Everything about The Archer Daniels Midland totally explained
The
Archer Daniels Midland Company, is a
conglomeration based in
Decatur, Illinois. ADM 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 Specialty Food Ingredients
Food Additives, Lecithin, Protein, ADM
Milling, ADM Natural Health & Nutrition
Vitamin E & Sterols, ADM Food Oils. The
American River Transportation Company along with
ADM Trucking, Inc are subsidiaries of ADM. ADM's
revenues for fiscal 2007 (ending
June 30 2007) were
US $44 billion.
Products
Typical products include
oils and
meal from
soybeans,
cottonseed,
sunflower seeds,
canola,
peanuts,
flaxseed, and
Diacylglycerol (DAG) oil, as well as
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.
Long known as a food and ingredients company, ADM has recently shifted increasing resources towards fuel production. According to
Foodprocessing.com
, a food industry trade publication, ADM nearly doubled capital spending in its 2007 budget to an estimated $1.12 billion. All of the increase is planned for bioenergy projects, with a particular focus on
ethanol and
biodiesel.
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 hadn't disclosed their crop sources.
In 2001,
Paul B. Mulhollem became the President of ADM. He made history by becoming the first U.S. company to sign a contract with Cuba since forty years ago when the embargo was first passed.
In May
2006,
Patricia A. Woertz became CEO. Formerly of
Chevron, she's expected to focus on developing
ethanol and
biofuels. In February of 2007 Ms. Woertz was elected Chairman of the Board at ADM.
Price fixing
In
1993, ADM 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 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 at the time(1997). 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.
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.
Environmental record
Archer Daniels Midland has been the subject of several major federal lawsuits related to air pollution. In 2001 the company 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. Based on year 2000 data, ADM was listed as the tenth largest air polluter in the USA by the Political Economy Research Institute. In 2003, ADM settled federal air pollution complaints related to the company's 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, particulate matter, organic volatile chemicals and other pollutants from 42 plants in 17 states at a cost of hundreds of millions of dollars.
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."
In 1994, the New York Times wrote "the Clinton Administration's policy on emission-reducing renewable fuels -- in essence, ethanol made from corn -- is little more than a politically inspired gift to farmers and corn processors, especially the Archer Daniels Midland Company".
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.
Archer Daniels Midland, along with
Cracker Barrel and
Nestle Purina Pet Care, achieved the lowest score (15 out of 100) of all rated Food and Beverage companies in the
Human Rights Campaign's 2008
Corporate Equality Index, a measure of
Gay and
Lesbian workplace equality..
The company is now facing its first-ever markets campaign, as the environmental group Rainforest Action Network is pressing ADM to stop its expansion into tropical rainforests in Brazil and Southeast Asia to grow soy and palm oil for biofuels.
Movie
- A movie portraying the ADM scandal is currently in the works and is entitled The Informant. The movie is based on the Kurt Eichenwald book by the same title. The film stars Matt Damon and is slated for release in 2009. Filming will begin on April, 2008 in Decatur.
- Michael Clayton (film) features U-North, an agricultural industry conglomerate that uses image advertising, a thinly veiled reference to ADM.
Further Information
Get more info on 'Archer Daniels Midland'.
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