Minnesota history: Cargill has humble roots — in Iowa and Wisconsin

In the midst of its 150th year, this is as good a time as any to clear up a couple of popular historic misconceptions about Wayzata-based food giant Cargill — the nation's largest private firm, which rakes in $135 billion in revenue and employs 143,000 people in 68 countries.

First off, Iowa and Wisconsin can justifiably challenge Minnesota's Cargill bragging rights — at least as far as the corporate creation story goes. Then there's the notion that Cargill has been family run all these years.

It's true that for 115 of its 150 years (or 77 percent of the time) the company has had family members at its helm — be they Cargills or MacMillans, who merged with the clan through a 1895 wedding in La Crosse, Wis., with the founder's daughter.

But the first nonfamily member in charge, the white-gloved Erwin Kelm (at Cargill's helm from 1960 to 1976), arguably pumped the company into the mega-agribusiness firm it is today as much as any Cargill or MacMillan. (More on Kelm and his gloves later.)

Back to the humble beginnings: The Cargill company was born in Iowa, not Minnesota, about 30 miles south of the state line. Just after the Civil War, 20-year-old William Wallace Cargill invested in a grain warehouse in 1865 at the end of a new railroad line in Conover, Iowa — then a boomtown with 30 saloons but soon a ghost town nicknamed "Goneover" when the railroad pulled out.

Son of a Scottish sea captain, Will Cargill was a New Yorker originally from Long Island who grew up in Janesville, Wis. Within a couple of years of that first grain bin buy, kid brothers Sam and Sylvester Cargill joined the business — constructing a lumberyard and grain flat house about 30 miles northwest of Conover in Lime Springs, Iowa.

The Cargill boys based their operations in Albert Lea, Minn., in 1870. But within five years, not only would Will move the headquarters to La Crosse, he'd also build his ornate mansion in 1881 in that town on the Wisconsin side of the Mississippi River.

"He was a systems integrator long before there was such a term," said Pete Stoddart, a longtime company spokesman.

The blending of the Cargill and MacMillan families has brought forth more than 100 dividend-collecting descendants. That modern family tree was graphed when Edna Clara Cargill, Will's daughter, married her La Crosse neighbor, John MacMillan, 120 years ago. John would take over control of the company when his father-in-law died in 1909.

By 1912, the Cargill Elevator Co. was based in Minneapolis. Will's great-grandson, Whitney MacMillan, would be the last family member to run the agribusiness firm, serving as CEO from 1977 to 1995 before retiring to a 40,000-acre Montana ranch where Lewis and Clark once bivouacked and some of the first North American dinosaur fossils were found.

While the family's fingerprints are all over Cargill's history, the son of an unrelated tailor gets easily overshadowed. Erwin Kelm was born Nov. 4, 1911, in Grand Rapids, Minn., and earned his marketing degree from the University of Minnesota in 1933 in the teeth of the Depression.

Kelm spent his first 13 years at Cargill as a barley and grain trader at the Minneapolis Grain Exchange. Suffering from severe allergies that would affect his skin, Kelm took to wearing white gloves while sampling the grains.

Rising through the ranks, Kelm became vice president of the grain division in 1946, operations director in '54, a board member in '55, executive vice president in '57, president in '60 and chairman in '68.

Proclaiming "risk management is our strength," Kelm thrust Cargill into global grain trading through its Swiss subsidiary. He was an early player in expanding American agricultural trade with the Soviet Union. And during his 16-year reign, Cargill became active in soybean processing worldwide and had a hand in everything from steel production to financial services.

When Kelm retired in 1976, Cargill was operating in 35 countries — twice as many as when he took over. And employment rose fivefold to 23,000.

For most its 150 years, Cargill has enjoyed a low profile, considering its high standing in the planet's food distribution networks. There have been rocky times, too, though. In 1938, a dispute erupted over claims that Cargill was trying to corner the corn trade. The Chicago Board of Trade suspended the firm and the story was splashed on the cover of Business Week magazine.

John MacMillan Jr., son of Edna and John, swore the company would never return to the Chicago grain trading hub even though the suspension was lifted within a few years. Only after John Jr.'s sudden death in 1960, when Kelm stepped in, did the company return to the floor of the Chicago Board of Trade.