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From loaves of bread to processed snacks to animal feed, grains make up an enormous part of the American diet and agricultural economy. In 2011, sales of wheat, corn, sorghum, cotton, hay, rice, and oats accounted for over $135 billion of all agricultural output, nearly 95% of agricultural output by sales. Yet here too, control over this industry is increasingly concentrated in the hands of a few giant corporations.

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Corn is the most industrialized of all the grains. Corn comprises bout 40% of all grains, and 30% of all crops, grown in the United States. All that corn is used for livestock feed, ethanol production, and high fructose corn syrup. About 36% of the corn grown in the U.S is consumed by livestock, and around 40% goes to ethanol production. Most of the remaining crop is exported, with a small amount used for domestic food products, like high fructose corn syrup.

One of the main points of control over grain farmers is through seed DNA, as we detail on our GMOs and Seeds page. Food processing is also highly concentrated, with the number of major industrial bakeries reduced to three, as we detail on our Food Processing page.

But for farmers, the most immediate chokepoint most face when selling their grains is in the business of handling, storing, shipping, and trading grain. In the United States—and indeed around the world—these activities are now largely controlled by four companies: Archer-Daniels Midland (ADM), Bunge, Cargill, and Louis Dreyfus. As a group, these four corporations control close to 90% of the global grain trade. And they have high concentration in individual crops as well; for instance, in the United States, Cargill, ADM, and Bunge handle over 70% of the soy crop.

In addition to exercising cross-sector control over the market, these giants are also highly integrated vertically. In some regions of the country, they supply farmers with seeds, fertilizers, and agrochemicals, and then buy the resulting harvest to store in their own facilities. Then the companies might process that grain for use by their subsidiaries. They also have expanded beyond the grain and seed industries and into other agriculture sectors. For instance, Cargill operates several slaughterhouses and works in meat processing and distribution.

In 1998, in then the largest deal in the sector, Cargill acquired the second-largest grain handler, Continental Grain. Since that first blockbuster transaction, mergers and acquisitions have been commonplace in this highly concentrated sector. The companies have collaborated to start new monopolistic enterprises, such as the 2014 creation of Ardent Mills, a merger of mills owned by ConAgra, CHS, and Cargill. Ardent Mills, according to Food & Water Watch, has “a stranglehold over most wheat farmers from the Rocky Mountains to the Mississippi River.” With fewer small companies left to acquire, these giants also buy each other’s operations. In 2015, for instance, Cargill acquired ADM’s chocolate business for $440 million.

These companies are often privately owned, and famously private. It’s hard to know exactly how rich these companies are, and the breadth of their control, given that information about their finances often isn’t publicly available. In 1995, a Mother Jones profile of ADM CEO Dwayne Andreas marked one of the few media appearances of executives of that company. The profile discussed the importance of political savvy and passing legislation to the continued success of commodity companies, and pointed to intimate connections between the Andreas family and Bill Clinton, Bob Dole, and Richard Nixon as just a few examples of how private commodities traders are linked to the political process.

These four giants also have extensive trading operations on Wall Street and in the Chicago Mercantile Exchange, which they use to buy and sell various forms of grain futures. Originally started as a way of guaranteeing farmers a fair price despite variable weather conditions, futures trading has become another arm of our national financial market. Traders speculate on the cost and price of grains to sell contracts for future harvests that may or may not exist. The trades happen at incredibly fast speeds, arbitrarily driving the prices of grains without much connection to actual supply and demand. During the 2000s, traders made over $250 billion in profits, capitalizing on emerging economies like China. This process is explained in greater detail on our Trading page.

The structure of government subsidy programs tends to promote further concentration in the business. Production of corn, like many other commodities, is subsidized through direct payments and crop insurance. While direct payments have a cap at $40,000 per farm, crop insurance has no upper limit. The Congressional Research Service estimates that crop insurance cost about $50 billion between 2000 and 2013. Crop insurance subsidies for corn totaled around $2.8 billion in 2013. Around 75% of federal subsidies go to 10% of farms.

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