The middleman became the most valuable player in the supply chain because they owned the physical infrastructure—the grain elevators next to the railroad—that nobody else could replicate.
Sam explains Cargill's origin as a grain middleman that built physical grain elevators next to railroads, making them indispensable. Over time they expanded into shipbuilding, meat processing, and a sprawling empire, while staying deliberately quiet to avoid competition. ✦ AI generated
Sam · My First Million · 2026-07-23 · original ↗
starts at this moment · 3:34
You always hear this idea of like you don't want to be the middleman. Oh, you can always cut out the middleman. And in this case, the middleman became worth more than everybody else. ... In this case it's because the middleman was physically in the middle. They literally built the grain elevators that would store the stuff right next to the railroad. And so you needed to transport it. You needed to get to the railroad. Who else had it? Like nobody else was going to build that. ... They have this rule called the 80/20 rule. So 80% of all profits will get reinvested back in the business. 20 goes out as dividends to the family and they hire for the last, you know, 20 years or so that they've had professional CEOs running the company. ... A journalist once described the family as secretive, inbred, and suspicious.
verbatim transcript · starts at 3:34
3:15he does. >> Does he store or he just calls one side, hey, I got 75 bushels of >> this? Well, it's fresh produce, so the storage is like a day. But yes, there's a Yeah, there is a place where they sit for like 24 hours before a truck comes and gets it. Yeah. But yes, >> and what's interesting about me this for me from a from a business perspective,
3:34you always hear this idea of like you don't want to be the middleman. Oh, you can always cut out the middleman. And and in this case, the middleman became worth more than everybody else. It actually if you look at many businesses you know um there there's many businesses where the middleman becomes a quite a valuable business. And so there's an interesting question of why. In this case it's because the middleman
3:53was a physical was physically in the middle. They literally built the grain elevators that would store the [ __ ] right next to the railroad. And so you needed to transport it. You needed to get to the railroad. Who else had it? Like nobody else was going to build that. So anyways they start doing that. They they then go you know further and further and further. So, you know, at
4:09one point they're like, "Hey, these shipping barges are so inefficient where we're shipping the grain uh when it's not traveling by rail. So, we'll build our own shipyard, our own ships." They end up producing ships for the US Navy. They bought the biggest like meat uh like poultry company, and now they control like a huge percentage of the meat industry, of the grain industry. And so, they've built this like empire,
4:30and nobody really knows them. And the and basically it's just a family that's that owns this thing. 88% owned by the family. There's like 20 or something billionaires in the family now. They have this rule called the 8020 rule. So 80% of all profits will get reinvested back in the business. 20 goes out as dividends to the family and they hire for the last, you know, 20 years or so
4:49that they've had professional CEOs running the company. It's not like family run anymore. >> And the profit per year according to Wikipedia, I think it's like five or six billion dollars. >> Yeah. That was like during like the kind of peak COVID stuff when uh you know when Ukraine was getting attacked and and you know Ukraine produces a lot of grain and so their prices spiked. I
5:07think it's like three billion in a in a normal year right now. >> Okay. So, okay. So, so you close to a billion dollars a year of profit that goes just straight to the family and this been doing that for like whatever 50 plus years. And so I want to tell you a little bit of something interesting. So first I was like I was like what do
5:23they actually do? Because now, you know, when these corporations get so big, so large, they just have their hand in everything. And you would see these comments like, you know, they just everything on your plate. Anything you eat in a in a package, cargo had a hand in it. They're controlling the food supply. The people think of like Monsanto style like evil companies. Um, and so just just I want to read you this