The Archer-Daniels-Midland Company, commonly known as ADM, is an American multinational
food processing and
commodities trading
A commodity market is a market that trades in the primary economic sector rather than manufactured products, such as cocoa, fruit and sugar. Hard commodities are mined, such as gold and oil. Futures contracts are the oldest way of investing ...
corporation founded in 1902 and headquartered in
Chicago
(''City in a Garden''); I Will
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,
Illinois
Illinois ( ) is a state in the Midwestern United States. Its largest metropolitan areas include the Chicago metropolitan area, and the Metro East section, of Greater St. Louis. Other smaller metropolitan areas include, Peoria and Rockf ...
. The company operates more than 270 plants and 420 crop procurement facilities worldwide, where
cereal grains and
oilseed
Vegetable oils, or vegetable fats, are oils extracted from seeds or from other parts of fruits. Like animal fats, vegetable fats are ''mixtures'' of triglycerides. Soybean oil, grape seed oil, and cocoa butter are examples of seed oils, or f ...
s are processed into products used in
food,
beverage
A drink or beverage is a liquid intended for human consumption. In addition to their basic function of satisfying thirst, drinks play important roles in human culture. Common types of drinks include plain drinking water, milk, juice, smoo ...
,
nutraceutical,
industrial
Industrial may refer to:
Industry
* Industrial archaeology, the study of the history of the industry
* Industrial engineering, engineering dealing with the optimization of complex industrial processes or systems
* Industrial city, a city dominate ...
, and
animal
Animals are multicellular, eukaryotic organisms in the Kingdom (biology), biological kingdom Animalia. With few exceptions, animals Heterotroph, consume organic material, Cellular respiration#Aerobic respiration, breathe oxygen, are Motilit ...
feed markets worldwide.
ADM ranked No. 54 in the 2020
''Fortune'' 500 list of the largest United States corporations.
The company also provides
agricultural storage and
transport
Transport (in British English), or transportation (in American English), is the intentional movement of humans, animals, and goods from one location to another. Modes of transport include air, land ( rail and road), water, cable, pipelin ...
ation services. The
American River Transportation Company along with ADM Trucking, Inc., are subsidiaries of ADM.
ADM has been the subject of significant media attention and infamy over the years with its various scandals, one inspiring a novel and subsequent film ''
The Informant!
''The Informant!'' is a 2009 American biographical-crime comedy film directed by Steven Soderbergh. Written by Scott Z. Burns, the film stars Matt Damon as the titular informant named Mark Whitacre, as well as Scott Bakula, Joel McHale and Melanie ...
''
History
In 1902,
George A. Archer and
John W. Daniels started a linseed crushing business in
Minneapolis, Minnesota. In 1923, Archer-Daniels Linseed Company acquired Midland Linseed Products Company, and the Archer Daniels Midland Company was formed. ADM expanded its agribusiness to include milling, processing,
specialty food ingredients, and cocoa. In 1924 ADM was listed on the
New York Stock Exchange
The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District of Lower Manhattan in New York City. It is by far the world's largest stock exchange by market capitalization of its listed ...
.
ADM purchased control of the flour milling company Commander-Larabee Corp. in 1930.
In 1969, ADM relocated its headquarters to
Decatur, Illinois where they remained for 45 years until moving to Chicago in 2014.
In 1970,
Dwayne Andreas
Dwayne Orville Andreas (March 4, 1918 – November 16, 2016), was one of the leading farm industrialists of the 20th century.
He was former CEO and chairman of Archer Daniels Midland (ADM). Under his leadership he turned ADM into the larg ...
became the chief executive officer of ADM and is credited with transforming the firm into an industrial powerhouse. Andreas remained CEO until 1997 when his nephew G. Allen Andreas was named to the position.
In 2001, Paul B. Mulhollem became the company's president.
ADM was the first U.S. company to sign a contract with Cuba since the
embargo against Cuba was imposed in October 1960.
In 1989, ADM purchased Collingwood Grain Inc. based in Hutchinson Kansas, adding 48 million bushels of grain storage at 36 terminal elevators.
In May 2006,
Patricia A. Woertz became the company's chief executive officer.
In February 2007, Woertz was elected chairman of the board at ADM.
In January 2008, ADM signed a three-year memorandum of understanding with
Daimler AG
The Mercedes-Benz Group AG (previously named Daimler-Benz, DaimlerChrysler and Daimler) is a German multinational automotive corporation headquartered in Stuttgart, Baden-Württemberg, Germany. It is one of the world's leading car manufactu ...
and
Bayer CropScience
Bayer AG (, commonly pronounced ; ) is a German multinational pharmaceutical and biotechnology company and one of the largest pharmaceutical companies in the world. Headquartered in Leverkusen, Bayer's areas of business include pharmaceutica ...
to explore the use of
jatropha
''Jatropha'' is a genus of flowering plants in the spurge family, Euphorbiaceae. The name is derived from the Greek words ἰατρός (''iatros''), meaning "physician", and τροφή (''trophe''), meaning "nutrition", hence the common name ...
as a feedstock for
biofuel. Starting in October 2012, the company sought to acquire strategic holdings to support serving Asian markets through the acquisition of
GrainCorp, an Australian grain firm with a network of storage and port facilities in Australia.
On 29 Nov 2013, this acquisition was blocked by the Australian Treasurer.
On July 7, 2014, the company announced that it would buy Swiss-German natural ingredient company
Wild Flavors
Wild Flavors, Inc. (stylized as "WILD Flavors") is a manufacturer of flavors, colors, and food and beverage ingredients Its headquarters are in Erlanger, Kentucky and the firm is affiliated with Rudolf WILD GmbH & Co. KG and Dr. Hans-Peter Wil ...
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.
The appointment of current CEO
Juan R. Luciano was announced on November 5, 2014. Luciano joined the company in 2011 as executive vice president and chief operating officer and became president in February 2014. He succeeded Patricia Woertz as CEO in January 2015, and as chairman of the board in January 2016.
In October 2015, ADM announced the sale of its global cocoa business to
Olam International. The sale is valued at about $1.2 billion. Approximately 1,500 employees transferred to Olam with the sale. In January 2017, ADM agreed to sell its
crop risk services (insurance) unit to Validus Holdings for $127.5 million. On January 19, 2018, it was reported that Archer Daniels Midland Co. (ADM) had approached
Bunge Ltd. about a takeover, with details "unclear." At that point, Bunge had a market value of about $9.8 billion, and was also being pursued by
Glencore PLC for acquisition, since May 2017.
In 2018 ADM agreed to purchase the British
probiotic
Probiotics are live microorganisms promoted with claims that they provide health benefits when consumed, generally by improving or restoring the gut microbiota. Probiotics are considered generally safe to consume, but may cause bacteria- host ...
supplement company Probiotics International Limited for $243 million. In 2019, ADM agreed to purchase the remaining 50 percent stake in British grain and oilseed producer Gleadell from the French company InVivo, and completed the acquisition of
animal nutrition
Animal nutrition focuses on the dietary nutrients needs of animals, primarily those in agriculture and food production, but also in zoos, aquariums, and wildlife management.
Constituents of diet
Macronutrients (excluding fiber and water) provide ...
company Neovia for $1.54 billion euros (US$1.73 billion).
Environmental record
The company has been the subject of several major federal lawsuits related to
air pollution
Air pollution is the contamination of air due to the presence of substances in the atmosphere that are harmful to the health of humans and other living beings, or cause damage to the climate or to materials. There are many different typ ...
. 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.
In 2003, the company settled federal air pollution complaints related to 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
Carbon monoxide (chemical formula CO) is a colorless, poisonous, odorless, tasteless, flammable gas that is slightly less dense than air. Carbon monoxide consists of one carbon atom and one oxygen atom connected by a triple bond. It is the simple ...
,
particulate matter,
volatile organic compound
Volatile organic compounds (VOCs) are organic compounds that have a high vapour pressure at room temperature. High vapor pressure correlates with a low boiling point, which relates to the number of the sample's molecules in the surrounding air, a ...
s, and other pollutants from 42 plants in 17 states, at a cost of hundreds of millions of dollars.
In an attempt to reduce its
carbon footprint, the company has partnered with the
Midwest Geological Sequestration Association
The Midwestern United States, also referred to as the Midwest or the American Midwest, is one of four census regions of the United States Census Bureau (also known as "Region 2"). It occupies the northern central part of the United States. I ...
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.
Carbon footprint
ADM reported Total
CO2e emissions (Direct + Indirect) for the twelve months ending 31 December 2020 at 16,230 Kt (-1,570 /-8.8% y-o-y).
[Alt URL]
/ref> ADM plans to reduce emissions 25% by 2035 from a 2019 base year.
Products
Products include oil
An oil is any nonpolar chemical substance that is composed primarily of hydrocarbons and is hydrophobic (does not mix with water) & lipophilic (mixes with other oils). Oils are usually flammable and surface active. Most oils are unsaturated ...
s and meal
A meal is an eating occasion that takes place at a certain time and includes consumption of food. The names used for specific meals in English vary, depending on the speaker's culture, the time of day, or the size of the meal.
Although they c ...
from soybean
The soybean, soy bean, or soya bean (''Glycine max'') is a species of legume native to East Asia, widely grown for its edible bean, which has numerous uses.
Traditional unfermented food uses of soybeans include soy milk, from which tofu a ...
s, cotton
Cotton is a soft, fluffy staple fiber that grows in a boll, or protective case, around the seeds of the cotton plants of the genus '' Gossypium'' in the mallow family Malvaceae. The fiber is almost pure cellulose, and can contain minor pe ...
seed, sunflower seeds, canola
Close-up of canola blooms
Canola flower
Rapeseed oil is one of the oldest known vegetable oils. There are both edible and industrial forms produced from rapeseed, the seed of several cultivars of the plant family Brassicaceae. Historically, ...
, peanut
The peanut (''Arachis hypogaea''), also known as the groundnut, goober (US), pindar (US) or monkey nut (UK), is a legume crop grown mainly for its edible seeds. It is widely grown in the tropics and subtropics, important to both small and ...
s, flaxseed
Flax, also known as common flax or linseed, is a flowering plant, ''Linum usitatissimum'', in the family Linaceae. It is cultivated as a food and fiber crop in regions of the world with temperate climates. Textiles made from flax are known in ...
, Palm kernel
The palm kernel is the edible seed of the oil palm fruit. The fruit yields two distinct oils: palm oil derived from the outer parts of the fruit, and palm kernel oil derived from the kernel.
The pulp left after oil is rendered from the kernel is ...
, and DAG oil, as well as corn germ, corn gluten feed pellets, syrup
In cooking, a syrup (less commonly sirup; from ar, شراب; , beverage, wine and la, sirupus) is a condiment that is a thick, viscous liquid consisting primarily of a solution of sugar in water, containing a large amount of dissolved sugars ...
, starch, glucose
Glucose is a simple sugar with the molecular formula . Glucose is overall the most abundant monosaccharide, a subcategory of carbohydrates. Glucose is mainly made by plants and most algae during photosynthesis from water and carbon dioxide, u ...
, dextrose, crystalline dextrose, high fructose corn syrup
High-fructose corn syrup (HFCS), also known as glucose–fructose, isoglucose and glucose–fructose syrup, is a sweetener made from corn starch. As in the production of conventional corn syrup, the starch is broken down into glucose by enzy ...
sweeteners
A sugar substitute is a food additive that provides a sweetness like that of sugar while containing significantly less food energy than sugar-based sweeteners, making it a zero-calorie () or low-calorie sweetener. Artificial sweeteners may be d ...
, chocolate
Chocolate is a food made from roasted and ground cacao seed kernels that is available as a liquid, solid, or paste, either on its own or as a flavoring agent in other foods. Cacao has been consumed in some form since at least the Olmec civ ...
, ethanol
Ethanol (abbr. EtOH; also called ethyl alcohol, grain alcohol, drinking alcohol, or simply alcohol) is an organic compound. It is an alcohol with the chemical formula . Its formula can be also written as or (an ethyl group linked to a ...
, and wheat
Wheat is a grass widely cultivated for its seed, a cereal grain that is a worldwide staple food. The many species of wheat together make up the genus ''Triticum'' ; the most widely grown is common wheat (''T. aestivum''). The archaeologi ...
flour. End uses are consumption by people, livestock
Livestock are the domesticated animals raised in an agricultural setting to provide labor and produce diversified products for consumption such as meat, eggs, milk, fur, leather, and wool. The term is sometimes used to refer solely to animal ...
, and additives for fuel. Natural flavors were added to ADM's product portfolio with the 2014 acquisition of Wild Flavors
Wild Flavors, Inc. (stylized as "WILD Flavors") is a manufacturer of flavors, colors, and food and beverage ingredients Its headquarters are in Erlanger, Kentucky and the firm is affiliated with Rudolf WILD GmbH & Co. KG and Dr. Hans-Peter Wil ...
and vanilla products were added through the acquisition of Rodelle in 2018.
Long known as a food and ingredients company, it has also 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
Ethanol (abbr. EtOH; also called ethyl alcohol, grain alcohol, drinking alcohol, or simply alcohol) is an organic compound. It is an alcohol with the chemical formula . Its formula can be also written as or (an ethyl group linked to a hyd ...
and biodiesel
Biodiesel is a form of diesel fuel derived from plants or animals and consisting of long-chain fatty acid esters. It is typically made by chemically reacting lipids such as animal fat ( tallow), soybean oil, or some other vegetable oil ...
.
Oilseeds processing
The Oilseeds Processing segment includes global activities related to the origination, merchandising, crushing, and further processing of oilseeds such as soybeans and soft seeds (cottonseed, sunflower seed, canola, and flaxseed) into vegetable oils and protein meals.
The first quarter of 2020, during the COVID-19 pandemic
The COVID-19 pandemic, also known as the coronavirus pandemic, is an ongoing global pandemic of coronavirus disease 2019 (COVID-19) caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The novel virus was first identi ...
, saw the operating profit of Ag Services and Oilseeds (ADM's biggest revenue segment) rise $422 million, or 1.2%.
Corn processing
ADM's Corn Processing segment is engaged in corn wet milling and dry milling activities, with its asset base primarily located in the central part of the United States. The Corn Processing segment converts corn into sweeteners and starches, and bioproducts. Its products include ingredients used in the food and beverage industry including sweeteners, starch, syrup, glucose (dextrose). Dextrose and starch are used by the Corn Processing segment as feedstocks for its bioproducts operations. In 2021, ADM was ranked 2nd on the Top 50 Global Sweetener Companies list by FoodTalks.
Agricultural services
ADM's Agricultural Services segment uses its U.S. grain elevator, global transportation network, and port operations to buy, store, clean, and transport agricultural commodities, such as oilseeds, corn, wheat, milo
Milo may refer to:
Arts and entertainment
* ''Milo'' (magazine), a strength sports magazine
*'' Milo: Sticky Notes and Brain Freeze'', a 2011 children's novel by Alan Silberberg
* ''Milo'' (video game), a first-person adventure-puzzle computer ga ...
, oats, rice, and barley, and resells these commodities primarily as food and feed ingredients and as raw materials for the agricultural processing industry.
Investor services
ADM Investor Services, Inc. is a registered futures commission merchant and a clearing member of all principal commodities exchanges in the U.S. ADM Investor Services International, Ltd., a member of commodity exchanges and clearing houses in Europe, and ADMIS Hong Kong Limited, offer broker services in Europe and Asia.
Scandals
Sherman Antitrust Law violation
In 1920 the US Department of Justice brought suit against the National Linseed Oil Trust for violating the Sherman Antitrust Act. Several co-defendants were named, including the Archer-Daniels Manufacturing Company. The suit alleged all of these companies were acting in collusion
Collusion is a deceitful agreement or secret cooperation between two or more parties to limit open competition by deceiving, misleading or defrauding others of their legal right. Collusion is not always considered illegal. It can be used to att ...
to raise prices, citing a spike in linseed oil costs between 1916 and 1918, when the price rose from $.50 per gallon to $1.80.
Price fixing
In 1993, the company was the subject of a lysine price-fixing investigation by the U.S. Justice Department
The United States Department of Justice (DOJ), also known as the Justice Department, is a federal executive department of the United States government tasked with the enforcement of federal law and administration of justice in the United States ...
. Senior ADM executives were indicted on criminal charges for engaging in price-fixing
Price fixing is an anticompetitive agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given ...
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. Mark Whitacre, FBI
The Federal Bureau of Investigation (FBI) is the domestic intelligence and security service of the United States and its principal federal law enforcement agency. Operating under the jurisdiction of the United States Department of Justice, t ...
informant and whistleblower of the lysine price-fixing conspiracy, would also find himself in legal trouble for embezzling
Embezzlement is a crime that consists of withholding assets for the purpose of conversion of such assets, by one or more persons to whom the assets were entrusted, either to be held or to be used for specific purposes. Embezzlement is a type ...
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. '' The Informant'' is a nonfiction thriller book based on this event, which was later adapted into the 2009 film ''The Informant!
''The Informant!'' is a 2009 American biographical-crime comedy film directed by Steven Soderbergh. Written by Scott Z. Burns, the film stars Matt Damon as the titular informant named Mark Whitacre, as well as Scott Bakula, Joel McHale and Melanie ...
.''
Tax dodging
A noteworthy case of transfer mispricing came to light in 2011 in Argentina involving the world's four largest grain traders: ADM, Bunge, Cargill and LDC. Argentina's revenue and customs service began an investigation into the four companies when prices for agricultural commodities spiked in 2008 and yet very little profit for the four companies had been reported to the office. As a result of the investigation, it was alleged that the companies had submitted false declarations of sales and routed profits through tax havens or through their headquarters. In some cases, they were said to have used phantom firms to buy grain and had inflated costs in Argentina in order to reduce the recorded profits earned in the country. According to the country's revenue and customs service, the outstanding taxes amounted to almost US$1 billion. The companies involved have denied the allegations. To date, the Argentinian tax authorities have not replied to the Swiss NGO Public Eye’s request regarding the current state of the case. In its 2018 annual report to the US Securities and Exchange Commission (SEC), Bunge mentioned provisions which suggest that the case is still ongoing: " of December 31, 2018, Bunge's Argentine subsidiary had received income tax assessments relating to 2006 through 2009 of approximately 1,276 million Argentine pesos (approximately $34 million), plus applicable interest on the outstanding amount of approximately 4,246 million Argentine pesos (approximately $113 million)."
Corruption
The Swiss NGO Public Eye elaborated on a corruption case involving grain giant ADM. An ADM subsidiary pleaded guilty and agreed to pay criminal fines in excess of USD 17 million in 2013 to resolve charges that it had paid bribes, via vendors, to Ukrainian government officials in order to obtain value-added tax refunds. In a parallel action, the grain trader consented to a judgment that ordered ADM to pay close to US$37 million in "disgorgement and pre-judgement interest", which brought the total amount of penalties to more than US$54 million.
Violation of the Foreign Corrupt Practices Act
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. Alfred C. Toepfer International Ukraine Ltd. (ACTI Ukraine), plead guilty in the Central District of Illinois to one count of conspiracy in violation of the anti-bribery sections of the FCPA. They agreed to pay $17.8 million in fines. The Department of Justice also entered into a non-prosecution agreement with ADM due to the company’s failure to implement a system of internal financial controls, addressing improper payments both in Ukraine and by an ADM joint venture in Venezuela. ADM agreed to pay more than $36 million to settle the SEC's charges, bringing the total amount paid to over $54 million.
Agricultural subsidies
The company lobbies for agricultural subsidies
An agricultural subsidy (also called an agricultural incentive) is a government incentive paid to agribusinesses, agricultural organizations and farms to supplement their income, manage the supply of agricultural commodities, and influence the ...
and price support
In economics, a price support may be either a subsidy, a production quota, or a price control, each with the intended effect of keeping the market price of a good higher than the competitive equilibrium level.
In the case of a price control, a p ...
s including sugar and ethanol. According to a 1995 report by the libertarian think tank
A think tank, or policy institute, is a research institute that performs research and advocacy concerning topics such as social policy, political strategy, economics, military, technology, and culture. Most think tanks are non-governmenta ...
Cato Institute
The Cato Institute is an American libertarian think tank headquartered in Washington, D.C. It was founded in 1977 by Ed Crane, Murray Rothbard, and Charles Koch, chairman of the board and chief executive officer of Koch Industries.Koch Ind ...
, "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."[ Bovard, James (September 26, 1995)]
"Archer Daniels Midland: A Case Study In Corporate Welfare"
. Cato Policy Analysis No. 241. Cato Institute
The Cato Institute is an American libertarian think tank headquartered in Washington, D.C. It was founded in 1977 by Ed Crane, Murray Rothbard, and Charles Koch, chairman of the board and chief executive officer of Koch Industries.Koch Ind ...
. Retrieved July 24, 2013.
Sonny Perdue land sale
In 2021, an investigation by the ''Washington Post'' found that ADM had sold land to incoming Secretary of Agriculture Sonny Perdue
George Ervin "Sonny" Perdue III (born December 20, 1946) is an American veterinarian, businessman, politician, and university administrator who served as the 31st United States Secretary of Agriculture from 2017 to 2021. He previously served as t ...
in 2017 at a fraction of its estimated value. Ethics lawyers had legal and ethical concerns about the sale, questioning whether it amounted to bribery. According to the ''Post'', ADM "sold the land at a small fraction of its estimated value just as it stood to benefit from a friendly secretary of agriculture."
See also
* List of Illinois companies
* List of S&P 500 companies
References
External links
*
*
*
{{Authority control
Archer Daniels Midland,
1902 establishments in Minnesota
Chemical companies of the United States
Food and drink companies established in 1902
Conglomerate companies established in 1902
Companies listed on the New York Stock Exchange
Decatur, Illinois
Food manufacturers of the United States
Grain companies of the United States
Price fixing convictions
Starch companies
Multinational food companies