Alan Guebert is an Illinois farm journalist.
From Poland to Paraguay, Winnipeg to Washington, G. Allen Andreas has made a mark since his late-April anointment to replace Uncle Dwayne as Archer Daniels Midland’s chief executive officer.
Andreas the Younger seems to be following the business strategy perfected by Andreas the Elder: either dominate, segregate or litigate. Another favorite practice continues, also: farmers are preferred partners in ADM acquisitions.
In the domination arena, ADM has moved from a non-player to the number one player in the international cocoa business in less than a year through rapid acquisitions. According to analysts, ADM’s annual cocoa processing capacity now tops 450,000 tonnes. That’s 100,000 more than second-place Callubaut-Berry, and 200,000 more than third-stringer Cargill.
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The three now dominate the industry with about 40 percent of the world’s annual processing capacity.
ADM has solidified its position in traditional operations, also. On May 23, ADM announced its intention to purchase 58 owned or rented grain elevators in Brazil and Paraguay. Two of the elevators are Brazilian port terminals.
On May 28, Minnesota Corn Processors, a 5,500-member farmer co-op based in Marshall, Minn., agreed to sell a big minority stake in its fructose and ethanol-making business to ADM for about $120 million.
One MCP farmer-member lamented that ADM and MCP were direct competitors and because of that, ADM played no small role in the $60-million loss racked up by MCP last fiscal year:
“Now they come in as a white knight to save us poor, dumb farmers. What could we do? MCP was headed into the tank.”
The next day, May 29, ADM and United Grain Growers announced an alliance which could make ADM a 45-percent owner of UGG if shareholders OK the deal in July.
As farmers from Manitoba and Minnesota were lining up to partner up with ADM, lawyers from Washington, D.C., to California were lining up to take a bite out of ADM. So were Europeans.
In mid-May, a two-year-old Swiss lawsuit filed by ADM against Mark Whitacre was quietly dropped. Whitacre is the ex-ADM executive whose ever-present tape recorder led to ADM paying a $100 million criminal fine for anti-trust violations last October.
On June 10, four major American firms sued five citric acid makers, including ADM, alleging overpayment for citric acid purchased from 1991 to 1995. The suit seeks more than $1 billion in damages. Two days later, European Union investigators raided the European offices of ADM and two other firms, seeking documents and information on alleged price-fixing in the amino acid market.
Then, on June 19, a federal judge in Peoria, Ill., ordered the U.S. Department of Justice to turn over secret FBI tape recordings made by Whitacre that deal with lysine price-fixing. The ruling came at the request of plaintiffs in another lawsuit seeking damages from ADM and other high-fructose corn syrup makers for alleged price-fixing.
In the midst all this global hyperactivity, attorneys hired by ADM conducted a May 28 deposition of an ADM shareholder to gather information for its civil lawsuit against Whitacre. The 71-page transcript of the deposition contains only one piece of news:
“Q(uestion). (D)id you have a conversation with a reporter named Guebert … in which you told him that tapes made by Mr. Whitacre were, in effect, still in existence in November or December 1996 or January 1997?”
To me that’s big news because, despite all the global dominating, farmer segregating and courthouse litigating of the past two months, it’s nice to know the new ADM boss still has time to keep track of us little folks.
