WHO'S WHO IN CORPORATE AGRIBUSINESS???

 

A revealing look into the world of corporate agribusiness can be had by examining three recent reports, two of which were featured in Forbes Magazine and the other in Worth: Financial Intelligence.

As part of its yearly publishing schedule Forbes reported on 1996's 500 largest private corporations. To little or no surprise the list was again led by Cargill, the world's largest grain trader. As a matter of fact five of the top ten privately held U.S. companies, according to the Forbes report are food or food related corporations. Together they have revenues of $119.6 billion, which is 16% of the total $752 billion that the top 500 private corporations recorded in 1996.

The magazine in its annual survey, defines a private corporation as one that either has too few shareholders to have to file financial reports with the Securities & Exchange Commission (SEC), i.e., Mars, or has enough shareholders, but restricts ownership to a narrow group, i.e., Cargill.

In leading the list Cargill showed revenues of $56 billion, followed by number two Koch Industries (oil & gas, chemicals, agriculture, minerals, real estate and finance) with sales of $25.2 billion. Continental Grain, which shares almost equally 50% of the world's grain trade with Cargill, is number four with sales of $15 billion. Mars, maker of candy, ice cream and pet food, rice, beverages and electronics, is number six with $14 billion in revenues and Publix Super Markets, which operates 525 supermarkets in Alabama, Florida, Georgia & South Carolina, is number nine with $9.39 billion in sales.

United Parcel (3), Goldman Sachs Group (5), Ingram Industries (7), Anderson Worldwide (8) and Bechtel Group (10) complete the list of the top ten private firms.

The second Forbes report was their Annual Report on American Industry. Here are listed how profitable the 1280 corporations that dominate the various industry sectors of the U.S. economy were in the past year and what their profitability was on the average for the past five years.

Unlike years past, where it has usually ranked in the top three, the food, beverage and tobacco industrial sector, the very soul of corporate agribusiness, did not fare as well as it has in the past. Ranked 12th among the top 20 it showed a 10.1% five-year average annual return on capital which, nevertheless, still put it above the all-industry median of 9.8%.Despite it's rather sluggish showing as a whole, however, there were some extraordinary results from both the highly concentrated U.S. cereal and tobacco market sectors.

Health services (14.1%), chemicals (12.3%), financial services (12.2%), consumer nondurables (12.2%) and insurance (12.1%) finished in the top five.

The third report, appropriately titled "This Land is THEIR LAND" by William P. Barrett lists "America's Top 100 Land Barons." In the introduction to the study it is noted that "taken as a group with number one owning 1.3 million acres (R.E. "Ted" Turner) and number 100 owning 95,000 (Taylor Family of Amarillo, Texas), they hold more than one percent of the country, a land mass the size of Kentucky."

While much of the land reported is both in the West and in timber there are some major corporate agribusiness land holdings among these 100 landowners.

Although many of these land barons refused to be interviewed for Barrett's article Ted Turner was quite open about his beliefs and philosophy when it comes to land ownership. In discussing land as an investment he notes:

"I could make a fortune developing my land, but I've chosen not to. Land only gives you a good return when you start subdividing it or building on it and charging rent. Or if you sell it. I won't do any of that. I didn't buy the land as an investment. I bought it because I liked it."

And commenting on land as impermanence he adds, "The Indians thought that they owned the land. We think that we own the land . . . The land will be up for grabs again."

CORPORATE AGRIBUSINESS'S PRIVATE TOP TWENTY-FIVE

	Corporation	Revenues (Millions)	Net Profit (Millions)	Businesses
1	Cargill	$56,000	$902	International marketer and processor of agricultural and industrial commodities, financial services
2	Koch Industries	$25,200	$850	Oil and gas, chemicals, agriculture, minerals, real estate and financial
3	Continental Grain	$15,000	$240	Markets commodites, processes poultry, runs cattle feed lots, financial services and aquaculture
4	Mars	$14,000	$800	Makes candy, ice cream and pet food, rice, beverages and electronics
5	Publix Super Markets	$9,393	$242	525 supermarkets in Alabama, Florida, Georgia & South Carolina
6	Aramark	$6,120	$110	Distributes food to hospitals and schools, health care and other services
7	Meijer	$6,000	$170	General merchandise and grocery stores in the Midwest
8	Borden	$5.944	-$366	Cracker Jack, soups, and food and dairy products, industrial products
9	HE Butt Grocery	$5,800	$99	H-E-B and H-E-B Pantry Food Stores, milk plant and bread bakery in Texas
10	Ralph's Grocery	$4,335	-$260	Supermarkets in California and the Midwest
11	Alliant Foodservice	$4,226	$50	Distributes food to restaurants, hospitals and other nonretail outlets
12	Pathmark Stores	$4,182	$33	Supermarkets and drugstores in eastern U.S.
13	C&S Wholesale Grocers	$3,348	$40	Wholesales food to supermarkets, retail stores and military bases
14	Hy-Vee	$2,800	$30	Hy-Vee Food stores, Drug Town drugstores and Heartland Pantry convenience stores
15	J.R. Simplot	$2,700	$122	Processes potatoes, vegetables, chesse and other foods, fertilizer and livestock
16	Randall's Food Markets	$2,400	$34	Tom Thumb Food and Pharmacy, Randall's Food & Pharmacy stores
17	Schwan's Sales Enter.	$2,338	$111	Delivers frozen pizzas and other frozen foods to homes, hospitals and schools
18	Giant Eagle	$2,160	$28	Supermarkets in Pennsylvania, Ohio, West Virginia, wholesale food
19	Red Apple Group	$2,150	$37	Supermarket chain in New York City, refines oil, real estate
20	Wegmans Food Markets	$2,130	$23	Wegmans Food Market stores, Chase-Pitkin home and garden centers
21	Southern Wine & Spirits	$2,125	$43	Distributes wine and spirits
22	Core-Mark International	$2,100	$21	Distributes tobacco products, candy and health and beauty aids
23	Perdue Farms	$2,100	$58	Processes poultry
24	TLC Beatrice Int. Holdings	$2,073	$15	Wholesales and retails food in Europe, makes ice cream and other desserts
25	Specialty Foods	$1,975	-$270	Breads, cookies, specialty cheeses, premium snacks and other food products

PROFITABILITY: Corporate Agribusiness's Top Twenty

Five Year Average (Profitability*): 1-U.S. Tobacco (73.9%); 2-Coca-Cola (42%); 3-Quaker Oats (34.5%); 4-William Wrigley Jr. (34%); 5-Kellogg's (25.2%); 6-Lancaster Colony (24.6%); 7-Kroger (24.5%); 8-General Mills (24.4%); 9-Campbell Soup (22.8%); 10-Quality Food Centers (21.2%); 10-Albertson's (21.2%); 12-Winn-Dixie Stores (21%); 13-Pioneer Hi-Bred International (20.5%); 14-Philip Morris (19.9%); 15-Brown-Forman (17.9%); 16-CPC International (17.6%); 16-Hormel Foods (17.6%); 18-HJ Heinz (16.7%); 19-Ralston Purina (16.4%), and 20-Iowa Beef Processers (16.2%).

 

Industry Median (10.1%). All-Industry Median (9.8%)

 

Latest 12 Months (Profitability*): 1-U.S. Tobacco (117.4%); 2-Coca-Cola (50.9%); 3-William Wrigley Jr. (27.2%); 4-Kroger (25.9%); 5-General Mills (25.7%); 6-Philip Morris (24.8%); 7-Lancaster Colony (24%); 8-Pioneer Hi-Bred International (23.4%); 9-Albertson's (19.7%); 10-Southland (19.4%); 11-Winn-Dixie Stores (19.3%); 12-Campbell Soup (19.2%); 13-Ralston Purina (19.1%); 14-Hershey Foods (19%); 15-Safeway (18.2%); 16-Iowa Beef Processors (18.1%);17-Brown-Forman (17.8%); 18-CPC International (17.4%); 18-Shoney's (17.4%), and Richfood Holdings (17%).

 

Industry Median (9.6%). All-Industry Median (9.6%).

 

* Profitability: For return on Capital FORBES divides the sum of three items --- aftertax profits, the amount remaining if the interest paid on the long-term debt were taxed and minority interest --- by a firm's total capitalization.

 

Return on Equity* (Latest 12 Months): 1-General Mills (154.2%); 2-US Tobacco Inc. (153.5%); 3-Foodmaker (63%); 4-Coca-Cola (62.5%); 5-Quality Food Centers (50.5%); 6-Safeway (47.2%); 7-Coca-Cola Bottling (45.8%); 8-Ralston Purina (45.7%); 9-Philip Morris (44%); 10-Foodbrands America (37.2%); 11-Triac Cos. (30.4%); 12-William Wrigley (27.9%); 13-Hershey Foods (26.5%); 14-Brown Forman (26.1%); 14-Lancaster Colony (26.1%); 16-CPC International (25.9%); 17-Campbell Soup (25.7%); 18-Albertson's (25.3%); 19-Anheuser-Busch (24.6%), and 20-Pioneer Hi-Bred International (24.5%).

 

Industry Median (14%). All-Industry Median (13%).

* Return on Equity: Calculated by taking primary earnings per share and dividing it by common shareholders' equity per share at the start of the fiscal year.

 

SOURCE: FORBES 49th Annual Report On American Industry, January 18, 1997

LAND BARONS: Agribusiness's Top Thirty

1-R.E. "Ted" Turner (Roswell, Georgia) - 1.3 million acres (New Mexico and Montana)

2-Henry E. Singleton (Beverly Hills, California) - 1.15 million acres (New Mexico and California)

3-King Ranch Heirs (Kingsville, Texas) - 860 thousand acres (Texas, Florida and Kentucky)

4-Lykes Family (Tampa, Florida) - 640 thousand acres (Florida and Texas)

5-Dolph Briscoe Jr. (Uvaide, Texas) - 600 thousand acres (Texas)

6-E.W. Biggs & A.B. Wharton III (Vernon, Texas) - 525 thousand acres (Texas)

7-East Family (Zapata, Texas) - 500 thousand acres (Texas)

8-Robert Earl Holding (Salt Lake City, Utah) - 500 thousand acres (Wyoming, Montana, Utah, Idaho and other Western states

9-O'Connor Family (Victoria,Texas) - 375 thousand acres (Texas and elswhere)

10-Clarence Scharbauer Jr. (Midland, Texas) - 355 thousand acres (Texas and New Mexico)

11-Anne Burnett Marion (Ft. Worth, Texas) - 350 thousand acres (Texas)

12-J.R. Simplot (Boise, Idaho) - 310 thousand acres (Idaho, California, Nevada, Washington, Oregon and Utah)

13-Bass Family (Ft. Worth, Texas) - 300 thousand acres (Oklahoma, Texas, Nebraska, California, New Mexico, Kansas, Hawaii and Colorado)

14- Lee Family (San Mateo, New Mexico) - 300 thousand acres (New Mexico)

15-Reynolds Family (Fort Davis, Texas) - 300 thousand acres (Texas)

16-Sugg Family (San Angelo, Texas) - 295 thousand acres (Texas)

17-Lane Family (Chicago, Illinois & Tucumcari, New Mexico) - 290 thousand acres (New Mexico)

18- Cogdell Family (Tulia & Floydada, Texas) - 285 thousand acres (Texas)

19-David L. Walker (Fort Pierce, Florida) - 245 thousand acres (Nevada)

20-Ellwood Heirs (Colorado City, Texas & Chicago, Illinois) - 240 thousand acres (Texas and New Mexico)

21-Gerald Lyda Sr. (San Antonio, Texas) - 235 thousand acres (Texas and Oklahoma)

22-Koch Family (Wichita, Kansas) - 220 thousand acres (Texas, Kansas and Montana)

23-John Irwin (New York, N.Y.) - 215 thousand acres (Arizona and California)

24-Philip Anschutz (Denver, Colorado) - 200 thousand acres (Wyoming, Utah and Colorado)

25- Lester Clark (Breckenridge, Texas) - 200 thousand acres (Texas and South Dakota)

26-Joe Finley Jr. (Encinal, Texas) - 200 thousand acres (Texas)

27-Garvey Family (Wichita, Kansas & Elsewhere) - 200 thousand acres (Nevada)

28-Killam Family (Laredo, Texas) - 200 thousand acres (Texas)

29-Gage Family (San Antonio & Marathon, Texas) - 190 thousand acres (Texas)

30-James G. Bowsell II (Los Angeles, California) - 185 thousand acres (California and Arizona)

 

SOURCE: Worth: Financial Intelligencer: America's Top 100 Land Barons, February, 1997.