1. Agricultural Commodities Traders
– Main commodities make up the categories of cereal grains, oilseeds, meat, dairy, other soft commodities, and miscellaneous agricultural commodities
– Major industry Participants (ABCD): Archer Daniels Midland, Bunge, Cargill, Louis Dreyfus
– Geographic scope of the market: The major participants play trading roles across the globe and are heavily involved in exports and imports on an international level, the trade of specific commodities varies by region with the ability of certain regions to produce different commodities with more ease
2. Puzzle : How are the ABCD firms able to continue to maintain so much market power and control over the global food system with globalization and the unpredictability of supply and demand shocks?
– Broader context of the puzzle applies to industries that have a high market concentration in which the top firms have high market power and hold large barriers to entry into the industry. Industries that apply to this context are wireless telecommunications providers with Verizon Wireless, AT&T, Sprint, and T-Mobile making up a very large market share and another industry that this applies to is the search engine industry including major firms such as Google, Yahoo, and Microsoft.
3. Structure of the Paper
Section 1: Analysis of the supply side of the market.
– Roles of agricultural commodities producers
– Roles of major traders (ABCD) of industry
– Vertical/horizontal integration
– Bulk trading
– Market power/barriers to entry
– Price setting behavior
– Supply shocks
Section 2: Analysis of the demand side of the market.
– Market scope
– Evolution of demand
– International demand
– Asymmetric information
– Consumer demand preferences
– Demand shocks
– Volatility of prices
Section 3: Analysis of global impacts.
– Economic impacts
– Political impacts
– Social impacts
– Financialization of commodities
– Effects on smaller producers
Section 4: Applications to other industries
– Wireless telecommunications providers
– Search engines
– General market power applications
4. Quantitative Data:
● ADM Annual Reports (2006-2019)
● Bunge Annual Reports (2009-2019)
● Cagrill’s Revenue and Profit Worldwide (2010-2020)
● Louis Dreyfus Company Reports and Publications (2012-2019)
Books/Chapters in Books;
McMahon, P. Feeding frenzy: land grabs, price spikes and the world food crisis; Greystone Books: Vancouver/Berkeley, 2014.
Bohl, M.T., F. Javed, and P.M. Stephan, (2013): “Do Commodity Index Traders Destabilize Agricultural Futures Prices?,” Applied Economics Quarterly, 59(2), 125-148.
Camp K.M., (2019): “The relationship between crude oil prices and export prices of major agricultural commodities,” Beyond the Numbers: Global Economy, 8(7).
Gupta, C.P., S. Sehgal, and S. Wadhwa. (2018): “Agricultural Commodity Trading: Is It Destabilizing Spot Markets?,” Vikalpa, 43(1), 47-57.
Paini, D.R., A.W. Sheppard, D.C. Cook, P.J. De Barro, S.P. Worner, and M.B. Thomas. (2016): “Global threat to agriculture from invasive species,” PNAS, 113(27), 7575-7579.
Stokeld, E., S.A. Croft, and J.M.H. Green. (2020): “Climate change, crops and commodity traders: subnational trade analysis highlights differentiated risk exposure,” Climatic Change, 162, 175–192.
Articles From The Business Press;
Lioudis, N.K., (2020): “Commodities Trading: An Overview,” Investopedia, https://www.investopedia.com/investing/commodities-trading-overview/ , Accessed 11/04/2020.
Articles From General Press;
Daniels, J., (2017): “Agriculture commodity traders see a good 2017, despite possible demand risks,” CNBC, https://www.cnbc.com/2017/01/03/agriculture-commodity-traders-see-a-good-2017-despite-possible-demand-risks.html , Accessed 11/04/2020.
Layne, D., (2012): “Top 10 Agricultural Commodity ETFs,” EFT.com, EFT.comhttps://www.etf.com/etf-daily-news/10651-top-10-agricultural-commodity-etfs.html/，Accessed 11/4/2020.
Antitrust Investigations and Cases;
Antitrust Enforcement and Agriculture. Justice News 2002.
Antitrust Enforcement and Agriculture. Justice News 2007.
Business School Cases;
Bell, David E. “Louis Dreyfus Commodities.” Harvard Business School Case 515-065, December 2014.
Industry and Trade Organizations;
Murphy, S.; Burch, D.; Clapp, J. (2012): “Cereal Secrets: The world’s largest grain traders and global agriculture” Oxfam Research Reports https://www-cdn.oxfam.org/s3fs-public/file_attachments/rr-cereal-secrets-grain-traders-agriculture-30082012-en_4.pdf
Firm Financial Statements;
Neppl, John W. “Annual Reports.” Bunge, 2020, investors.bunge.com/investors/financial-information/annual-reports.
Shahbandeh, M. “Cargill’s Revenue and Profit 2020.” Statista, 21 Sept. 2020, www.statista.com/statistics/274778/revenue-and-profit-of-cargill-agricultural-company/.
Treuer, Patrick. “Reports and Publications at LDC || Louis Dreyfus Company.” Global, 2 Oct. 2020, www.ldc.com/news-and-insights/reports-and-publications/.
Young, Ray G. “Annual Reports.” ADM, 2020, investors.adm.com/financials/annual-reports/default.aspx.
Cargill is committed to helping the world thrive https://www.cargill.com/ (accessed Nov 16 2020).
Leading Merchant and Food Processor || Louis Dreyfus Company https://www.ldc.com/ (accessed Nov 16, 2020).
One Bunge Everywhere https://www.bunge.com/ (accessed Nov 16, 2020).
Unlocking Nature. Enriching Life. https://www.adm.com/ (accessed Nov 16, 2020).
Salerno, T., (2017): Cargill’s corporate growth in times of crises: how agro-commodity traders are increasing profits in the midst of volatility,” Agric Hum Values, 34, 211-222.