Milling & Baking News - December 27, 2011 - 18

Data 

NAMA issues ﬁrst ﬂour output data; decrease of about 3% indicated
WASHINGTON — New data just issued by the North American Millers’ Association on flour production by leading U.S. milling companies point to a continued downward trend in flour output by U.S. mills. After initially issuing only a “total” flour production figure on Dec. 12, NAMA eight days later released additional data on U.S flour production filling out the picture of third-quarter production activity in milling and aimed at partially replacing statistics previously gathered by the Census Bureau in the U.S. Department of Commerce. The Census compilations were suspended at mid-year in response to cutbacks in federal budgets for such industrial production data. Based on the initial NAMA release as interpolated by Milling & Baking News, flour production by U.S. mills in JulySeptember totaled 105,410,000 cwts, down 2.9% from 108,593,000 in the same quarter of 2010 as reported by the Census Bureau. Third-quarter production was up 5.1% from 100,313,000 in the second quarter. NAMA retained Veris Consulting, Inc. to survey the 24 largest U.S. wheat, durum and rye milling companies on flour production in the third quarter of 2011 (July, August, September). Data in this report are based on voluntary reporting to Veris. Because smaller millers were not included in the survey, the collected data represent production from 95.4% of the industry’s daily capacity (as listed in the Grain and Milling Annual 2011). The new data include output of durum semolina and whole wheat flour as well as 24-hour milling capacity. Regional data also are available (and will be covered in an upcoming issue of Milling & Baking News). Wheat grind and millfeed production are not disclosed. An initial appraisal by Milling & Baking News suggests that with the exception of the aggregate flour number, interpolation to arrive at approximate national output figures are either inadequate or questionable in comparing durum semolina numbers and consequently flour-ex-semolina data with prior Census material. All 24 companies responded to the survey, NAMA said. Acknowledging that the survey covered less than 100% of total output, NAMA cautioned that its numbers do not accurately reflect industry volume. No estimates were
18 / December 27, 2011 Milling & Baking News

made to bring the volume up to 100 %. NAMA said the Census Bureau did assist in the transition to private collection of flour production data, including disclosing the names or number of respondents to their surveys. The Census did note in footnotes accompanying past reports that some numbers had been estimated. Therefore, data published in this report may not be comparable to historical reports. Third-quarter 2011 wheat flour production was reported by Veris on behalf of NAMA at 100,561,000 cwts. Daily or 24-hour capacity for the reporting 24 milling companies was 1,449,470 cwts. Grain and Milling Annual 2011 showed daily capacity for the same companies at 1,519,960 cwts. Milling & Baking News divided the NAMA number by “.954” to obtain its quarterly national production estimate and then compared it with existing Census data. At 105,410,000 cwts, the total interpolated by Milling & Baking News, July-September 2011 output was the 12th largest quarter on record. The record was October-December 2000 at 109,673,000 cwts, followed by July-September 2007 at 109,017,000, July-September 2000 at 108,838,000 and July-September 2010 at 108,593,000. The available data (both NAMA and Census) indicate flour output in the first three quarters of 2011 totaled 305,747,000 cwts, off 2.2% from 312,604,000 in January-September 2010, the record. It was down 1.7% from 310,941,000 in January-September 2009. Whole wheat flour production in JulySeptember was 5,645,000 cwts for the 24 companies submitting data. The figure equates to an estimated total production of 5,892,000 cwts, adjusted for the 4.2% of capacity that did not contribute data. This estimate is based on the assumption that mills that did not participate in the Veris survey are devoting the same percentage of flour production capacity to whole wheat production as the 95.8% all wheat flour production capacity that did participate. The 5,645,000-cwt total for whole wheat flour equated to 5.6% of total flour production during the quarter. The 5.6% share would compare with a 5.0% share of total flour production in 2010-11 as estimated by Milling & Baking News (based on data collected from a comparable sampling of the largest milling companies).

The 5% share last year, in turn, was up from 4.6% in 2009-10 and 4% in the two years before that. While year-ago quarterly data are not available, the fact whole wheat flour production was 5.6% of total flour output strongly suggests that whole wheat production was continuing to grow in the United States. If the adjusted 5,892,000 cwts were to be repeated each quarter during the balance of the crop year, whole wheat flour production in 2011-12 would total about 23.6 million cwts, up 15% from the year before. Durum semolina production in the third quarter provided by NAMA and covering the same 24 companies was 6,996,000 cwts. That compares with the Census placing durum semolina output in the same quarter of last year at 8,580,000 cwts. That difference reflects the likelihood that the omitted companies include one or two engaged in durum milling. Based on a six-day week, the largest 24 flour milling companies in the JulySeptember quarter ran at an operating rate of 90.1% for total flour, down from 91% in July-September 2010 but up from 84.7% in April-June. For whole wheat, the indicated operating rate was 63.4%, likely a meaningless figure. Given the steady increase in production of whole wheat flour in recent years, it is impossible to imagine a large percentage of dedicated capacity is shut down nearly 4 days in 10. While several companies operate milling capacity specifically dedicated to whole wheat flour production, a large amount of whole wheat flour is milled in swing capacity that also produces white flour. The 63% figure does suggest swing mills have plenty of capacity to accommodate additional whole wheat flour demand without the addition of new capacity. Operating rate data for semolina also is highly problematic. Figures provided by NAMA indicate an operating rate of 91.0% during the third quarter, which compares with a figure a year earlier, generated from Census data, of 81.9%. During the second quarter, the durum milling operating rate (again, using Census figures) was 78.1%. Numbers actually submitted by NAMA for the third quarter are listed below. MBN

North American Millers' Association
Flour data gathered from 24 largest milling companies Production Daily capacity (1,000 cwts) (cwts) Wheat ﬂour 100,561 1,449,470 Whole wheat ﬂour 5,645 115,671 Semolina 6,996 99,821
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Milling & Baking News - December 27, 2011

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