Milling & Baking News - May 22, 2007 - 1

THE NEWS WEEKLY OF GRAIN-BASED FOODS
MAY 22, 2007

bakingbusiness.com / foodbusinessnews.net

FEATURE

Baking
Hall
of

Fame

Special coverage begins on Page 19

LATE NEWS

Bakers support
summit elements
WASHINGTON - Nearly one
month after wheat industry groups
gathered in Kansas City for Wheat
Summit II, the first official reaction to
the proceedings was issued late last
week. The Commodity Task Force
of the American Bakers Association
on May 18 expressed support of efforts to strengthen the transportation and marketing infrastructure for
wheat and agreed with two domestic farm policy priorities from the
Continued on Page 10
Ingredient Week Sponsored by
Story on Page 74

Butter-Krust business boosts
Sara Lee sales; widening loss
DOWNERS GROVE, ILL. - The addition of the Butter-Krust baking business, higher pricing to cover increased
wheat costs and a positive sales mix
led to a sales increase of more than 6%
for the North American retail bakery
segment of Sara Lee Corp. in the third
quarter ended March 31. Sales of $476
million compared with $449
million in the previous
year 's third quarter.
The North American
retail bakery segment,
meanwhile, sustained
an operating loss of $12
million in the third quarter, which compared with a loss of
$6 million in the previous year 's third
quarter. Transformation charges and
higher market prices for commodities
and other inputs primarily drove the
profit decline. Pricing actions and the
impact of the Butter-Krust acquisition
partially offset the widening loss.
Unit volume, excluding acquisi-

tions, for North American retail bakery dropped 4.4%. Lower volume
from exited, non-branded fresh bakery business offset volume growth
in frozen bakery and Senseo singleserve coffee.
"Adjusted sales in North American bakery were flat as we
continued to exit various unbranded business," said Brenda
Barnes,
chairman
and chief executive officer of Sara
Lee Corp., in a May 10 earnings conference call. "And in spite of
facing historically high flour prices,
which led to nearly $10 million of
incremental input cost, bakery adjusted operating margins for the third
quarter were basically flat with last
year, as price increases help offset
high commodity and energy costs."
Sara Lee maintained its position as
Continued on Page 16

With revision, 2006 flour output
up to just under 400 million cwts
WASHINGTON - The final summary
of U.S. flour production in 2006, just
issued by the Bureau of the Census in
the U.S. Department of Commerce, increased output for the year by 2.5 million cwts to near 400 million, the largest in five years, or since 2001. The final
summary presents an upward adjustment from the revised preliminary estimate of mill output based on quarterly
reports issued by the Census Bureau.

The final summary places production
of wheat flour in 2006 at 399,860,000
cwts, up 4,887,000, or 1.2%, from
394,973,000 in 2005. It also was up
5,935,000, or 1.5%, from 393,925,000 in
2004, the recent low but was still down
4,661,000, or 1.2%, from 404,521,000 in
2001. It was down 21,410,000 cwts, or
5.1%, from the record wheat flour output of 421,270,000 cwts in 2000.
Annual 2006 flour output was
originally estimated in February at
397,360,000, up 2,387,000, or 0.6%,
from the prior year.
The 1.2% increase in final 2006 production followed a gain of 1,048,000
cwts in 2005. This marked the first time
since 2000 there have been two successive yearly increases. This followed a
Continued on Page 70

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Milling & Baking News - May 22, 2007

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