Much to learn from flour output

by Morton Sosland
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For grain-based foods, an industry with as broad and as deep a reach as any other food sector, the existence of a single statistic measuring how the business is doing is unique. That number is flour production by U.S. mills, which if examined closely is really not just a report on what flour mills operating in the United States produce, but of how sectors like baking, pasta manufacturing, numerous consumer products and untold companies are doing. Few, if any, industries in any field have a number with the portent of flour output.

All of this explains why the data recently released for the 2014 calendar year have been treated as a “mixed bag.” The raw number, estimated by this magazine based on statistics provided by the North American Millers’ Association and its data compiler, Veris Consulting, Inc., is 425,937,000 hundredweights, up a tiny 0.3 per cent from the previous year, but still a new record. The small output gain indicates that production lagged population, which more than doubled that percentage rise. Yet, setting an output record in a year when eating wheat foods was subject to more dramatic attacks from dietary buffoons than at any time in recent memory could only be interpreted as affirming that consumers did not turn away from the industry’s products. Promoted efforts like the “Wheat Belly” book and similar assaults did not seriously impact foods the industry rightly considers as contributing to consumer health and well-being.

While regarding that production record as a huge positive in light of this environment, it is still disappointing to study the output trends of recent years. The 2004 peak was up only 1.1 per cent from the total of 421,270,000 in 2000, at the start of this 21st century. If that’s not disappointing enough, consider how this showing appears when compared to the impressive gains posted in the last two or three decades of the 20th century. There is no question that flour output/consumption has sharply veered from the previous upward course. But it is also important to keep in mind that it has enjoyed steadiness at a time when other food sectors have done much less well.

Production data reaching beyond the raw single output number help to explain where shortfalls may be occurring. The data show a pronounced decrease in output of durum semolina and flour, down nearly a third in the first decade and a half of this century. It is this fall that accounts for much of the disappointment with total flour output.

At the same time, data are not available on how many individual parts of grain-based foods are performing. This is an era when the industry’s use of flour is more diverse than previously. From a time when baking and family flour accounted for 90 per cent or more of total flour usage to the present-day is a massive transformation. Hardly anything symbolizes this more graphically than the way it has become commonplace to hear executives talk about their companies without even mentioning the bread business that once was baking’s core.

Focusing on the positive aspects of production data as reflecting the well-being of grain-based foods, it is still essential not to overlook the operating rate of U.S. mills. The rate held to a relatively high level, 88.1 per cent of daily capacity as the year’s average. Yes, that is down from the prior year’s 89.4 per cent, but an average near 90 per cent is considered right for milling. Daily capacity was added in the past year as millers invested to assure efficient operations, which benefit the total industry as well as flour users. It is only when capacity trends sharply ahead of output that serious problems may occur that have in the past done great harm. Grain-based foods is thus doubly blessed to have a number that measures how its business is doing and how efficiently it is operating.

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