When I Googled this family, the words that came up were silent dominance, middlemen at planetary scale.
All right, Sam, I have a Billy of the Week for you. An MFM classic. This is not just any Billy of the Week. This is one of the biggest Billies in America. One that I wasn't really that aware of. I think you will know more than me about this, but I would say most people don't.
Let me read you. Let me tell you three things about it, then you could take a guess.
Okay. All right. It is the largest private company in America for the last 40 years.
It is owned 88% by the family and has produced more billionaires in one family than any other company ever. They do more revenue than Goldman Sachs, Nike, and Starbucks combined.
You're in the right neighborhood. Estee Lauder.
Okay, you left the neighborhood briefly. Come back to the other neighborhood of like sort of rich redneck families of America.
So the Cargill family. So I didn't really know anything about this family. Can I just tell you a little bit about their story and what they do because this is a dominant business story of all time.
Wait, first tell me why did this interest you? Why'd this catch your attention?
Remember when I was at your house and you were like, 'There's this closet here, by the way, that we found. There's this extra storage room that we didn't even know till we lived here for 2 months.' That's how I felt finding out that one of the most wealthy families in America, and I don't know their story. That's how I felt as the host of My First Million. I just felt like I needed to right a wrong.
And by the way, how did I find it? There was a Reddit thread that was telling me about billion-dollar industries that I probably don't know about, and it was like the first one was SAND, and the second one was this, and the third one is this reinsurance. It's like, well, there's insurance companies, and then they buy insurance, that's called reinsurance, and then the reinsurance, guess what, they have reinsurance companies behind them. It's just insurance all the way down, baby. And so I was reading through this thread, and then one was Cargill, and I was like, oh, Cargill. So what they did, so the story is, back in the day as America was sort of getting its feet and railroads had started to get built, farmers needed to offload their crops, their grain, and they needed to sell them. So they could either sell it individually, so the farm could try to sell individually to a buyer and figure out how to transport it there, or they could work with a middleman. And so Cargill became the biggest middleman on the planet for basically just initially storing grain. So they would go right next to where the railroad is. They would build what's called a grain elevator, which is basically a giant storage facility for grain so that it wouldn't spoil very quickly. And the farmers could come drop it off. They would get like coat check. They'd get an IOU that says, 'I will pay you when your grain sells.' Or they would just buy it at a flat rate like wholesale and be able to flip it. So you could choose as the farmer which one you wanted to do.
This is what my father does for a living, by the way.
Oh, so maybe you should have known.
He does it with onions. But yes, my father's a broker. That's what he does.
Does he store or he just calls one side, hey, I got 75 bushels of this?
Well, it's fresh produce, so the storage is like a day. But yes, there is a place where they sit for like 24 hours before a truck comes and gets it. Yeah. But yes.
And what's interesting about this for me from a business perspective, you always hear this idea of like you don't want to be the middleman. Oh, you can always cut out the middleman. And in this case, the middleman became worth more than everybody else. It actually, if you look at many businesses, there's many businesses where the middleman becomes quite a valuable business. And so there's an interesting question of why. In this case it's because the middleman was physically in the middle. They literally built the grain elevators that would store the grain right next to the railroad. And so you needed to transport it. You needed to get to the railroad. Who else had it? Like nobody else was going to build that. So anyways they start doing that. They then go further and further and further. So, at one point they're like, 'Hey, these shipping barges are so inefficient where we're shipping the grain when it's not traveling by rail. So, we'll build our own shipyard, our own ships.' They end up producing ships for the US Navy. They bought the biggest poultry company, and now they control a huge percentage of the meat industry, of the grain industry. And so, they've built this empire, and nobody really knows them. And basically it's just a family that owns this thing. 88% owned by the family. There's like 20 or something billionaires in the family now. They have this rule called the 80/20 rule. So 80% of all profits will get reinvested back in the business. 20% goes out as dividends to the family and they hire for the last 20 years or so that they've had professional CEOs running the company. It's not like family run anymore.
And the profit per year according to Wikipedia, I think it's like five or six billion dollars.
Yeah. That was like during the peak COVID stuff when Ukraine was getting attacked and Ukraine produces a lot of grain and so their prices spiked. I think it's like three billion in a normal year right now.
Okay. So, you're close to a billion dollars a year of profit that goes just straight to the family and they've been doing that for like whatever 50 plus years. And so I want to tell you a little bit of something interesting. So first I was like, what do they actually do? Because now, when these corporations get so big, so large, they just have their hand in everything. And you would see these comments like, you know, they just everything on your plate. Anything you eat in a package, Cargill had a hand in it. They're controlling the food supply. The people think of like Monsanto style like evil companies. And so just I want to read you this paragraph. So imagine you eat a hamburger. Cargill probably sold the farmer the seed and the fertilizer to grow the grain. They bought the grain from the farmer and stored it at their grain elevator. They shipped it on their barge that they built in their ships that they built to a processing plant where it's processed into animal feed. And then they feed that to cattle who they then slaughter. They then store the meat at their meat packing plants, sell the beef to the restaurant. By the way, the restaurant has to buy their salt. They sell like all of the salt to all of the fast food chains in the country. And then the corn syrup that they processed out of the corn gets put into the ketchup. The soybean oil that's used for the fries, the starch that's used in the milkshake, that's all Cargill. And isn't it crazy how like one company can have a hand in so much of your day-to-day life? And when you think you're eating at some farm-to-table restaurant,
you're really not escaping them because they control the underlying ingredients that are used, the fertilizer, the seeds, the grains, like all of it that gets fed to the cows. Like it all goes back to the source. And isn't that kind of incredible?
And the family is so big and so profitable. They also own a thing called Cargill Macmillan Capital Partners, which is a $10 billion plus size hedge fund.
Correct. Because they have to hedge commodities on behalf of the farmers and for themselves as well at this point.
So they own like a little bit of everything including mines because they need to get their own chemicals and minerals to make all of these things. This is incredible. No famous founder. You know, their office was famously this like chateau looking thing on a lake in the middle of nowhere. And like that was their, it was called the lake office if you Google it. And it's just quiet, you know, like how they say like money talks but wealth whispers. This is wealth whispering. You know what I mean? Like who's the founder? What does he look like? Who's the CEO? What do they talk about? How come they're not on CNBC? Do they do podcasts? No, they don't do podcasts. You know what I mean? Like it is true quiet dominance and actually it was part of their strategy for a long time was to be quiet about it just to not attract competition and to build this monopoly position in the logistics industry.
This is cool. I've known, I've seen their logo and whenever I look at like the largest privately owned companies in America, it's always been there. I never understood what entirely did they do because it's one of those things where you say what they do and it sort of makes sense but it's like a B2B thing so like you don't entirely understand exactly what it does and they say like they sell chemicals and I'm like I don't know what that means, you know, that's so vague. But when you look at the numbers they do $150 billion a year in revenue that's just so massive and I bet you that they own so many more things that you wouldn't even realize. Like for example, like the Walmart family owns like, have you heard of Rapha? It's like a cool bike DTC company.
They own that. Like they just, they're just rich people. They just own stuff.
They just go to the website to buy one and then they just keep pushing plus on quantity until they own all of them.
Like we now have the shop.
That seems like something that this family would do is like you don't realize it. And then if you wanted to get like conspiratorial, which I have not done any research on it, I'm sure that there's like 10 or 20 really interesting conspiracies about how they're pulling the strings behind, you know, it's like there's something going on with this family, which I'm just making it up. I have no idea.
A journalist once described the family as secretive, inbred, and suspicious.
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In 1980, they did a survey, and by then it was already a dominant company, and they did a survey. 94% of farmers had heard of Cargill but only half of them knew what the company actually did. And then amongst politicians, lawyers, and journalists who they call opinion leaders, 50% have heard of them, but only 10% understood what the business was because they have this sort of sprawling empire like you described. People don't really fully understand what they even do. You just sort of know that they're important. I had a friend who I think it was Cargill that she went and worked at because they obviously make so much profit that they were trying to invest in like new seed related, agriculture related, DTC, like I think they invested like we had talked about that one DTC milk company like they would look at things like that like anything interesting and she said it was awesome working for them. She said it was a great company.
Well definitely there's a section called the dark side in my notes here. So let me just tell you some things from the dark side just to be fair here. When you have like global crop production, you're going to have this, which is like accusations of child labor like in Brazil or in Ivory Coast and things like that. They're said to have better intelligence than the CIA. So they basically have a spy network around crops. So like they know more about the state of crops in real time than the US government does around the world. Because it's like life or death for their business. You know, they've had like different E. coli breakouts and stuff like that. Again, if you're touching most of the food supply, then like anything bad that can happen in food is going to happen to you. People just generally feel like they're monopolistic. So, you know, do they care about worker safety number one? Probably not. Probably not in the top three that they care about.
But they're Midwesterners even. They're probably really sweet.
But it's crazy to go from like a single grain shed to now controlling 25% of the entire US export market for grains. And it's like pretty crazy.
So it started 160 years ago. You and I did a talk recently and we were explaining some of our preferences. You were like, I like projects. I like starting something and then potentially selling it but I love the starting phase. I love handing it off to someone and then I love it potentially ending and starting something new. And I was saying how I love things that could potentially go for 50 to 100 years. Not that I've actually done that. I've actually done the same thing as you, projects starting and selling. And I'm so fascinated by companies that can last this long. And this one in particular is one that seems like they've kept it together pretty amazingly for 160 years. That's crazy. So they started before the Civil War and it's still around. Isn't that incredible? And I just find that so fascinating. And like part of me is like, well, when I die, why do I care about legacy? Like we talk about legacy a lot and I was reading something the other day and someone said, why do you care about your legacy? Like who gives a shit? You're dead. And I was like, okay, yeah, I understand that perspective. Like we can have the dichotomy of caring about that and then also like how cool would it be that the thing that you can create can employ 160,000 people 150 years after you're gone. Like I don't know. I think that's awesome. I think it's kind of romantic and exciting. It's kind of like two people can love running and one person's trying to run the 100 meter dash and the other person's running one of these ultramarathon 100 mile races and they're both like, yeah, I love running. And that's what I do and that's kind of like in the business sense there's different ways to approach it. There's what I call the projects approach, which is you kind of go in knowing like, hey, I'm going to have like five great at bats in my career. And I hope each one is a really fun chapter and I'm going to seek variety in those.
It's sort of like being an author. You're like, 'All right, I got five years of research and writing and then a break and then I do it again.'
Exactly. And then there's other people that are brick by brick laying a foundation for an empire. And you know, I respect both, but I know which one I want to do. And I think you know which one you want to do, too. I think you want the empire.
Yeah. I don't know if I'm gonna have the grit to pull it off, but I for sure love the idea of the result.
Do you think the people who do this, is it a temperament difference? Like they're wired differently, therefore, you know, fast twitch, slow twitch muscle type shit, where it's more inherently who you are, or do you feel like you might have the base wiring to do it, but you then need to adopt the systems, right? Like for example, it's not like one guy ran this for 100 years. Now he passed it to his son. His son kind of screws it up. Then the next son sort of saves it out of bankruptcy. And by now professional CEOs run it, but they've instilled values and systems and ownership controls. But you know what? Now the heirs are marine biologists and they're doing other things. They're not running this company but the entity lasts. So which one, where do you think you might fail? Is it the wiring or the systems?
I think the wiring, you start off a certain way, but not always. For example, I think there's a lot of them that would have sold if they could have, but the opportunity just didn't present itself and they just said, 'Screw it. I'll just keep going.' And then I think what happens a lot of times is a few things. Like if you had to build a business and you never thought about selling, there's a world where you would do some wacky stuff that would make the business incredibly profitable but incredibly not sellable. Like you would acquire assets or businesses that don't entirely make sense to one particular buyer. And then you get big enough to the point where you're like, this is a hodgepodge of stuff and it works for us, but no one buyer would ever actually take this. But then I also think that it comes down a lot to the family. And I think that there's something special around family meetings. We've had Rob Dyrdek on here. He talked about that. I actually follow some people on Instagram and they talk about like family meetings.
Explain what you mean. What's a family meeting?
So, the way that I grew up is probably very similar to the way potentially you grew up, but the way a lot of Americans grew up, which is your parents never talked to you about money. If you asked them like how much do you make, they would say like that's none of your business. And there was very little transparency and there was probably very little culture creation in terms of like here's explicitly my expectations of you. Here's our family's culture. Here's our values. And what I've been learning about and frankly what I like is this idea of a family meeting where you get the children and everyone in the same room monthly, quarterly, annually, something like that. And in the same way you run a board meeting, you run a family meeting where you say like here's the values that we stand for. Here's how we did last quarter, last month according to what we said we wanted to achieve. And what about the future? What would you guys like to do? Let's talk about this. And here's the money that we have to spend on whatever dreams and ideas that you have. And let's discuss if it fits within our family credo and mission. And there's actually a way to do that. And I aspired to do that with my family.
My family was like taking minutes, taking meeting minutes, a board observer.
I just think there's something special about being explicit about stuff. I think that a lot of times when you're growing up, there's these things that you say, well, we never really talked about blank, but my feeling was this. But what I would like to experience is like saying like we are actually going to speak what we intend to do and how we will do it and what resources we have to get it done and we'll have a conversation. And I think there's something very special about the families who pull that off.
Yeah, I totally agree. I think it's explicit versus implicit. So it's not even like don't talk about that. It's more just it didn't get said, right? And it doesn't get said not for malicious or secretive reasons. It's just we were busy. I don't know myself, what do you know, it's like I'm not sure I really know the answer to all these things and it's easier just not even think about it, right? It's like if you ask somebody what do you really want, watch people just immediately just start to flounder and it's such a simple question, don't you think you should know what you really want? When I'm meeting new people and I want to make them feel like I care about them, sounds like I'm being nefarious but I mean like I'm trying to get to know someone, I'm like, hey, in the next 6 months anything interesting you want to get done in life or career or family wise? And half the time people are like, 'I don't know.' And it's like the conversation is them discovering it and it's kind of exciting.
Yeah. Exactly. So, I think being explicit. I'm like you. I'm an overcommunicator. I'll take the negatives that come with that because I think the positives are so overwhelming. But how do you do it in a family is kind of interesting. I was at a friend's house and he has this like crest on the wall and he's like, 'Oh, that's our family crest.' And I was like, 'Oh, like my family, we didn't have one. Like I guess my ancestors dropped the ball.' He's like, 'No, like we made this. I painted that like 5 years ago and we just decided what are we all about? There's four quadrants on the crest and we said it's this, this, this, and this.' And this is our sigil. That's our animal.
And I was like, 'You could just do that. You could just be a university. Like I could be Hogwarts right now. The hell?' Like, and I came home and I was like, 'Shit, I'm going to start doing stuff like this.' And so I actually haven't made the crest, but I have done a few other things. Like I gave for each of my kids, they have like a way, like it'd be like Sam's way. So for example, one of my kids, one of them says try and figure it out. Oh, that's the Sam way. And I've said that so many times that now the great father moment is when he'll just be like, well, I just did it, I just did it the same way. And he's using it as shorthand for like I didn't give up. I tried until I figured it out. And my daughter has a different one.
And then we have one that's like for the idea of gifts. So I told him I was like, yeah, like everybody has like some gifts that you were given and my son loves like Pokemon and things like that. So he kind of understands the idea that like you have a superpower and like every character he watches in a show has like a special power. I'm like, yeah, well you have one too. He's like, really? What's mine? And I'm like, well yours is that you're this. And I just get to declare, I give them a reputation to live up to, you know, one that they're today quite inconsistent in but there's moments and all I did is I just highlight those moments. I pretend the inconsistencies don't exist and I just keep reinforcing that until it's their identity and I do that for each of them individually and then one of the downsides is like I make one sound so good I'm like, can I just say that the other one has the same cuz then it feels less special. I have to give the other one equally those but you can also do, you know, it's a little tricky. It's not perfect but man this shit works. It is really powerful and so there's a version of that that's completely non-business related but in creating this like family dynasty idea of how do you instill a culture first in the home before you ever try to go do it in the office.
And I think the likelihood that anyone's children will ever want to work in their business is very low and so like if that even happens and they get along that's like a miracle. And so what I've noticed that is important also, creating long-term trust. So, I talked about this a little bit with the Hearst organization, Hearst company which owns like GQ is like a famous magazine they own, but they also own like a hundred businesses that you never even heard of and they including like they own half of ESPN or whatever. And one of William Randolph Hearst's great inventions was he created this trust within the family that was pretty ironclad and it was very long-term thinking.
Trust like an actual legal trust or you mean trust like the feeling?
