Iowa State University agricultural economist Robert Wisner's own informal look at the potential effects show that Cargill's purchase of its number two rival might give it control of somewhere between half and two-thirds of US corn and soybean exports. Such concentration might have negative effects on producer prices. A positive effect might be Cargill's increased bargaining position with foreign buyers, Wisner says. In the past, China, for example, has played Cargill and Continental against each other and reneged on purchases if a better deal came along. That will be the new location of delivery sites for Chicago Board of Trade soybean contracts starting in the year 2000.
Market share is never a given.
The grain business remains very competitive at both the local and export levels, she says. Locally, grain companies compete with processors and livestock feeders. The grain trade has changed a lot since the days of big sales to government buying agencies, with companies selling to more buyers. With some exceptions, Continental Grain was the only firm exporting HOC for Optimum, which is a joint venture of DuPont and Pioneer Hi-Bred International. Optimum officials see that as an opportunity.