Cargill CEO: Ripping up NAFTA would cost us $11 billion
Cargill chairman and CEO Dave MacLennan has not been shy about his support of global trade, and his confusion over whether President Trump's rhetoric on the subject is a negotiating tactic or a legitimate threat. Axios caught up with MacLennan on the sidelines of the Bloomberg Global Business Forum in New York. Some takeaways:
Top-line loss: Cargill believes that the dissolution of NAFTA – sans replacement – would result in a 10% haircut to company revenue, which totaled around $110 billion in the most recent fiscal year. For context, Forbes lists Cargill as America's largest privately-held company.
Communication: MacLennan had his first-ever meeting with Commerce Sec. Ross yesterday, and only has had a phoner with Ag Sec. Perdue. He has still not met or spoken with the U.S. Trade Rep. Lighthizer.
New rival: He keeps a close eye on Amazon. Not only because of its move into the food space – now competing with major Cargill clients like Costco and Walmart – but also because he could see it moving into areas like freight (Cargill is the world's largest charterer of dry freight).
Private vs. public: MacLennan says that while Cargill is a major adopter of automation technologies, he believes that the company can be slightly less aggressive because it isn't publicly-traded. "Sometimes I ask at a location why we have people doing a job that maybe seems more efficient and safer to use a machine, and I hear about the importance of creating jobs in that local community, or about the cultural importance of keeping certain people. I'm not sure those arguments would work as well if we had to meet quarterly analyst estimates."
M&A: He declined to comment on reports that Cargill has interest in buying poultry producer Pilgrim's Pride, but did say that the decision is unlikely to be impacted by that company's recent $1.3 billion purchase of Britain's Moy Park. "Both companies are owned by JBS, so I view it as less of a deal and more of an accounting change."