Archer Daniels Midland Company

May 27, 2004

Economics 202- 9:00

The agricultural economy is not well known to many people because in our nation most people do not work for companies that are involved in agriculture and most people do not work on farms. The farm industry may be very large but it could be considered as one of the most important industries, because everyone in the world needs something produced on a farm. Most of the companies that are part of the farm or agricultural industry are large but not always well known. Most of these companies are spread throughout the whole United States, if not the world. Most companies in the agricultural industry are well put together and they have people that work for the company that know a lot about the industry and without all of these people the companies would not be what they is today. ADM is a large company that has been spreading and has had lawsuits because of the price hikes that they put on their products. ADM has proven to be a company that knows what it is doing throughout the years but when they try to cheat to get more money out of their products they get caught. ADM has worked their way up the ladder and they find a way to get better at what they do. Even though not many people know of ADM their common everyday products can have some of the ADM products it is used in many different parts of the world.

Archer Daniels Midland Company is a large company that is not known by many people it is part of the fortune 500 even though it is located in Illinois most people have not even heard of the company. Archer Daniels Midland Company also known as (ADM) is a very successful farming company. ADM was founded in 1902 by George P. Archer and John W. Daniels. The ADM headcounters are located in Decater, Illinois even though they are based in Illinois they are incorporated in Delaware. ADM has over 270 processing plants worldwide with sales in over 40 countries and joint venture investments in 71 countries and has over 500 grain elevators. ADM is a globalized company though most of their business is done in the United States they employ over 25,000 around the world people which is a large number all together. ADM is one of the more dominant companies in its business, ADM has been improving over the years even though it has hit a few bumps such as some lawsuits. Through these lawsuits the company has grown and expanded to be come a worldwide company. Even though ADM is not a widely known company it is still very large and it does control some of the normal products that we see in our house.

Value Line says “Archer Daniels Midland is putting together a strong campaign in fiscal 2004. The company followed up and impressive showing in the first quarter, with a 106% year over year earnings advance in the December period.” that is a positive for the company, they seem to be looking stronger over the past couple years. Value Line also says “the corn processing segment is poised for another strong showing in calendar year 2004. The ethanol division, which preformed very well last year should benefit from an expected decline (roughly 5%) in corn prices this year.” This is all positive for ADM as the company is looking good this year. Although the company seems to be doing well the Annual Report from the company says “Net earnings for fiscal 2003 decreased due principally to reduced North American and European oilseed crush volumes and margins, reduced operating results of Agricultural Services and wheat processing operations due to poor crop conditions in North America, and a reduction in the grain from the settlement of vitamin antitrust litigation.” Even though net earnings decreased net sales and operating income increased thirty-six percent from 2002 to 2003. The cost of products sold went form 8.1 billion to 29.0 billion due to recently acquired business.

ADM has many different products that it produces the most important products that it produces is; oilseed, corn, wheat, and Agricultural Servers. ADM is also in a joint venture with