Archer Daniels Midland
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| Archer-Daniels-Midland Co | |
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| Type | Public (NYSE: ADM) |
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| Founded | Minneapolis, Minnesota (1902) |
| Headquarters | Decatur, Illinois |
| Key people | G. Allen Andreas, Chairman Patricia A. Woertz, CEO & President |
| Industry | Agribusiness |
| Products | foods, beverages, feed, ethanol |
| Revenue |  $35,943.8 million USD (2005) |
| Employees | 25,641 (June 30, 2005) |
| Slogan | Resourceful By Nature |
| Website | www.admworld.com |
The Archer Daniels Midland Company (NYSE: ADM), based in Decatur, Illinois, operates more than 270 plants worldwide, where cereal grains and oilseeds are processed into numerous products used in food, beverage, nutraceutical, industrial and animal feed markets worldwide.
ADM also provides agricultural storage and transportation services. Company divisions include: ADM Cocoa, ADM Corn Processing, ADM Food Additives, ADM Lecithin, ADM Milling, ADM Monoglycerides, ADM Vitamin E, ADM Protein Specialties, ADM Food Oils. The American River Transportation Company is a subsidiary of ADM. ADM's revenues for fiscal 2005 (ending June 30, 2005) were US $35,943.8 millions.
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[edit] Products
Typical products include oils and meal from soybeans, cottonseed, sunflower seeds, canola, peanuts, flaxseed and corn germ, syrup, starch, glucose, dextrose, crystalline dextrose, High fructose corn syrup sweeteners, ethyl alcohol, and wheat flour. End uses are consumption by people and livestock, and fuel additives.
[edit] History
In 1902, George A. Archer and John W. Daniels began a linseed crushing business. 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 center to its agribusiness: milling, processing, specialty feed ingredients, specialty food ingredients, cocoa, nutrition, and more.
In September 1999, executive Marty Andreas announced that, under pressure from the European agricultural industry, they were going to separate crops into genetically modified and non-genetically modified groups to give their customers a choice. Previously the company had not disclosed their crop sources.
In May 2006, Patricia A. Woertz became CEO. Formerly of Chevron, she is expected to focus on developing ethanol and biofuels. In February of 2007 she became Chairman of the Board at ADM.
[edit] Price fixing investigation
In 1996, ADM was the subject of a 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, the company was fined $100 million, the largest antitrust fine in U.S. history.[1] 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.[2] Kurt Eichenwald wrote a non-fiction book The Informant describing the investigation.
Using the investigation as an example, Ronald W. Cotterill of the Food Marketing Policy Center at the University of Connecticut shows that 100 percent or more of overcharges resulting from price fixing are passed through to consumers.[3]
Howard Buffett, son of billionaire Warren Buffett, served at one time as an ADM vice president and as a member of the Board of Directors. However, Buffett resigned as VP in the wake of the FBI price fixing investigation. In addition, he has since resigned his seat on the board.
[edit] Criticism of ADM
ADM's receipt of federal agribusiness subsidies have come under criticism. According to the Cato Institute, a Libertarian think tank, "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 ethanol operation costs taxpayers $30."[4]
ADM's lobbying and campaign contributions have encouraged the continuation of the United States federal sugar program (of trade barriers and price supports) by Congress, costing US consumers roughly $3 billion a year.[citation needed] ADM also lobbied to create and perpetuate federal ethanol subsidies. Some commentators have concluded that the ADM experience demonstrates the need for campaign finance reform.[citation needed]
ADM advertises extensively on national television, which is unusual for a company that does not sell to consumers. According to the company, its "Resourceful by Nature" 2006 television advertising campaign is intended to demonstrate "...[the] relationship between ADM and the farmer — and its importance to the [US] economy and [US] way of life."
One of the cashiers checks encountered by Woodward and Bernstein in the Watergate affair, and deposited into one of the burglars accounts, to finance the break-in, was actually an anonymous corporate donation to Nixon from ADM.[citation needed]
In July 2005, the International Labor Rights Fund filed suit against the Nestle, Archer Daniels Midland, and Cargill companies in Federal District Court in Los Angeles on on behalf of a class of Malian children who were trafficked from Mali into the Ivory Coast and forced to work twelve to fourteen hours a day with no pay, little food and sleep, and frequent beatings. The three children acting as class representative plaintiffs are proceeding anonymously, as John Does, because of feared retaliation by the farm owners where they worked. The complaint alleges their involvement in the trafficking, torture, and forced labor of children who cultivate and harvest cocoa beans which the companies import from Africa.
[edit] References
- ^ Hunter-Gault, Charlayne. "ADM: Who's Next?" MacNeil/Lehrer Newshour. PBS. October 15, 1996. See transcript here [1]
- ^ Archer Daniels Midland Company. 2005 Annual Report. p. 52, note 15. See report at [2]
- ^ Cotterill, Ronald W. "Estimation of Cost Pass Through to Michigan Consumers in the ADM Price Fixing Case". University of Connecticut. 1998. See paper at [3]
- ^ Bovard, James. "Archer Daniels Midland: A Case Study In Corporate Welfare". Cato Policy Analysis No. 241. CATO Institute. September 26, 1995. See study at [4]
[edit] External links
- Archer Daniels Midland website
- International Labor Rights Fund
- Patents owned by Archer Daniels Midland. US Patent & Trademark Office. Retrieved on December 6, 2005.
