In his quest to revolutionize feed formulations, James R. Cargill paves the way for the future of the company.
The IBM® 650 Magnetic Data Processing Machine was poised to change businesses forever—but the revolutionary computer, first introduced in 1953, was not an immediate must-have for a company like Cargill. Many executives were intrigued by the machine’s capabilities, believing it was a good investment for accounting, but skeptical that it could improve other areas of business.
And yet, in 1957 Cargill took the pioneering step and installed its first electronic digital computer. It was one of the first commercial systems implemented by a US agricultural business. Like other large companies, Cargill saw clear advantages in applying the “electronic brain” for accounting, financial and general operating data.
But one member of the Cargill team was inspired by the IBM 650 for different reasons. At the time, James R. Cargill (known as “Jim”) was working in the company’s feed division. Noticing significant inconsistencies in pricing across the company’s national feed mills, he pushed to use the computer as a device for analyzing (and rationalizing) some of Cargill’s pricing problems.
Feed calculation was a vital element in Cargill’s operations, and a component many felt was too risky to change. But convinced of the computer’s potential, Jim worked tirelessly to explore and promote its potential beyond traditional accounting.
The IBM 650 was finally put to the test when Cargill’s Nutrena feed group asked Jim to conduct an experiment for one of the group’s most challenging products: Chick Starter. Cargill wanted to first determine the feed requirements for a chicken to reach optimal growth and health during its life cycle. Then, based on those findings, calculate an exact feed formulation at the lowest possible cost.
To find the answer, Jim and his colleagues put the machine to work. In 1957, the IBM 650 analyzed more than 4 million possible outcomes and precisely formulated a breakthrough product: Nutrena All-Mash Egg Feed, which helped farmers raise healthier, larger and more productive chickens at a lower cost. It was the first formulation completely calculated by the computer—an industry turning point that gave a pricing advantage to customers, and a new competitive edge to Cargill.
Soon after, Pfizer Corporation premiered a new additive designed to reduce chicken feed costs. To create the lowest-cost recipe featuring the ingredient, Pfizer established a national competition. With the power of their IBM 650, Cargill entered using the computer’s calculations as a starting point. Not only did Cargill win—the team prevailed, taking first, second and third places.
With the Pfizer prize and the success of Nutrena, Jim inspired other divisions to put the IBM 650 to the test, bringing new levels of sophistication and progress to all areas of the company. The grain division soon utilized the computer to maximize grain management, discovering that they could add one cent per bushel to terminal elevator margins for a net gain of at least US $2 per ton.
By leveraging precise data and intelligent analytics, the company was able to generate cost-effective solutions quickly and consistently. Thanks to Jim’s tenacity, Cargill committed to using the new technology across the organization, developing new opportunities for its employees, farmers and customers.