An ingredient market review of 2008 published in the Jan. 13 issue of Milling & Baking News shows the journal’s White Pan Ingredient Index declined 28% to a figure of 171.5 in the year just ended. The decline from 244 in December 2007 was the widest since the index, a weighted basket of the ingredients in a basic loaf of white bread, was created in 1991 (May 1991 = 100).

While the magnitude of the decline is worth noting, the statistic does a poor job of fully capturing the difficulties created by ingredient markets swings in the year that just ended. Prices were sharply down for the year, but the aggregate decline misses the index’s January-February panic-inducing surge to a record high.

The index peaked at 339 on Feb. 29, meaning that the December close was down 48% from the high. Further, the steep drop from the breathtaking highs does not equate to cheap prices for ingredients. Even at the December close of 171, the index was 42% higher than the average of the annual close since 1991.

Finally, as large as the 27% decline may be, it does not begin to capture the disruptive week-to-week and month-to-month volatility that wracked ingredient markets in 2008. The cumulative monthly changes in the index (adding the absolute value of the 12 monthly changes) totaled a mind boggling 114% in 2008, up from 67% in 2007 (when the index was up 70% for the year) and compared with an average in 2003-06 of just 38%. It’s fair to describe ingredient buyer challenges in 2008 as unprecedented and certainly to hope they will go unrepeated in the present year.