Cargill ‘scaling back’ in Russia

The parade of western companies constraining business in Russia has — until now — had a notable absence: Cargill, one of the country’s largest foreign agribusiness investors.

With public pressure mounting, Minnesota-based Cargill said Friday it will scale back its business activities and has stopped investment in Russia. But the company declined to specify where and how.

Cargill has a facility in Cedar Rapids.

“We will continue to operate our essential food and feed facilities in Russia,” Cargill said in a statement.

“This region plays a significant role in our global food system and is a critical source for key ingredients in basic staples like bread, infant formula and cereal.”

Cargill moved into Russia and Ukraine soon after the Soviet Union’s demise, investing more than $1 billion in the surging grain and food trades of both countries.

The agriculture behemoth is one of the largest non-Russian exporters of Russian wheat and owns mills about 200 miles south of Moscow.

In Ukraine, Cargill’s interests range from majority ownership of a large grain port to loans made directly to its government.

“They have a most difficult role to play right now,” said Paul Vaaler, a professor in the University of Minnesota’s business and law schools. “They have substantial sunk investments in both countries.”

The company is faced with fundamental questions, Vaaler continued: “How can it continue to demonstrate sympathy to the Ukrainian government — and how can it preserve its assets?”

On Friday, Cargill said it is increasing support for Ukrainian humanitarian efforts, directing all profits derived there into not-for-profit relief organizations.

Cargill is the largest privately held U.S. company and one of the nation’s most global corporations, with operations in 70 countries.

Global wheat and corn prices have surged in recent weeks in anticipation of shortages caused by the war.