Cargill: Corporate Rap Sheet
By Philip Mattera
Cargill is one of the world's agribusiness giants, with operations in more than 60 countries and involvement with a wide range of the foodstuffs that make up the planet’s diet. It began as a grain trader and later moved into the processing of wheat, corn, soybeans, cocoa, beef, poultry and much more.
Cargill has frequently been associated with controversies involving food contamination, workplace injuries, anticompetitive practices and environmental violations and has been targeted by climate activists for destroying rainforests in countries such as Indonesia. The company has not been shy about using its power. In his book Invisible Giant: Cargill and Its Transnational Strategies, Brewster Kneen wrote that “Cargill has and will continue to shape the agricultural policy of as many countries and regions as it can.”
The company dates back to 1865, when William Wallace Cargill got started in the grain business in Iowa. With his brothers, Cargill built a large grain elevator business throughout the upper Midwest. His son-in-law John Hugh MacMillan later took over the company and forced out the Cargills. Descendents of Cargill, however, have held a controlling interest in the privately held company ever since.
In the late 1930s the Chicago Board of Trade and the U.S. Commodity Exchange Authority accused the company of trying to corner the corn market. Cargill’s membership in the Board of Trade was suspended. In response, the company chose to operate through independent traders for the next 25 years.
Expansion and Diversification
Cargill subsequently diversified into businesses such as vegetable oil, soybeans and animal feed while building a large international trading network. Cargill was willing to do business with just about any country, including the ideological foes of the United States. It started selling grain to the Soviet Union and Eastern Europe in the early 1960s, but it was a series of giant grain sales to the Soviets in the 1970s that put the company at the center of a major controversy.
The ensuing rise in agricultural prices caused Cargill’s revenues to soar and gave the company the resources for a major expansion in the grain business, in other areas of agribusiness such as high-fructose corn syrup and cocoa processing, and in other industries such as steel (under the name North Star) and coal. Among its purchases was meatpacker MBPXL, later renamed Excel. In 1985 Cargill dropped a controversial plan to import a large quantity of Argentine wheat. It also faced controversy and a federal investigation in the early 1990s over reports that it was skirting U.S. sanctions against dealing with Cuba and Libya.
In 1999, after agreeing to divest some assets to satisfy antitrust regulators, Cargill acquired its chief rival, Continental Grain, solidifying its dominant trading position. Cargill went on to make more acquisitions, including animal feed producer Agribrands International, European corn miller Cerestar, and 65 percent of fertilizer giant IMC Global, which was combined with Cargill’s fertilizer business to form Mosaic Company.
Cargill also expanded its alliances with other agribusiness corporations. In 1998 it formed a joint venture with Monsanto to develop genetically modified food and feed products. During this period, Cargill moved out of the seed business. It sold its overseas seed business to Monsanto and announced plans to sell its domestic seed operations to the German company AgroEvo (a joint venture of Hoechst and Schering). The latter deal fell through after Cargill was sued by Pioneer Hi-Bred for misappropriating proprietary genetic traits developed by Pioneer researchers. In 2000 Cargill agreed to pay $100 million to settle Pioneer’s lawsuit, and several months later Cargill sold the North American seed business to Dow Agrosciences.
Also in 2000, Cargill and Dow formed a corn-based plastics joint venture called Cargill Dow Polymers (Cargill later bought out Dow and renamed the business NatureWorks). In another joint venture deal two years later, Cargill and CHS Cooperatives formed Horizon Milling, which became the leader in U.S. flour milling. It later became even more dominant by taking on the flour business of ConAgra and adopting the name Ardent Mills.
Over the past decade, Cargill’s acquisitions and joint ventures have generally been more modest in size, and it sold off its stake in Mosaic. Yet the company remains one of the very largest agribusiness players, ranking among the top three in fields such as flour milling and soybean crushing as well as grain trading. Also, according to the Feedstuffs 2012 Reference Issue, Cargill is the largest U.S. beef slaughter firm, the second largest commercial feed company, the third largest beef feedlot operator, the third largest turkey processor, and the eighth largest pork processor.
Cargill has a less than exemplary history of environmental compliance. In 1992 the Council on Economic Priorities (CEP) said that the company had the worst environmental record in the agribusiness industry. Cargill’s record was tainted in part by the 1988 spill of 40,000 gallons of phosphoric acid by its Gardinier Inc. subsidiary into the mouth of the Alafia River in Florida. Gardinier agreed to pay a $2 million fine for the accident, which killed a large quantity of fish.
After the CEP’s designation, Cargill claimed to be taking steps to clean up its environmental practices, yet it was fined $121,000 by the U.S. Environmental Protection Agency (EPA) for violations of the Toxic Substances Control Act at its resin plant in Georgia. It also had to contend with legacies of past practices in its industrial as well as its agribusiness operations. In 1995, for example, Cargill and other companies agreed to pay for the cleanup of a Superfund site along with Fox River in Illinois, where toxic chemicals had been dumped for many years.
In 1998 several thousand people had to flee their homes after an explosion at a Cargill fertilizer plant in Maysville, Kentucky where tons of toxic chemicals were stored.
In 2001 North Star Steel, then owned by Cargill, had to apologize and pay $7.7 million to settle allegations that it misled Arizona officials about emissions from the company’s mill near Kingman.
In 2002 Cargill Pork agreed to pay $1.5 million to settle charges that it illegally dumped hog manure at its facility near Martinsburg, Missouri.
Also in 2002, Cargill Salt’s plant in Newark, California spilled more than 30,000 gallons of toxic brine into a canal.
In 2004 a Cargill fertilizer plant in Hillsborough, Florida dumped about 60 million gallons of toxic waste water into a creek that feeds into Tampa Bay. The company later paid a state fine of $270,000 for the incident.
In 2005 Cargill signed an agreement with the U.S. Department of Justice and the EPA settling charges that the company’s plants throughout the country had violated the Clean Air Act. Cargill agreed to pay a fine of $1.6 million and to spend $130 million on pollution reduction.
In 2006 there was a larger spill—some 218,000 gallons—of toxic brine at Cargill’s salt operation in California. It was later fined $228,000 for the incident.
In 2009 Cargill was ordered to pay a fine of $200,000 after pleading guilty to two negligent violations of the Clean Water Act at its meatpacking plant in Fort Morgan, Colorado.
Cargill was targeted by groups such as Greenpeace for allegedly encouraging destruction of Brazilian rainforest to allow for expanded soybean production. In 2006 Greenpeace protesters dumped soybeans at a Cargill office near London and demonstrated at an Amazon River port in Brazil. Two months later the company and other major commodities trading firms responded to the pressure by saying that they would refuse to purchase soybeans grown on newly deforested land in the Amazon region.
Groups such as Rainforest Action Network have also put pressure on Cargill over its use of rainforest resources in the production of palm oil at its refineries in Indonesia. In a 2010 report RAN claimed that Cargill was operating two undisclosed palm oil plantations in West Kalimantan, Indonesia in violation of the Roundtable on Sustainable Palm Oil’s (RSPO) Principles and Criteria and outside of Indonesian law.
Cargill’s beef, pork and poultry operations have had problems with contamination and have periodically had to recall large quantities of food. In late 2000 Cargill had to recall nearly 17 million pounds of turkey products after an outbreak of listeria that was tied to the company’s plant in Waco, Texas. The tainted meat was linked to several death and miscarriages.
In 2001 Excel recalled 190,000 pounds of fresh ground beef and ground pork because of possible E. coli contamination.
In 2002 Emmpak Foods, a Cargill subsidiary, recalled nearly 3 million pounds of ground beef potentially tainted with E.coli bacteria.
In 2004 Excel recalled 45,000 pounds of ground beef after tests revealed E. coli contamination
In 2007 Cargill announced two separate recalls of ground beef totaling nearly 2 million pounds after outbreaks of E. coli poisoning. The recalls included beef that had been treated with carbon monoxide—a controversial process that makes meat look fresher for a longer period.
In 2008 a jury in Wisconsin ordered Cargill to pay $7 million in damages to the Sizzler restaurant chain for lost revenue surrounding an E. coli outbreak in 2000 that was later traced to an Excel plant in Colorado. The company also paid $8.5 million to the family of a child who died in the outbreak.
In 2009 Cargill subsidiary Beef Packers Inc. was involved in two recalls of ground beef—one totaling more than 800,000 pounds and the second 22,000 pounds—linked to outbreaks of drug-resistant salmonella.
In 2010 Cargill recalled 8,500 pounds of ground beef after a link was found to several people who fell ill from a rare form of E. coli.
In 2011 Cargill was responsible for one of the largest meat recalls on record when it recalled 36 million pounds of ground turkey linked to a nationwide outbreak of salmonella. The company was criticized for not moving quickly enough.
In 2012 Cargill found itself in the center of storm of controversy over its role in producing a beef filler dubbed “pink slime” by critics. The following year, the company said it would begin labeling packages of ground beef containing the substance.
Later that year, a Cargill unit recalled about 29,000 pounds of ground beef after it was linked to an outbreak of salmonella.
Occupational Safety and Health Issues
In 1989 the U.S. Occupational Safety and Health Administration (OSHA) cited Cargill’s poultry processing plant in Buena Vista, Georgia for more than 100 willful violations of federal safety and health regulations, proposing a fine of $242,000. Cargill was accused of failing to take steps to prevent repetitive motion disorders such as carpal tunnel syndrome at the plant. The following month, a Cargill turkey-processing plant in Missouri was hit with a proposed $754,000 fine for similar violations. In 1991 Cargill settled these and other alleged violations by agreeing to pay $400,000 and to adopt new ergonomics practices.
In 1996 federal inspectors cited Cargill’s fertilizer operations at two sites in Florida with numerous health and safety violations and proposed fines of more than $48,000 (St. Petersburg Times, March 27, 1996).
In 1997 Cargill’s Ladish Malting unit in Wisconsin was fined $450,000 for a rare criminal violation of federal health and safety laws in connection with the death of a worker who fell some 100 feet from a badly rusted grain elevator fire escape (BNA Labor Relations Week, January 15, 1997). The company appealed and later settled for $425,000.
In 1998 Cargill’s Excel unit agreed to pay $9 million to settle a lawsuit brought by worker seriously injured at a Fiona, Texas plant in an accident involving a scalding-hot lye solution (BNA Labor Relations Week, August 12, 1998).
Later in 1998, Excel was fined $315,500 by OSHA for 45 violations at its meatpacking plant in Fort Morgan, Colorado (BNA Labor Relations Week, January 6, 1999).
In 2011 OSHA cited Cargill for serious and repeated violations at its meat plant in Dodge City, Kansas and proposed fines of $176,400.
Later that year, OSHA cited Cargill for 23 serious violations at its meat plant in Milwaukee and proposed fines of $146,400.
In 2012 OSHA cited Cargill for several violations at its meat plant in Beardstown, Illinois and proposed fines of $114,000.
Labor Relations and Fair Labor Standards
Although Cargill is a party to collective bargaining agreements at a number of its meatpacking plants, the company’s overall labor relations record is mixed. In 1993 it continued to operate its shipping facilities after grain handlers went on strike over company demands for contract concessions.
Cargill resisted union organizing at its case-ready plants (those that produce meat in a form ready to be sold to retail customers). In 2000 a federal judge ruled that Excel had to reinstate five employees discharged during a union organizing drive at one of those plants (BNA Labor Relations Week, May 18, 2000).
In 2002 Teamsters union members at Cargill’s salt mining operation on Ohio went on strike in a dispute over issues such as subcontracting and seniority. The company did not budge from its position and brought in replacement workers. The workers subsequently ended their strike, but Cargill took back only about one-fifth of the union members.
In 1984 Cargill agreed to pay $1.2 million to settle a class action lawsuit concerning race and sex discrimination in its employment practices. Despite that settlement, Cargill was sued again for racial discrimination in 2001, but a judge denied class action status to the suit.
In 2011 the U.S. Labor Department’s Office of Federal Contract Compliance Programs filed a complaint after Cargill, charging it with systematic gender and racial discrimination in hiring for entry-level production jobs at its meatpacking plant in Springdale, Arkansas. In January 2014 the Labor Department announced that Cargill would pay $2.2 million to settle the charges involving Springdale as well as two other plants.
Cargill was one of the corporations named in a 2005 lawsuit filed by the International Labor Rights Fund over the use of child labor in the production of cocoa in West Africa. The lawsuit, Doe v. Nestlé, was filed under the Torture Victims Protection Act and the Alien Tort Claims Act. A federal judge in California dismissed the suit, by the plaintiffs took the case to the court of appeals, where it is pending. ILRF and other groups have continued to pressure Cargill and the other companies to take stronger action to curb child labor.
Antitrust and Anticompetitive Practices
In 1980 Cargill signed a consent decree and agreed to pay $50,000 to settle federal charges that it and three other companies conspired to fix prices of paint resins.
In 1999 the federal Grain Inspection, Packers and Stockyards Administration (GIPSA) charged Cargill’s Excel unit with underpaying farmers who supplied hogs to its slaughterhouses by some $1.8 million.
In 2004 Cargill agreed to pay $24 million to settle an eight-year-old civil lawsuit charging that it and rivals conspired to rig prices for high-fructose corn syrup.
In 2006 a federal jury ordered Cargill to pay $3 million in damages to ranchers who claimed they were underpaid by the company (as well as Tyson and Swift). The verdict was later overturned by a federal appeals court.
In 2010 GIPSA announced that Cargill would pay a penalty of $45,000 to settle charges that it failed to incorporate changes in livestock contracts.
In 2012 the Ohio Attorney General’s office filed suit against Cargill and Morton Salt, accusing them of conspiring to keep the price of road salt artificially high. The case, which is pending, said that the companies “ill-gotten gains” could be as high as $50 million.
In 1981 Cargill pleaded guilty to two charges of underreporting income. It was ordered to pay about $4 million in back taxes and a civil penalty of about $1.5 million.
In 2011 Argentina accused Cargill and other large grain traders of large-scale tax evasion.
In 1999 Cargill and other grain elevator operators and insurance companies agreed to pay the U.S. Department of Agriculture $1.7 million for grain-drying charges that the government had charged were improperly shifted to federal crop insurance programs.
Other Information Sources
Violation Tracker summary page
Campaigns and Watchdog Groups
Key Books and Reports
Cargill: Trading the World's Grain and Cargill: Going Global by Wayne G. Broehl, Jr. (University Press of New England, 1992 and 1998).
Cargill’s Problem with Palm Oil: A Burning Threat in Borneo (Rainforest Action Network, 2010).
Challenges for Regulators: Financial Players in the (Food) Commodity Derivatives Markets (SOMO, November 2012.)
Corporate Agribusiness and America’s Waterways (Environment America, 2010).
Eating Up the Amazon (Greenpeace, 2006).
Final Report on the Status of Public and Private Efforts to Eliminate the Worst Forms of Child Labor in the Cocoa Sectors of Cote d'Ivoire and Ghana (Payson Center for International Development, March 2011).
Greasy Palms: Palm Oil, the Environment and Big Business (Friends of the Earth, 2004).
Invisible Giant: Cargill and Its Transnational Strategies by Brewster Kneen (Pluto Press, 2nd edition 2002).
Merchants of Grain by Dan Morgan (Viking Press, 1979).
The Big Boys: Power & Position in American Business by Ralph Nader and William Taylor (Pantheon Books, 1986); includes a chapter on Whitney MacMillan of Cargill.
The Corporate Reapers: The Book of Agribusiness by A.V. Krebs (Essential Books, 1992).
Note: This piece draws from a corporate profile originally prepared by the author for the Crocodyl website in October 2007.
Last updated April 9, 2014
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