Nourishing the World: The Future of Food & Agriculture

February 03, 2017

Nourishing the World: The Future of Food & Agriculture

By Dave MacLennan 

University of St. Thomas First Friday Speaker Series 

February 3, 2017

Good afternoon. It’s great to be here at St. Thomas.

Every day hundreds of alumni represent our company and this university in the Twin Cities and around the world.

I’d like to thank President Julie Sullivan for her invitation to speak and her commitment to advancing the “common good.”

Today, I’d like to talk about nourishing the world, and the future of food and agriculture. What I’m going to do is:

  • Provide a snapshot of Cargill’s business,
  • Talk about the current landscape, and
  • Highlight some important priorities that will help ensure a more promising future.

I want to talk about innovation, trade and immigration. These issues are in the headlines and have immediate impact on our business and community.

At Cargill, our purpose is to nourish the world in a safe, responsible and sustainable way. It’s not just what we do – it’s how we do it. We play an important role in keeping the global food system strong – and that’s something we take very seriously.

For those of you who are not familiar with Cargill, let me provide a quick
snapshot:

  • We have more than 150,000 people working across 70 countries.
  • For more than 150 years, we have been working with small- and large-scale farmers to move food around the world.
  • We have more than $100 billion in sales revenue annually, and earnings on those sales of about $2 billion.

While Cargill is a big company, we’re not a household name. That’s partly because we are family owned and privately held. It’s also because we are largely a business-to-business company. People often think we are a seed company or a food manufacturer. We work in those areas, but our main focus is sourcing and moving food around the world.

What really differentiates Cargill from many other food and ag companies is the reach of our global supply chains. At a high-level, here’s what we do:

  • We take food and agricultural commodities from farmers and producers around the world.
  • We store it and sometimes add value by turning it into other ingredients or creating cuts of meat with flavors and seasoning.
  • Then we move it around the world and deliver it to our customers who sell it in the restaurants and grocery stores you visit every day.

Given this reach, it’s safe to assume that you eat something that Cargill produced each and every day.

So, while you may not be familiar with Cargill, you probably know our biggest customers.

  • We supply McDonald’s with all of its cage-free eggs in the U.S.
  • In a number of countries, we supply Dannon and Abbott with high quality ingredients for baby formula.
  • And we produce bio-based products that replace petroleum in everything from asphalt to cosmetics for L'Oréal.

Now, let me talk about the current landscape in agriculture, food and nutrition. Today, the story of food is very personal. Much like identity politics, food has become the way we explain ourselves and build connections with others.

People want to know more about their food.

  • Who made it?
  • Are they an ethical company?
  • Do they treat people, animals and the planet well?

But they also want to feel connected to the food they eat and trust how it was made. Consumers don’t just trust automatically trust recognized brands anymore. They want to understand what is behind the brand.

The implications for Cargill are clear:

  • We will deliver our customers a wide range of products and solutions – we will offer choices like GMO and non-GMO, antibiotic-free, and cage-free.
  • And we will focus even greater transparency across our global supply chains to help tell the story of the food you eat. That is our legacy and our future.

So while the story of food today is personal, it’s also global. Nourishing the world in a safe, responsible and sustainable way is one of the biggest challenges of our generation. It will require a quick pivot from an era when our global resources seemed limitless to one where there are clear limits.

According to World Wildlife Fund, today’s population uses the natural resources of about 1.6 Earths. This means that we’re draining our resources far faster than we’re replenishing them. As the world becomes more efficient, we will have to figure out how to accommodate more people at the table.

By 2050, today’s Tommy seniors will be at the same point in their careers that I am now. And in 2050 there will likely be an additional two billion people on the planet. So we need to nourish this generation while protecting the ability of future generations to do the same.

Let me give you an example of how Cargill is working to nourish people and protect the planet. In the early 2000s, advocacy groups cautioned that soy was contributing to deforestation in the Amazon Basin. Global non-profits and other stakeholders began calling on companies like Cargill to do more to reduce and eliminate deforestation by stopping purchases from farmers who were illegally clearing land.

Because we had a port terminal near the Amazon River, we found ourselves in the midst of a very public battle. This was a turning point for Cargill – a moment of reckoning. We had to ask ourselves – by our presence there, were we contributing to deforestation in the Amazon?

And if we wanted to help turn things around, who would we need to work with to make a real difference? By joining with unlikely partners, including critics, we saw our impact with greater clarity and found a path forward.

Cargill had existing partnerships in the region, but we strengthened the collaboration. We worked with The Nature Conservancy, Greenpeace, customers and even competitors to impose a voluntary ban on sourcing soy from newly deforested land.

During the first two-year period of this Soy Moratorium, we worked with the Brazilian government to strengthen regulation and created a new satellite monitoring system. This work was so successful that the Moratorium was renewed and the monitoring system was taken over by the Brazilian government. The Moratorium contributed to an 80 percent decline in deforestation, while farmers increased their productivity. We just celebrated the 10-year anniversary of the Moratorium and saw it extended indefinitely. This is what is possible when we work together.

Some of you might be thinking: “That’s great, but this doesn’t exactly feel like a time of increasing collaboration.”

You’re right. Geopolitics are shifting and we’re standing at a crossroads on important issues. Many of today’s headlines have immediate impacts on Cargill’s business, our community and our ability to build a resilient food system.

Let me focus on a few priorities that are critical to ensure a more promising future. I want to talk about:

  • Advancing innovation,
  • Trade, and
  • Immigration.

To ensure a more promising future, we have to continue to invest in innovation. Constrained resources mean we’ll need to produce more food, more efficiently in the years ahead. At Cargill, we know the demand for meat will continue to grow, but we are also exploring alternative sources of protein.

That’s why last year Cargill launched a new pea protein. The product offers a number of advantages:

  • It can be used in a wide variety of foods, from bakery and snacks to beverages and meats,
  • It is sustainably grown in North America as a rotation crop,
  • It is not one of the “Big 8” allergens, and
  • It is vegan, organic, gluten-free and inherently non-GMO.

These and other kinds of homegrown innovation will continue to keep our state and our country competitive.

Let’s talk about trade as another way we’ll stay competitive – Cargill supports inclusive trade policy. Globally, we are seeing concerning trends with increased protectionism around the world.

Compared to 10 years ago, non-tariff barriers to trade have increased 2.5 times. Complaints raised by World Trade Organization members have risen about the same amount in that timeframe.

When it comes to U.S. trade policy, let me be clear, Cargill is eager to work productively with Congress and the Trump administration. As we engage, we will make a strong case that trade is good for America.

  • 96 percent of the world’s consumers live outside the U.S. We cannot afford to wall ourselves off from those markets.
  • Inclusive trade agreements give American farmers and manufacturers better access to sell into markets where they would otherwise face high barriers.
    • For example, since NAFTA was implemented, U.S. agricultural exports to Mexico and Canada have quadrupled. (~$9 billion in 1993 to ~$39 billion in 2015)
  • And U.S. leadership on trade agreements has allowed us to develop strong rules for intellectual property, labor protection and the environment.

The benefits of trade go both ways and can have huge impacts on bottom line costs to consumers.

Inclusive trade is also good for the rest of the world.

  • Trade has lifted tens of millions of people out of poverty in the last few decades.
  • We’ve seen what happens when protectionism disrupts the free flow of food. It can provoke famine, cause conflict and even war.

We know we need to drive inclusive economic growth. We need to be mindful of the impacts of trade on jobs and local communities, but we can’t take an “all or nothing” approach. If the U.S. steps back from our leadership role in the global economy, other countries will fill the gap.

As we work to stay competitive and build a more promising future, we need to focus on immigration.

This chart from the Wharton School policy simulator shows that an increase in legal immigration doesn’t take jobs away from people. In fact, it creates more jobs by strengthening the overall economy. As workers across the U.S. get older, keeping an open policy on legal immigration has never been more important than it is today. This is true of all types of workers – from those with blue collars to those with PhDs.

As we look to strengthen our immigration system, there are a few things we think will help ensure a more promising future.

We need to turn the tide on the current climate. It is causing many of our smartest people from outside the U.S. to question whether they want to stay here.

  • Are they really welcome in our communities?
  • Is this still a positive environment to live and raise their kids?

Do we want to drive away these talented people and their innovative thinking? Doing so will put our country at a disadvantage. The world’s best and brightest may start looking at other countries as the land of opportunity… and that would be profoundly un-American. It would weaken not only our food system, but the U.S. economy.

Cargill has employees in fields like trading and nutrition science. As a global company, the ability to share insights by moving people around the world is absolutely critical. Today, workers from other countries come to Minnesota to grow and share their expertise. They contribute positively to the local economy and community.

The H-1B visa program for highly skilled workers makes this possible. It needs to be improved to help companies attract and retain talent.

Also, a legal immigration system that works is the best way to address illegal immigration. This includes a system that helps employers confirm the identity and work eligibility of applicants.

Cargill only employs people in the U.S. who are legally allowed to work here. At the same time, we also know that agriculture and food manufacturing needs improved visa programs to address labor shortages.

This is a complex issue. But it’s one where we’re going to have to work together to find the right solution.

I’m a glass-half-full person. So, let me conclude by sharing some reasons why I think we should be optimistic about the future of food and agriculture. First, the private sector is stepping up. Just a few weeks ago, I was at the World Economic Forum in Davos. In a time of great uncertainty, I saw business, non-profit and government leaders working together to address challenges like deforestation and global nutrition. Cargill and other companies know we have a responsibility to our customers and the wider world.

I am also optimistic because I know who we are and how far we’ve come. Companies like General Mills and 3M were born right here on the banks of the Mississippi. We are people of ingenuity. Our hard work has shaped agriculture, food and nutrition for more than 150 years. Working together, we can continue that ingenuity. We can navigate a changing landscape, advance innovation and create policies that will define the next 150 years.