Russian grain. According to the Union of Grain Exporters, its share in 2022 accounted for 1.5 million tons, or 3.9% of the total export of Russian grain (it then amounted to 38.1 million tons). Moreover, over the past three years, the company's share in exports has decreased: in 2018/2019, the agricultural year accounted for 5.4% of exports, or 2.3 million tons.

In addition to exporting grain and sunflower, the company is engaged in the production and sale of vegetable oils and fats, molasses, starch products and other food ingredients, animal feed. The company's factories operate in the Volgograd and Tula regions. According to reports, the company was forced to suspend the work of an oil extraction plant in the Volgograd region. The reason for the plant's downtime was a significant breakdown of foreign-made equipment and the difficulty in delivering the original part, the document explains.

By the end of 2022, the grain division of the Cargil group in Russia included a trading company in Krasnodar, elevators in the Krasnodar Territory and in the Voronezh Region. In March 2022, the company announced that it would stop investing in Russia, but that its enterprises would continue to operate.^[2]

Aktivs

Cargill - according to the Forbes rating for 2012 - is the largest private company in the United States. It is engaged in the trade, storage, processing and transportation of agricultural products. The company controls the lion's share of American grain supplies.

Formally passing under the article "family business," Cargill still does not at all correspond to typical ideas about how a family business should function. The private company is run from the Minnesota provincial town of Minnetonka, but behaves like a blue-chip refueling.

Cargill:

• sells cocoa beans grown in Kot-d,
• maneuvering a cargo fleet of 350 ships,
• is the second US beef producer and one of the world's largest cotton suppliers,
• runs a hedge fund with five billion dollars in assets.

It depends on it whether millions of Americans will receive egg rolls from McDonald's for breakfast or turkey sandwiches from Sabway for lunch: both Cargill supply raw materials, like most American food producers.

Cargill diligently avoids farming itself: apart from a couple of palm plantations in Indonesia, the company does not own land. This decision is partly dictated by the desire to preserve capital. For about the same reasons, the company leases rather than buys ocean bulk carriers. But there is also a deeper, fundamental reason: agriculture is inherently alien to the corporation. She does not build her business around sowing and harvesting, but around trade - but the fact that grain and beef are the subject of trade, only a coincidence. As huge as Cargill Corporation is, it continues at its core to be a commodity exchange broker - albeit a colossal broker. She is interested in developing new markets, laying new trade routes, after all, it is banal to look for buyers and sellers who would work together. And, of course, provide the planet with a continuous flow of food.

History

2023: Plan to stop grain exports from Russia amid conflict in Ukraine

In March 2023, it became known that the Russian division of the American corporation Cargill will stop exporting grain from Russia from July 1, 2023, which is a step by a large Western grain trader aimed at leaving the country amid the conflict in Ukraine.

World traders continue to ship Russian grain. Viterra, Cargill and LDC are among the top 10 shippers this season.

2019: Cargill-McMillan is No. 4 on the list of richest families in the United States with a net worth of $38.8 billion

At the beginning of 2019, the fortune of the Cargill-McMillan family reaches $38.8 billion. At the beginning of 2019, 23 members of the Cargill-McMillan family own 88% of the company, which generates revenue of $108 billion per year.

Of the entire clan, 14 members are billionaires, nine are on the Forbes 400 list.

2012: Drought in the United States

The unprecedented heat in July and August 2012 dried up the soil of the so-called US corn belt (Iowa, Indiana, Kansas and others), destroying tens of millions of tons of corn, soybeans, wheat and oats. The year was also unsuccessful in Canada, Australia and Russia. In Brazil, soybeans were not born, and Ukraine completely suspended the export of wheat for a while, fearing to be left without bread. By the end of summer, drought turned into a global shortage of grain, including feed crops, and by October prices on world exchanges were breaking all records.

Drought has not affected the entire planet. In the important for the agricultural market, China for example, the clear sky was regularly replaced by rains - but the United States in the structure of global grain supplies has critical weight. America exports about forty percent of the world's corn crop, a third of soybeans and a fifth of wheat, so that a significant decline in exports is immediately auctioned off to the entire globe. At the end of autumn, the country started talking about the threat of hunger riots in states directly dependent on American corn, as well as the fact that the "food crisis" could be worse than the economic one.

The official response of Cargill representatives to the drought was rather concise. Commenting on the results of the first quarter of 2013 (fiscal year ends in May), company head Gregory Page complained about high purchase prices and market volatility and announced that he was waiting for "atypical" results of the year. With the outflow of international buyers from the United States, Cargill will have to quickly reorient itself to the supply of raw materials from other regions - primarily to the countries of Latin America and Asia. The group's management has already adjusted the revenue forecasts for 2012 downward. Worst of all, it is expected that things will be with the grain and livestock business. But Cargill does not lose optimism: the world's population is growing, as are prices for futures contracts, which means that the company's revenues will not noticeably fall. According to the Financial Times, the concern will be able to use the drought to its advantage: perhaps even, according to the results of 2013, eighty members of the Cargill-Macmillan family clan will be able to get a record profit in their history^[3].

As a result, with a turnover of $133.9 billion (according to the results of fiscal year 2012), Cargill was one and a half times higher in terms of sales of its closest competitor - Archer Daniels Midland, whose shares are freely traded on stock markets. If the concern suddenly decided on a public offering of shares, in the Fortune 500 list (rating of five hundred largest companies) USA it would automatically be in the top ten, between corporations and. Ford Hewlett-Packard

2010: Bet on India, China and Brazil

However, Asia for Cargill is much more than a supplier of agricultural products. The company associates particular hopes with China and India, showing constant growth in food demand. China has a fifth of the world's population, but the country is unable to provide itself with food: it has only seven percent of the planet's arable land. A significant part of raw materials and finished products have to be imported. In recent years, consumer habits have been changing here: the middle class buys more poultry and meat, spends on healthy food, gets used to convenience food and dinner outside the home. Customers are becoming more demanding and attentive to what is in their plates. About the same thing happens in India.

"The key to conquering Asia is speed," said Jerry Lieu, one of the managers of the company's Shanghai division. In 2012 alone, Cargill seriously expanded its two factories in China and launched a new Asian division designed to coordinate the operation of all sites in the region. Its specialization was starch, hydrocolloids, emulsifiers, sweeteners - all that the changing food industry requires. In the United States, by the way, the new natural sugar substitute Truvia in record time became the second most popular in the market; the company expects to repeat the brand's success in Asia. Even earlier, Cargill opened an innovative food research center in Malaysia, developing flavors for drinks, bacteria for fermented milk products, and various additives for the confectionery and chocolate industries.

Cargill shows no less interest in. Understandably so: the Brazil climate here is beautiful for the agricultural business, and there are agriculture more land-friendly and affordable sources of fresh water than in any other country in the world. The economic potential is also attractive: exports are developed, the domestic market of 200 million people is increasing prosperity, there are enough specialists and technologies. The company built soybean processing and biofuel plants here, and established a partnership to produce ethanol from sugarcane. The corn processing plant has been remodeled and expanded, with clean energy now extracted from biomass. Another similar plant will open in South America in 2013.

Biofuels, genetic engineering, synthetic additives... It seems that under the leadership of Gregory Page, Cargill is confidently moving away from trading and processing agricultural raw materials towards knowledge-intensive production - chemistry and bioenergy. The company actively cooperates with young companies, investing in innovative startups, as well as with large corporations with strong research capacities - BASF , Shell and others. In partnerships and independently, Cargill processes corn into plastic, cow manure into biogas, receives technical oils and lubricants from soybeans and rapeseed. "Mastering new types of business for us is a thing as self-evident as geographic expansion," said Vice President Paul Conway. Also because it is possible that a lot of money is hiding in them: Cargill's new business areas are growing by 15-20 percent per year, and the profitability rate in them is much higher than in traditional agricultural business.

It is possible to explain Cargill's interest in high-tech industries in a different way. Diversification, coupled with the active expansion of the business - in 2012 alone, capital investments exceeded $4 billion - the method by which a company with a half-century history overcame more than one crisis. But as powerful as it is, it is impossible to insure against human errors and economic recession. In a recent interview with Forbes, Gregory Page admits that he underestimated the scale of the beginning recession in 2008; regrets the sensational scandal with a consignment of poultry contaminated with salmonella at one of the factories; laments that one of Cargill's products (about which one, Page is silent) did not live up to expectations. "At least I don't have to report to shareholders," he jokes. But there is some truth to this joke: it is quite possible that it was freedom of action that led the company of the Cargill-Macmillan clan to prosperity.

2000s: Pumping Vietnam

not used to defining strategy based on perceptions of future economic circumstances," explains Vice Chairman Paul Conway (2012). "We are developing a strategy or a number of strategies that will lead to success regardless of what the world will be like tomorrow."

This principle, as time shows, works perfectly in practice: Cargill safely juggles entire markets and industries - as happened, for example, with the cultivation of cocoa in Vietnam.

Seventy percent of the world's cocoa is harvested in West Africa - mainly on the Ivory Coast. Since 1999, a protracted political crisis has reigned in the region: armed riots, rebellions are taking place here, the election results are being rigged, and the troops of neighboring countries are being pulled up every now and then. Production quickly reached its ceiling, and Cargill did not want to invest in unstable conditions in the development. I had to look for other exits. Cocoa trees are finicky plants: they require a lot of shade, heat and high humidity, as well as special soil. Best of all, these conditions are satisfied by a relatively narrow belt twenty degrees north and south of the equator - a belt that passes through Vietnam.

The Cargill region knows perfectly well: the company was the first of the American multinational giants to restart its operations here after Bill Clinton restored diplomatic relations with Hanoi in 1995. It quickly became the largest supplier of local feed for the livestock industry, engaged in the purchase of shrimp, soybeans, sugar, and metal trade. The country was trying with might and main to adopt Western models of market functioning. The government wanted to reduce the dependence of the agrarian economy on state support and began to encourage private farming. The transformation results have been astounding, with Vietnam importing millions of tonnes of rice for decades and becoming the world's second exporter of the crop for the first time in 2012.

The economic recovery was in the hands of Cargill - and it began to "grow" a new supplier of cocoa. In 2004, the company entered into a public-private partnership with one of its largest buyers, chocolate manufacturer Mars, and the governments of Vietnam and the Netherlands (Cargill's main cocoa processing facilities are located in Holland). There was little agreement at the government level: it was necessary to enlist the support of farmers. After much conviction, the company assembled a large group of entrepreneurs willing to risk and trade traditional crops - coffee, black pepper and cashews - for cocoa. Cargill had two years to prepare the market infrastructure: this is how much cocoa tree seedlings need to start bearing fruit. During this time, the company conducted trainings for 12 thousand farmers, teaching them to protect trees from insects, fertilize the soil, build modern irrigation systems, and treat grains (similar trainings, incidentally, were held in Ghana and Kot-d). Another 900 entrepreneurs underwent additional training under the UTZ certification program. The benefits of it are bilateral: buyers receive certain quality standards, and farmers receive an additional hundred dollars for each ton of products. In February 2011, the first results of the UTZ program appeared: three farms working with Cargill received certificates. In 2012, there were another thousand people who wanted to undergo training.

At the same time, the company built three large procurement stations in close proximity to the plantations, on the main routes in the provinces of Ben Tre, Daklak and Bin Fuok. From the very beginning, she decided to adhere to maximum transparency in pricing policy. It provides everyone online or text messages daily with information about the price at which cocoa is traded on the London Stock Exchange so that farmers can compare it with the local purchase price. After the deal, they can "freeze" the price for three weeks: during this time, cocoa beans are fermented and dried. To eliminate the last doubts, Cargill has created a network of hundreds of demonstration farms: curious people can watch business development by living example.

In 2011, Vietnamese farmers collected 2,500 tons of cocoa; more than two-thirds were sold to Cargill. On the global market, this, of course, is a drop in the ocean: in Ivory Kot-d alone, they collect a million tons per year, and the entire market reaches 3.5 million. But the potential for growth in Vietnam is clear. For seven years, the company managed to forty times increase the area of ​ ​ land on which cocoa is cultivated, and attract 32 thousand farms to the industry. According to the company's forecasts, by 2020 the volume of Vietnamese cocoa may already amount to a hundred thousand tons - with such indicators, the country will enter the top ten largest suppliers of culture. In 2014, Cargill plans to build a plant in Vietnam or nearby Indonesia to process cocoa beans and make liqueurs, cocoa butter and cocoa powder. So far, raw materials are transported for processing to Holland: the journey takes 24 days and is quite expensive.

1995: Ernest Micek is the first non-family manager

Since the 1990s, Cargill has had a scheme to buy shares in the company by its workers, and some family members have sold some of their securities. However, the company's fixed assets are still concentrated in the hands of the family.

The gigantic, functionally and geographically, corporation has become difficult to manage. In addition, Cargill faced an inheritance crisis: its famous internal management school, which grew five generations of managers literally from diapers, began to hand over. In the 1990s, it turned out that there was definitely no one to replace Whitney, who was going to retire. Before his departure, the head of the company risked a large-scale restructuring and introduced new persons to the board of directors. Now a third of it was made up of independent managers from outside, another third - managers from among the company's employees, and the rest of the seats were occupied by shareholders from the Cargill-Macmillan family. There was also a long-awaited successor - the former president of the food division of Cargill Ernest Micek, who headed the company in August 1995.

Cargill's investment portfolio has been shuffling since the deck of cards. The company engaged in genetic seed engineering, but soon left this market. Increased capacity in agricultural chemistry, and then sold a controlling stake in the largest fertilizer producer Mosaic for $19 billion. She mastered the production of food additives, sweeteners and natural flavors - and has been purposefully developing it so far. She began to receive glycerin in Iowa, grow gobies in Japan, squeeze sunflower in Bulgaria and Ukraine and harvest compound feed in the Tula region. In 65 countries with which Cargill trades, farmers often trust the company in a full agricultural cycle: its products can be filled with feeders, fertilize fields, and at the same time insure crops and get their hands on the forecast of market development in the region.

1985-1991: Investment in Development

Whitney McMillan, the great-grandson of William Cargill, completely shared this point of view: in 1985, for example, he bought a huge soybean processing plant with a capacity much larger than the company needed. With his hand, the company replenished the portfolio of the fertilizer business, engaged in oil refining, as well as the procurement and processing of pork. The financial services division rose: it began to open credit lines to independent banks, manage assets and private capital - and decide the fate of large financial institutions, just as creditors once decided the fate of Cargill, which became indebted. Whitney did not tolerate half measures: if he wanted to enter the cocoa market, he needed to be among the first. Having bought two relevant company profiles in 1987, he led Cargill into industry leaders in Europe. If he entered into a partnership with China, he immediately invested millions of dollars to gain a foothold in the region - for example, he began construction of a large oil factory in Shandong province. The net worth of Cargill assets by 1991 rose to $3.7 billion, an increase of almost forty times over a quarter of a century: it is worth attributing this merit to Whitney McMillan.

1971-1981: Turnover growth of 10 times

From 1971 to 1981, the company's sales grew more than tenfold, from $2.2 to $28.5 billion. It is worth noting that the Soviet Union continued mass purchases of American grain - about six million tons annually - throughout the 1970s. The food dependence of the USSR on the United States concerned not only wheat and corn: the Americans supplied significant consignments of beef and poultry products there.

But worsening conflicts between the two states led to an embargo on grain trade in 1980. The agricultural market was in the grip of an economic downturn: the largest buyer was lost indefinitely, the dollar grew, interfering with foreign trade operations, and the debt crisis of developing countries led to the bankruptcy of a number of companies. Cargill Corporation struggled with the difficulties of the usual means. John McMillan Sr. also taught his future heirs that sagging business is a good reason to invest in its development. According to his logic, when the economy revives in the next cycle, the company, which has increased its "muscle mass" during downtime, will be able to snatch a big jackpot - and thereby repeatedly recoup investments.

1972: Landmark deal with the Soviet Union

Cargill burned only once when it decided to sell grain to the Soviet Union almost "from under the floor." It became involved in trade with communist countries back in the early 1960s, when large consignments of American grain were sent to Hungary and the USSR. With the filing of Leonid Brezhnev at the end of the decade, these transactions resumed with a vengeance. The US government has watched trade with exasperation and even imposed some restrictions on grain exports to the red camp countries. Nevertheless, in 1972, the Soviet Union acquired 20 million tons of American wheat at subsidized (greatly underestimated) prices - almost a quarter of everything that was collected in the fields. About a million tonnes in this supply belonged to the Cargill-Macmillan family.

That year turned out to be a bad harvest around the world: drought destroyed the lion's part of the crops, and the mass sale of grain only aggravated the deficit. The Americans today call the landmark contract nothing more than the "Great Bread Robbery": after the Soviet Union bought up strategic wheat reserves, bread prices in the United States soared. As well as Cargill's profit on all business operations, which more than covered the unprofitable deal with the USSR.

1940: World War: Business Diversification

By 1940, Cargill had become one of the nation's largest grain companies. Half of its business was connected with foreign markets, and the outbreak of world war actually cut off oxygen, "killing" any opportunity to develop further. We had to urgently diversify: the company quickly mastered the production of vegetable oils and animal feed. One business directly flowed from another: when squeezing the oil, a large amount of nutritious pulp remained, which went to feed the cattle.

The company expanded through mergers and acquisitions: in 1943 it bought two soybean processing plants, in 1945 - the manufacturer of animal feed Nutrena Feeds. Diversification continued after the war, despite the fact that the company quickly gained its previous growth rate and by the end of the 1950s reached a turnover of a billion dollars.

Until 1981, Cargill succeeded in producing corn syrup, bought a coal mine and a steel mill, started fattening livestock and processing meat, began to process cotton, germinate barley into malt, grind grain into flour - and, finally, trade in wool, rubber and fiber.

The corporation invested with rare foresight in the sectors of the economy that paid the greatest dividends; luck accompanied her when opening offices in foreign countries: the American government invested in the same regions.

1936: John McMillan Jr. - head of the company. Formation of own fleet

He also insisted that the company combine all its scattered factories, warehouses and elevators under one roof - which happened in 1936, with the birth of Cargill Incorporated. The corporation's presidency was taken by John McMillan Jr.; he made the most of his father's cautious policies. During the Great Depression, John Sr. invested in the construction of additional grain storage facilities and updated the transport fleet, so that the company met the revival of the economy in the mid-1930s fully armed.

The only weak link was sea transport. Freight transportation along the Mississippi River has been handled by the logistics division since 1930. Cargill rented ships and loaded them not only with grain, but also with goods from third-party companies. With the growth of this business, I had to think about creating my own cargo fleet: in 1935, McMillan Sr. signed a contract to buy the first ship and tugboat. McMillan Jr. went further: He set about developing a new, more efficient barge design. However, when the drawings were ready, no shipbuilding company wanted to take on them. McMillan believed so much in the success of the project that Cargill mastered the construction of cargo ships on its own. Soon she was building barges of twice the capacity and half the price of competitors.

This case, by the way, was continued with the outbreak of World War II, when Cargill's shipbuilding skills attracted the attention of the US Navy. The company won a contract to supply the American government with six ocean cargo tankers, as well as to build a port on Mississippi. The order was so severe that a second shipyard on the Hudson had to be opened.

As of 2013, Cargill carries more than just grain: soybeans and sugar are shipped to the company's warehouses from Brazil, palm oil from Indonesia, cotton from Asia and Africa, beef from Argentina, India and Australia, and salt from Venezuela. The corporate fleet eventually grew to a thousand river cargo ships. The company leases another 350 ocean dry cargo ships on charter terms. Cargill ships enter six thousand ports in various parts of the planet. The company has become one of the largest freight carriers in the world.

"To some extent, Cargill can be considered nothing more than a huge logistics company," said Wally Falcon, deputy director of the Center for Food Safety at Stanford University. "It emphasizes the highest efficiency, colossal traffic volumes, low margins - and at the same time manages to be a little smarter and faster than all other players."

Logistics really formed the basis of what is a modern version of the company. The Macmillans were the first to think that it was possible not only to transport cargo from point A to point B, and then sail back empty-handed, but also to capture foreign cargo along the way, spending only on additional loading and unloading operations. Today, ship routes are becoming more complex. A ship that loaded tons of soybeans in the Brazilian port of Santarem and unloaded in Shanghai can sail several thousand kilometers to pick up coal in Australia and deliver it to Japan - and only then return to Brazil for a new portion of beans. In practice, coal and iron ore for third parties, the company carries about twice as much as its own agricultural products. "From places where there's a surplus to places where there's a deficit," that line from the Cargill mission appears to have evolved into its mantra.

1935: Conflict with the Chicago Mercantile Exchange

During the Great Depression, the company developed powerful friends in Congress who helped popularize the ideas of its executives; however, it is impossible to find out details about the persons involved and the nature of their then relationship with Cargill. It is only known that government agencies clicked in 1935 on the Chicago Commodity Exchange, which did not want to accept Cargill into its ranks - and she had to give in.

Chicago was a strategically important region for the company - a transport hub, a source of market information, a place for establishing business contacts. However, John McMillan Jr.'s aggressive style of work was not liked here. Disagreements between the Chamber of Commerce and Cargill heated up in 1937, during the corn futures scandal. Not expecting good wheat yields (sandstorms hit the fields year after year, taking away the fertile topsoil), the company relied on corn. In 1935, it was stocked with huge volumes of this culture. The next two years turned out to be bad harvests, and corn prices jumped sharply. The Chicago Exchange and the Department agriculture USA forced the company to sell some of its stock at current prices, accusing it of creating artificial shortages and monopolizing the market. But Cargill protested, hoping to sell the grain even more expensive after some time. The denouement turned out to be dramatic: the grain company was expelled from the exchange and three of its managers were arrested. A few years later, the sanctions were withdrawn, but McMillan's pride was hurt, and Cargill avoided dealing with Chicago stock brokers for many years, preferring independent traders - until 1962, when the corporation nevertheless joined the trading organization.

1928-1930: Opening of representative offices in Canada, Italy and Argentina

In 1928, he opened the first representation outside the country, in Canada. A year later - in Italian Genoa, and in 1930 - in Buenos Aires, in order to always have at hand confidential information about prices in the South American grain market. The head of the company was known for his crystal honesty and decency. Sending the manager to Argentina, he issued him strict instructions - "not to enter into any negotiations that imply bribes or any other extreme ways of doing business."

1922: New York office opened

Year after year, he restored the reputation of the company, and eventually banking circles tuned in as friendly to it as during the life of William Cargill. For all his conservatism, McMillan managed to give Cargill a boost that took it beyond the local business. Previously, all the company's operations were concentrated in the Midwest: right here, in close proximity to the wheat fields, it sold grain to brokers from the east coast of the United States. Over time, New York brokers dared and began to directly buy wheat from farmers, bypassing intermediaries. McMillan responded by opening his own office in New York in 1922: now he himself could save on brokerage services by being closer to the end customers.

1909: John McMillan - Head of Company

The son-in-law of the founder of Cargill, John Hughes McMillan, took over the business after William's sudden death in 1909. Then the company suffered the first serious crisis. It turned out that the late patriarch left huge debts behind him - largely due to the short-sighted investments of his son William Jr. It was a severe blow to reputation: a company that had been famed for its integrity and integrity for half a century was unable to pay off its obligations, which amounted to almost five million dollars.

John McMillan managed the company until 1936: he not only paid off all creditors (mainly due to the rise in bread prices during the First World War), but also laid the foundation for future growth. A prudent and cautious leader, he adopted as a corporate rule the provision that Cargill would not take part in grain speculation: prices should be adequate to the market.

1891-1895: Rapprochement with the Macmillan family

La Crosse had its own dynasty of Scots with a business acumen. By enterprise, the McMillan family, which traded forest in Canada before moving to the United States, was in no way inferior to the Cargills. Its head Duncan was engaged in wood harvesting and owned several sawmills; in addition, the Macmillans were associated with blacksmithing and had a controlling stake in a gas company that installed lanterns on the streets of La Crosse. By the end of the century, the dynasty traded in lime, coal, coke, tar and tar - and looked at the grain. By 1891, when the Macmillans bought their first elevator, the Cargills had been living next door for several years; the children of the two families played together, and the fathers respectfully raised their hats when they met. The investment, however, turned out to be unprofitable: for three years in a row, the harvest suffered from drought, then from a raid of locusts, and the Macmillans, in order to fulfill their futures obligations, had to buy grain at very high prices. The Cargills during this period dispensed with old reserves.

Problems were most easily solved not by competitors, but by partners; in 1895, the friendly relations of the two families were sealed by marriage: William Cargill's daughter Edna married Duncan McMillan's son John Hughes.

1885: Control of a hundred granaries

Shortly after purchasing the first granary, William was joined by his brothers - Samuel, James and Sylvester. Together they took up the development of the W. W. Cargill Company - they bought new warehouses and elevators in northern Iowa, where the railway turned, and then in Minnesota and Wisconsin. By 1885, the company owned almost a hundred different enterprises in the "bread belt" of the United States, which stored over 50 thousand tons of grain. Once away from the main trade routes, Conover began to lose his appeal to business, and William moved his headquarters to La Crosse Township, to the tri-state border.

1865: William Cargill starts a grain storage business

The founder of the company, William Wallace Cargill, the son of a Scottish sea captain, began his business in 1865 in Conover Township, Iowa. As of 2013, it is an extinct settlement whose residents have dispersed to find work in busier regions. A century and a half ago, it was also deserted here: meadows and fields stretched around on which cows grazed - until one of the local railway lines rested on Konover. Then-President USA Abraham Lincoln believed that the development of the Wild West would go faster if a transcontinental railroad was built. He promised private investors to give land through which they would lay local branches - so that later investors would resell these lands to settlers and recoup the costs of building the road.

Conover was a typical town at the station: in just a year it grew to one and a half thousand residents, among whom there was not a single elderly person. Three hotels were built here, a dozen various shops and 32 saloons were opened. The mayor's office allocated a whole street for warehouses and barns. They were interested in William Cargill, who came to Conover immediately after the end of the Civil War to look for work. He immediately borrowed money and bought one of the simplest granaries.

Cargill's grain business was simple. The spacious multi-storey barn housed containers for storing grain, where it was poured out of bags and then manually mixed to prevent decay. Farmers could rent space in the granary by paying the owner a storage fee and buying insurance. They would deliver the crop to the vault and then decide when to sell the stock. William Cargill kept his own grain in the barn, which he bought from farmers: during the period of surplus supply, immediately after the harvest, the price of it was ridiculous. With the development of the telegraph and railroad, Conover gained access to chambers of commerce in neighboring states, including a major exchange in Chicago. From there, grain sellers adopted the idea of futures contracts where grain supply deals were done before wheat and corn fields were cleaned.

Notes