Archer Daniels Midland

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Archer Daniels Midland Company
Type Public
Traded as NYSEADM
S&P 500 Component
Industry Food processing
Commodities
Founded Minneapolis, Minnesota, United States (1902; 112 years ago (1902))
Headquarters Decatur, Illinois, United States
Key people Patricia Woertz
(Chairman, President and CEO)
Products Foods
Beverages
Feed
Ethanol
Bioenergy
Revenue Increase US$ 89.038 billion (FY 2012)[1]
Operating income Increase US$ 4.021 billion (FY 2012)[1]
Net income Decrease US$ 1.223 billion (FY 2012)[1]
Total assets Decrease US$ 41.553 billion (FY 2012)[1]
Total equity Decrease US$ 18.169 billion (FY 2012)[1]
Employees 30,000 (June 2012)[1]
Website adm.com

The Archer Daniels Midland Company (ADM) is an American global food-processing and commodities-trading corporation, headquartered in Decatur, Illinois.[2][3][4] The company operates more than 270 plants and 420 crop procurement facilities worldwide, where cereal grains and oilseeds are processed into products used in food, beverage, nutraceutical, industrial, and animal feed markets worldwide. On Sept. 24, 2013 ADM announced a planned mid 2014 move of its headquarters out of Decatur, and Chicago was announced as the new site for the world headquarters of the agricultural processing conglomerate.[5]

It was named the world's-most-admired food-production company by Fortune magazine for three consecutive years: 2009, 2010 and 2011.[6]

The company also provides agricultural storage and transportation services. The American River Transportation Company along with ADM Trucking, Inc., are subsidiaries of ADM. ADM's revenues for fiscal year 2012 were US$89 billion.[1]

Products[edit]

Products include oils and meal from soybeans, cottonseed, sunflower seeds, canola, peanuts, flaxseed, and Diacylglycerol (DAG) oil, as well as corn germ, corn gluten feed pellets, syrup, starch, glucose, dextrose, crystalline dextrose, high fructose corn syrup sweeteners, cocoa liquor, cocoa powder, cocoa butter, chocolate, ethanol, and wheat flour. End uses are consumption by people and livestock and additives for fuel.

Long known as a food and ingredients company, it recently[when?] invested in fuel production. ADM nearly doubled capital spending in its 2007 budget to an estimated $1.12 billion. The increase is planned for bioenergy projects, focusing on bioethanol and biodiesel.[7]

History[edit]

In 1902, George A. Archer and John W. Daniels began a linseed crushing business in Minneapolis, Minnesota.[where?] In 1923, Archer-Daniels Linseed Company acquired Midland Linseed Products Company, and the Archer Daniels Midland Company was formed. Every decade since its corporate inception, ADM has added at least one major profit source to its agribusiness, including milling, processing, specialty food ingredients, cocoa, and nutrition.[citation needed]

Chief Executive Officers
Started Name
1970 Dwayne Andreas
1997 G. Allen Andreas
2006 Patricia A. Woertz

In 1970, Dwayne Andreas became the chief executive officer of ADM, and is credited with transforming the firm into an industrial powerhouse. Andreas remained CEO until 1997 before his nephew G. Allen Andreas was named to this position.[8] He was one of the most prominent political campaign donors in the United States,[9] having contributed millions of dollars to Democratic and Republican candidates alike.

In September 1999, executive Marty Andreas announced, under pressure from the European agricultural industry, they were going to separate crops into genetically modified and non-genetically modified groups to give its customers a choice. Previously the company had not disclosed its crop sources.[citation needed]

In 2001, Paul B. Mulhollem became the company's president.[10] Under his guidance, the company was the first U.S. company to sign a contract with Cuba since the embargo against Cuba was imposed October 1960.[11]

In May 2006, Patricia A. Woertz became the company's chief executive officer.[12][13] Formerly of Chevron, she was expected to focus on developing ethanol and biofuels. In February 2007, Ms. Woertz was elected Chairman of the Board at ADM.[14]

On August 22, 2011, the company announced that the soybean processing facility in Galesburg, Illinois, was closing immediately, and its operations would be transferred to other ADM oilseeds facilities. The facility has been idle since April 2011. Some of the 31 employees were to be offered the opportunity to transfer to other ADM facilities.[15]

Starting in October 2012, the company sought to acquire strategic holdings to support serving Asian markets through acquisition of GrainCorp, an Australian grain firm with a network of storage and port facilities in Australia.[13] On 29 Nov 2013, this acquisition was blocked by the Australian Treasurer.

On July 7th, 2014, the company said that it will buy Swiss-German natural ingredient company Wild Flavors for $3 billion, a move aimed at diversifying the company and helping brands appeal to consumers who increasingly favor foods with natural ingredients and flavorings.[16]

Criticism[edit]

Price fixing[edit]

In 1993, the company was the subject of a lysine price-fixing investigation by the U.S. Justice Department. Senior ADM executives were indicted on criminal charges for engaging in price-fixing within the international lysine market. Three of ADM's top officials, including vice chairman Michael Andreas were eventually sentenced to federal prison in 1999. Moreover, in 1997, the company was fined $100 million, the largest antitrust fine in U.S. history at the time.[17] Mark Whitacre, FBI informant and whistleblower of the lysine price-fixing conspiracy, would also find himself in legal trouble for embezzling money from ADM during his time as an informant for the FBI. In addition, according to ADM's 2005 annual report, a settlement was reached under which ADM paid $400 million in 2005 to settle a class action antitrust suit.[18]

Using the investigation as an example, Ronald W. Cotterill, of the Food Marketing Policy Center at the University of Connecticut, showed that 100 percent or more of overcharges resulting from price fixing are passed through to consumers.[19]

The Informant is a nonfiction thriller book written by journalist Kurt Eichenwald and published in 2000 by Random House[20] that documents the mid-1990s lysine price-fixing conspiracy case and the involvement of ADM executive Mark Whitacre. The book was adapted into the 2009 film The Informant!, starring Matt Damon as Whitacre.

Violation of the Foreign Corrupt Practices Act[edit]

On December 20, 2013 the SEC announced that it had charged ADM for failing to prevent illicit payments (bribes) made by its foreign subsidiaries to Ukrainian government officials in violation of the FCPA. ADM agreed to pay more than $36 million to settle the SEC's charges.[21]

Environmental record[edit]

The company has been the subject of several major federal lawsuits related to air pollution. In 2001, it agreed to pay a $1.46 million fine for violating federal and Illinois clean-air regulations at its Decatur feed plant and to spend $1.6 million to reduce air pollution there.[22] In 2003, the company settled federal air pollution complaints related to the its efforts to avoid New Source Review provisions of the Clean Air Act that require pollution control upgrades when a plant is modernized. The company paid $4.5 million in penalties and more than $6 million to support environmental projects. In addition, ADM agreed to eliminate more than 60,000 tons of emissions of carbon monoxide, particulate matter, organic volatile chemicals and other pollutants from 42 plants in 17 states at a cost of hundreds of millions of dollars.[23]

ADM is involved in a joint project with Daimler AG and Bayer CropScience to develop jatropha as a biofuel.[24]

In an attempt to reduce its carbon footprint, the company has partnered with the Midwest Geological Sequestration Association and other organizations to test the disposal of carbon dioxide emissions underground. If testing is successful, beginning in late 2010 the company expected to dispose of 1,000 metric tons per day of carbon dioxide emissions currently being released to the atmosphere.[25]

Agricultural subsidies[edit]

The company lobbies for agricultural subsidies and price supports including sugar and ethanol. According to a 1995 report by the libertarian think tank Cato Institute, "ADM has cost the American economy billions of dollars since 1980 and has indirectly cost Americans tens of billions of dollars in higher prices and higher taxes over that same period. At least 43 percent of ADM's annual profits are from products heavily subsidized or protected by the American government. Moreover, every $1 of profits earned by ADM's corn sweetener operation costs consumers $10, and every $1 of profits earned by its bioethanol operation costs taxpayers $30."[26]

See also[edit]

References[edit]

  1. ^ a b c d e f g "Archer Daniels Midland, Form 10-K, Annual Report, Filing Date Aug 27, 2012" (PDF). secdatabase.com. Retrieved January 13, 2013. 
  2. ^ "Corporate Headquarters." Archer Daniels Midland. Retrieved December 23, 2010. "Corporate Headquarters Archer Daniels Midland Company 4666 Faries Parkway Decatur, IL 62526 United States of America."
  3. ^ "Zoning Map" (PDF). City of Decatur. March 17, 2008 Retrieved December 23, 2010.
  4. ^ "Decatur city, Illinois." U.S. Census Bureau. Retrieved December 23, 2010.
  5. ^ "Archer Daniels Midland, Form 8-K, Current Report, Filing Date Dec 17, 2012". secdatabase.com. Retrieved January 13, 2013. 
  6. ^ Press release (March 3, 2011). "ADM Again Named World's Most Admired Food Production Company". Archer Daniels Midland. Retrieved July 24, 2013.
  7. ^ Fusaro, Dave (March 26, 2007). "ADM’s big bet on fuel". Food Processing. Retrieved June 6, 2007.
  8. ^ "Archer Daniels Midland, Form DEF 14A, Filing Date Sep 17, 1997". secdatabase.com. Retrieved January 13, 2013. 
  9. ^ "Dwayne Andreas", So You Want to Buy a President?, Frontline 
  10. ^ "Archer Daniels Midland, Form 10-K, Annual Report, Filing Date Sep 20, 2002". secdatabase.com. Retrieved January 13, 2013. 
  11. ^ [not in citation given] Roney, Marty (undated). "Alabama Farmers Want to Export More to Cuba". USA Today (via ABC News). Retrieved July 24, 2013.
  12. ^ "Archer Daniels Midland, Form 8-K, Current Report, Filing Date May 1, 2006" (PDF). secdatabase.com. Retrieved January 13, 2013. 
  13. ^ a b Henshaw, Caroline; Berry, Ian (December 20, 2012). "ADM, Graincorp CEOs Square Off". The Wall Street Journal. p. B2. 
  14. ^ "Archer Daniels Midland, Form 8-K, Current Report, Filing Date Feb 6, 2007". secdatabase.com. Retrieved January 13, 2013. 
  15. ^ Pulliam, John R.; Timmons, Eric (August 22, 2011). "ADM Closes Galesburg Soy Facility – Plant's 31 Employees Notified, Operations Moved to Other Oilseed Processors". Journal Star. Retrieved July 24, 2013.
  16. ^ "ADM buys ingredients company Wild Flavors for about $3 billion". chicagotribune. 07 July 2014. 
  17. ^ Hunter-Gault, Charlayne (October 15, 1996). "ADM: Who's Next?". MacNeil/Lehrer Newshour (PBS). Archived from the original on September 30, 2007. Retrieved October 17, 2007. 
  18. ^ Archer Daniels Midland Company. 2005 Annual Report. p. 52, note 15. See report at [1].
  19. ^ Cotterill, Ronald W. "Estimation of Cost Pass Through to Michigan Consumers in the ADM Price Fixing Case". University of Connecticut. 1998. See paper at [2] (PDF).
  20. ^ Webber, Susan (September 25, 2000). "Tale of the Tapes". The Daily Deal (Aurora Advisors, Inc.). Archived from the original on October 6, 2008. Retrieved October 2, 2008. 
  21. ^ "SEC Charges Archer-Daniels-Midland Company With FCPA Violations, Filing Date Dec 20, 2013". SEC. Retrieved December 22, 2013. 
  22. ^ "Archer Daniels Fined Over Clean-Air Rules". Los Angeles Times. January 13, 2001.
  23. ^ Lee, Jennifer 8. (April 9, 2003). "2 Companies Said to Agree to Settle Suits on Emission". The New York Times. Retrieved July 24, 2013.
  24. ^ "Archer Daniels Midland Company, Bayer CropScience and Daimler to Cooperate in Jatropha Biodiesel Project". DaimlerChrysler. Archived from the original on 2009-03-23. 
  25. ^ "Carbon-Sequestration Projects Put Innovative Emissions-Reduction Technology to the Test". Archer Daniels Midland. Retrieved February 26, 2010.
  26. ^ Bovard, James (September 26, 1995). "Archer Daniels Midland: A Case Study In Corporate Welfare". Cato Policy Analysis No. 241. Cato Institute. Retrieved July 24, 2013.

External links[edit]