Merchants of Grain

Morgan, a Washington Post journalist, wrote in 1979 the first substantial account of the private companies that dominated the international grain trade, principally Cargill, Continental Grain, Louis Dreyfus, Bunge and Andre. These firms were family-owned, disclosed almost nothing, and handled a large share of the world's traded grain.

The business material covers how the trade works: the firms buy from producers, transport and store, blend grades to meet contract specifications, and sell to importing countries, with margins coming from information about supply and demand conditions ahead of the market, from logistical capability, and from arbitrage between locations and delivery dates.

The central episode is the 1972 Soviet grain purchase, in which the Soviet Union, facing a harvest failure, bought enormous quantities of American wheat through several trading houses simultaneously and at subsidised prices, before the American government understood the scale of what was happening. Prices rose sharply afterwards and the episode became known as the great grain robbery. Morgan documents how the information asymmetry worked and how the trading houses profited.

He also covers the relationship between these private firms and American agricultural and foreign policy, including the use of food aid as an instrument. The reference has verified the book's subject and its principal episode rather than every detail. The book is from 1979 and the industry has changed, with consolidation, the growth of Asian and Chinese state buyers, and greater transparency in some markets. It remains the foundational account of an industry that handles essential commodities with almost no public visibility.