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The Archer-Daniels-Midland Company, commonly known as ADM, is an American multinational
food processing Food processing is the transformation of agricultural products into food, or of one form of food into other forms. Food processing includes many forms of processing foods, from grinding grain to make raw flour to home cooking to complex in ...
and commodities trading corporation founded in 1902 and headquartered in
Chicago (''City in a Garden''); I Will , image_map = , map_caption = Interactive Map of Chicago , coordinates = , coordinates_footnotes = , subdivision_type = List of sovereign states, Count ...
,
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 Rock ...
. The company operates more than 270 plants and 420 crop procurement facilities worldwide, where
cereal A cereal is any grass cultivated for the edible components of its grain (botanically, a type of fruit called a caryopsis), composed of the endosperm, germ, and bran. Cereal grain crops are grown in greater quantities and provide more food ...
grains and oilseeds are processed into products used in
food Food is any substance consumed by an organism for nutritional support. Food is usually of plant, animal, or fungal origin, and contains essential nutrients, such as carbohydrates, fats, proteins, vitamins, or minerals. The substance is in ...
, beverage,
nutraceutical A nutraceutical or bioceutical is a pharmaceutical alternative which claims physiological benefits. In the US, "nutraceuticals" are largely unregulated, as they exist in the same category as dietary supplements and food additives by the FDA, un ...
, industrial, and
animal Animals are multicellular, eukaryotic organisms in the biological kingdom Animalia. With few exceptions, animals consume organic material, breathe oxygen, are able to move, can reproduce sexually, and go through an ontogenetic stage ...
feed markets worldwide. ADM ranked No. 54 in the 2020 ''Fortune'' 500 list of the largest United States corporations. The company also provides
agricultural Agriculture or farming is the practice of cultivating plants and livestock. Agriculture was the key development in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that enabled peopl ...
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!''


History

In 1902, George A. Archer and John W. Daniels started a linseed crushing business in
Minneapolis, Minnesota Minneapolis () is the largest city in Minnesota, United States, and the county seat of Hennepin County. The city is abundant in water, with thirteen lakes, wetlands, the Mississippi River, creeks and waterfalls. Minneapolis has its origi ...
. 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 liste ...
. ADM purchased control of the flour milling company Commander-Larabee Corp. in 1930. In 1969, ADM relocated its headquarters to
Decatur, Illinois Decatur ( ) is the largest city and the county seat of Macon County in the U.S. state of Illinois, with a population of 70,522 as of the 2020 Census. The city was founded in 1829 and is situated along the Sangamon River and Lake Decatur in C ...
where they remained for 45 years until moving to Chicago in 2014. 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 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 The United States embargo against Cuba prevents American businesses, and businesses organized under U.S. law or majority-owned by American citizens, from conducting trade with Cuban interests. It is the most enduring trade embargo in modern hist ...
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 as a feedstock for
biofuel Biofuel is a fuel that is produced over a short time span from biomass, rather than by the very slow natural processes involved in the formation of fossil fuels, such as oil. According to the United States Energy Information Administration ...
. 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 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 Juan R. Luciano (born c. 1962) is a US-based Argentine businessman. He serves as the chairman and chief executive officer of Archer Daniels Midland. Early life Luciano was born circa 1962 in Argentina. He grew up on a farm in Ramallo, Buenos Aire ...
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 Glencore plc is a Swiss multinational commodity trading and mining company with headquarters in Baar, Switzerland. Glencore's oil and gas head office is in London and its registered office is in Saint Helier, Jersey. The current company wa ...
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 i ...
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 type ...
. 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 simpl ...
, 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 A carbon footprint is the total greenhouse gas (GHG) emissions caused by an individual, event, organization, service, place or product, expressed as carbon dioxide equivalent (CO2e). Greenhouse gases, including the carbon-containing gases carbo ...
, 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.


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 oils and meal 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 ...
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 seed The sunflower seed is the seed of the sunflower (''Helianthus annuus''). There are three types of commonly used sunflower seeds: linoleic (most common), high oleic, and sunflower oil seeds. Each variety has its own unique levels of monounsat ...
s, canola,
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 an ...
s, flaxseed, Palm kernel, and DAG oil, as well as corn germ, corn gluten feed pellets, syrup,
starch Starch or amylum is a polymeric carbohydrate consisting of numerous glucose units joined by glycosidic bonds. This polysaccharide is produced by most green plants for energy storage. Worldwide, it is the most common carbohydrate in human die ...
,
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 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, usin ...
, crystalline dextrose, high fructose corn syrup sweeteners,
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 ci ...
,
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 Flour is a powder made by grinding raw grains, roots, beans, nuts, or seeds. Flours are used to make many different foods. Cereal flour, particularly wheat flour, is the main ingredient of bread, which is a staple food for many cul ...
. 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 ani ...
, and additives for
fuel A fuel is any material that can be made to react with other substances so that it releases energy as thermal energy or to be used for work. The concept was originally applied solely to those materials capable of releasing chemical energy b ...
. Natural flavors were added to ADM's product portfolio with the 2014 acquisition of Wild Flavors 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 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 oi ...
.


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, 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 The National Linseed Oil Trust of St. Louis, Missouri, was a major company trust formed in 1887 to protect linseed oil interests in the United States. Once used extensively in painting, the oil today is also commonly known as ''flax seed oil''. T ...
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 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. 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 Lysine (symbol Lys or K) is an α-amino acid that is a precursor to many proteins. It contains an α-amino group (which is in the protonated form under biological conditions), an α-carboxylic acid group (which is in the deprotonated − ...
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 Mark Edward Whitacre is an American business executive who came to public attention in 1995 when, as president of the Decatur, Illinois-based BioProducts Division at Archer Daniels Midland (ADM), he became the highest-level corporate executive i ...
, 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. '' The Informant'' is a
nonfiction Nonfiction, or non-fiction, is any document or media content that attempts, in good faith, to provide information (and sometimes opinions) grounded only in facts and real life, rather than in imagination. Nonfiction is often associated with be ...
thriller Thriller may refer to: * Thriller (genre), a broad genre of literature, film and television ** Thriller film, a film genre under the general thriller genre Comics * ''Thriller'' (DC Comics), a comic book series published 1983–84 by DC Comics i ...
book based on this event, which was later adapted into the 2009 film '' The Informant!.''


Tax dodging

A noteworthy case of
transfer mispricing Transfer mispricing, also known as transfer pricing manipulation or fraudulent transfer pricing, refers to trade between related parties at prices meant to manipulate markets or to deceive tax authorities. The legality of the process varies be ...
came to light in 2011 in Argentina involving the world's four largest grain traders: ADM, Bunge,
Cargill Cargill, Incorporated, is a privately held American global food corporation based in Minnetonka, Minnesota, and incorporated in Wilmington, Delaware. Founded in 1865, it is the largest privately held corporation in the United States in te ...
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 Bribery is the offering, giving, receiving, or soliciting of any item of value to influence the actions of an official, or other person, in charge of a public or legal duty. With regard to governmental operations, essentially, bribery is "Corru ...
) 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 ...
s including sugar and ethanol. According to a 1995 report by the
libertarian Libertarianism (from french: libertaire, "libertarian"; from la, libertas, "freedom") is a political philosophy that upholds liberty as a core value. Libertarians seek to maximize autonomy and political freedom, and minimize the state's en ...
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-govern ...
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 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 This is a list of Illinois companies which includes notable companies that are headquartered in Illinois, or were previously headquartered in Illinois. In general, this list does not include companies headquartered in one of the municipalities o ...
* List of S&P 500 companies


References


External links

* * * {{Authority control 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