(Bloomberg) – Rising food prices and turbulent global commodities markets are fueling a surge in wealth for the billionaire family behind America’s largest closely held company.
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Three more members of the Cargill family – siblings James Cargill, Austen Cargill and Marianne Liebmann – have joined the ranks of the world’s 500 richest people thanks to their stakes in Minnesota-based food processor Cargill Inc. Each has a net worth of $ 5.3 billion, according to the Bloomberg Billionaires Index, up 20% this year.
Family members already among the Top 500 include Pauline Keinath, a great-grandaughter of founder William Wallace Cargill, and Gwendolyn Sontheim Meyer with fortunes of $ 7.8 billion each.
More than 20 members of the extended Cargill and MacMillan families control 87% of the closely held company, which was founded in 1865 with a single grain warehouse in Conover, Iowa. The Cargills ranked 11th on Bloomberg’s September list of the world’s wealthiest families with a collective fortune of $ 51 billion at the time.
Russia’s invasion of Ukraine has sent shudders through global food and commodity markets that were already struggling with supply chain disruptions and low output due to drought and other weather conditions. The UN World Food Price Index for March reached a record high, with few signs of easing.
Big food companies have been benefiting from the shortages and volatility. Agricultural trading house Louis Dreyfus Co. said in March that profit surged 82% last year on grain price fluctuations and strong margins in oilseeds. The valuations of some of the largest publicly traded food companies are rising fast, with Illinois-based Archer-Daniels-Midland Co. up more than 25% since Russia invaded in late February.
Cargill has periodically faced pressure to go public, but has resisted. Doing so would dilute the family’s stake and reduce its share of the company’s annual payouts. Family members collect an estimated 17% of net profits each year as a dividend, though not all their shares are equal. Now in its seventh generation, the Cargill-MacMillan extended family has grown to about 125 people.
In August, Cargill reported the biggest profit in its history, with almost $ 5 billion in net income during fiscal 2021 on revenue of $ 134.4 billion.
A spokesperson for the Cargills’ family office, Waycrosse, did not respond to a request for comment.
Gregory Broussard, Cargill’s global head of financial trading at its risk-management unit, told Bloomberg this week that the move to ostracize Russia economically is likely to persist and will force markets to find new sources of everything from grain to fertilizer and fuel.
“We will exit this war from the supply side tighter than we entered it,” he said. “When people start throwing sanctions around, they do not just dissipate overnight.”
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