Bowing to criticism, Cargill Inc., the country's biggest grain trader, backed away yesterday from plans to bring 25,000 tons of Argentine wheat into the United States, where storage bins are crammed with surpluses.
The privately held company said in a statement from Minneapolis that it had decided to send the hard red winter wheat elsewhere but repeated its contention that its original plan made economic sense.
Cargill retreated from its import decision after politicians and farm groups charged the company with undermining U.S. farmers and trying to strengthen the case for lower U.S. price supports in the new federal farm bill. Argentine wheat can be brought to U.S. ports for $6 to $10 less per ton than the price of comparable wheat bought here.
Chairman Whitney MacMillan acknowledged that the "strong reaction" played a role in Cargill's reversal, but he said that it "unfairly characterized the job that Cargill . . . has done for the American farmer." He said the reaction also obscured the fact that Cargill can buy grain elsewhere at less cost and still bring it to the United States at a profit.
Although the company rejected suggestions that it was threatening to bring in the cheaper wheat as a way of drumming up support for "free market" farm legislation that Cargill and the Reagan administration support, MacMillan said the controversy was "diverting public attention from the policy dilemma."
Cargill may have made its point that wheat can be purchased abroad and brought here for less money than U.S. grain, but it also brought a harvest of angry reaction.
Sen. Mark Andrews (R-N.D.), whose home state produces the same hard red winter wheat that would have come from Argentina, said that farmers calling his office were "up in arms" and that he was angry, too.
"It is a cheap propaganda shot by Cargill," Andrews said. "I'm not surprised. Cargill will take a run at us during the farm-bill debate over the wheat price-support levels. We'll be seeing this kind of propaganda for the next several months."
Recession here and abroad, sluggish world economic recovery and bountiful harvests here have conspired to produce enormous surpluses of U.S. wheat. The country had a 1.4 billion-bushel surplus last June and is expected to have a 1.1 billion-bushel surplus next June.
Cargill and others argue that federal price-support loan rates, which put a floor under the price of American grains, are so high that U.S. farm products are less competitive on the world market. The administration says it wants Congress to cut support levels to discourage overproduction and help sell more grain abroad.
"No one can produce wheat for less than our U.S. loan price," Andrews said. "Our farmers can compete with anyone, but they can't compete with governments. If Argentina is shipping this, they are subsidizing the export and it is a Cargill propaganda move to force more of our farmers out of business."
The National Association of Wheat Growers, which represents many of the country's major wheat producers, said that it was "disappointed" at reports of the pending import deal, but that it would wait to see if the grain arrives here before commenting further.
Rep. Byron L. Dorgan (D-N.D.) joined Andrews in the criticism. "They could be using this to apply pressure. It is not out of keeping with the way Cargill operates," he said. "There is no way anyone would know if they would have made a profit on this because they are one of the more secretive American corporations. I frankly can't believe they could make a profit on this deal and I'm convinced that it can only be termed as 'dumped' wheat."
Texas Agriculture Commissioner Jim Hightower, whose state is a major wheat producer, described the on-again, off-again deal as "a not-too-subtle statement . . . that would have a price-busting impact.
"It is an insult to the farmers of America who have been the bread and butter of Cargill for years," he added. "We'll come right back at them. The American farmer won't sit around and buy their Nutrena feeds, their seeds, their Burros Mills pancake flour. And he might even turn off 'A Prairie Home Companion' [a Cargill-sponsored radio show] on Saturday nights and go out organizing other farmers."