This Platform is composed of seven main business units divided further into subunits (70 in total), each with access to various agricultural actors, companies, sectors, and privileged information regarding current and future supply, demand, and risk. It is argued here that Cargill does so through an information network supported by its Corporate Platform. As Cargill explained in an annual report from 2009: “the insights gathered from many activities and places enabled our trading teams to avoid being stung by plummeting commodity prices” (Cargill 2009). Cargill itself has been open about its profits throughout the price swings. In 2008, when food prices peaked, Cargill reported peak earnings of $744 million (Cargill 2008). This paper builds on this argument and shows how commodity traders maintain access to important information and the possible implications for agro-commodity markets.Ĭargill is the largest of the ABCD traders and is nearly twice the size of its publicly held rival in the food production industry, ADM (Whitford and Burke 2011). As Meyer in the Financial Times, noted, “hysical traders are often the first to know when crops are falling short or energy cargoes are interrupted, giving them the edge over others” ( 2011) implying traders are using inside access to information through their operations to take speculative positions in commodity markets (van Dijk et al. This paper argues that this growth may be opportunistic and the result of access to important information regarding the global supply of agricultural products. These included the “Four Giants” of agribusiness, also collectively known as the ABCD grain traders-that is, Archer Daniels Midland (ADM), Bunge, Cargill, and Dreyfus. Yet, as food prices rose and fell, some agricultural and financial actors saw record high profits and increased power over the global agricultural system. Third, Black River Asset Management, Cargill’s private equity arm, will be analyzed to show how it uses the information moving through Cargill’s Platform to engage in hedging and/or speculation.īetween the years 20 commodity prices were characterized by volatility and unpredictability. Second, Cargill will be positioned within this process by analyzing how it has financialized its own strategies and its Corporate Platform. In order to connect the operations of Cargill to its speculating strategies, this paper first traces how agriculture and finance have become increasingly intertwined leading to heightened agricultural commodity speculation. The case of Cargill-the largest privately owned company in the United States and one of the largest agricultural traders in the world-is used to support this argument by unpacking its operations, structure, and hedging strategies. This paper proposes two interrelated arguments: first, it is argued that agro-commodity traders are uniquely placed at the crossroads of agricultural trade to benefit from agricultural commodity speculation and second, that the networks constituting their operations are central to their hedging activities.
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