Articles by Tom Philpott

Not to get all grassy knoll, but …

From the I-don't-want-to-get-all-grassy-knoll-on-y'all-I'm-just-sayin' department, I offer two items buried in the business page of today's New York Times:

* On page C3, we learn that Ken Lay isn't the only businessman involved in the Enron mess who came to an untimely end. Here is the NYT:

A British banker who provided evidence to the F.B.I. and the United States Department of Justice about Enron-related transactions has been found dead in an East London park, days ahead of the politically charged extradition of his former colleagues to Houston to stand trial.

Scotland Yard, the Times goes on, "said the death was being treated as 'unexplained' and that officers from its homicide and serious crime units were investigating."

An innovative Alabama CSA shows the way forward.

When Wal-Mart announced plans to become the world's biggest purveyor of organically grown food last week, the polite applause from the enviro gallery grated on my ears. (Here's a spirited recent debate on Gristmill.) Even the New York Times editorial page could see through this move. While some greens cooed at at Wal-Mart's magnamity, the Grey Lady unleashed an appropriately cynical analysis:

There is no chance that Wal-Mart will be buying from small, local organic farmers. Instead, its market influence will speed up the rate at which organic farming comes to resemble conventional farming in scale, mechanization, processing and transportation. For many people, this is the very antithesis of what organic should be.... For "Wal-Mart" and "organic" to make sense in the same sentence, the company will have to commit itself to protecting the Agriculture Department standard that gives "organic" meaning.

I have no doubt that Wal-Mart's greenie admirers will hold the company's feet to the fire on that one. But the USDA's organic standards are already being drained of meaning. Rather than chide Goliath to behave nicely, enviros should consider helping David get his shit together. Check out what they're getting up to over in Birmingham, Ala.

A speculation about why ADM’s HFCS business is booming.

In the first quarter of 2006, as I reported yesterday, Archer Daniels Midland somehow managed to boost the price of high-fructose corn syrup (HFCS) despite mounting concern over the sweetener's health effects.

The company booked a cool $113 million profit from HFCS over the quarter, more than three times more than it netted in the same period a year before ($33 million). This, despite a slowing domestic market for sweet soft drinks, as consumers increasingly switch to juice and bottled water. The company's official explanation -- "increased sweetener and starch selling prices" -- doesn't explain how it managed to make price hikes stick.

I think I've figured it out. And the explanation has everything to do with Brazil, sugarcane, and ethanol.

Archer-Daniels Midland’s stock soars on ethanol, biodiesel hype

Earlier this year, after Archer Daniels Midland reported surging profit for the fourth quarter of 2005 -- largely driven by its ethanol unit -- I dubbed the company the Exxon of Corn.

As if to prove my thesis, the grain-processing giant tapped an oil exec as its new CEO last week. And, like any respectable would-be oil company, it also reported another quarter of robust profit growth. The ascension to CEO of Patricia Woertz, most recently executive vice president at Chevron, marks the end of a four-decade run at ADM's top by the Andreas family. That venerable clan, whose chicanery runs from a key role in the Watergate scandal to a price-fixing scheme in the 1990s, built ADM into one of the U.S.'s most politically connected corporations. Congressional beneficiaries of ADM's campaign generosity likely need not fear; G. Allen Andreas, who has served as CEO since 1997 (when his uncle and predecessor was convicted of fixing the price of lysine, a corn product used in animal feed), will stay on as chairman of the board of directors.

In a country run by oil execs, why shouldn't the largest food-processing firm also be run by oil execs?

The move eloquently signals ADM's intention to continue its rush into the auto-fuel market. The company has made billions over the years extracting the Midwest's soil fertility and transforming it into crappy food products like high-fructose corn syrup, buoyed by government commodity policy and the sugar quota. Now it intends to do the same in service of the internal-combustion engine.