Milling & Baking News - August 16, 2005 - (Page 1)

Theinewsweeklyiofigrain-basedifoods / U.S. flour production in 2004 summary surpasses preliminary WASHINGTON - The final summary of U.S. flour production for 2004, issued Aug. 5 by the Bureau of the Census in the U.S. Department of Commerce, reveals an upward adjustment of 4,060,000 cwts, or 1%, from the preliminary estimate of mill output based on quarterly reports. The upward revision places production of wheat flour in 2004 at 393,925,000 cwts, down 2,290,000, or 0.6%, from 396,215,000 in 2003 and also down 27,345,000 cwts, or 6.9%, from the record output of 421,270,000 cwts in 2000. The moderate decrease, of less than 1%, in 2004 output from 2003 follows a single year of increase coming after two successive years of sharp reductions. Those two successive years of output reductions were themselves unusual, contrasting with the previous period when output rose almost consistently from year to year. The drops in 2002 and 2001 were among the largest flour output decreases in more than 50 years. Output in 2004 was the smallest since 1995, when mills produced 388,689,000 cwts. Prior to 2002, out put had exceeded 400 million cwts for three years in row, first reaching that level in 1997. Daily capacity estimates in the Flour Milling Products Summary for 2004 show increases Continued on Page 24 AIPC shares plunge amid rash of disclosures, including large loss KANSAS CITY - Progress at American Italian Pasta Co. toward recovery from the low-carbohydrate era sustained a severe setback last week when the company made a blizzard of disclosures, including plans to take a $60.7 million charge against earnings. The company's share price tumbled to an all-time low in reaction to the news, opening Aug. 10 in New York Stock Exchange trading at $14.20, a 32% decline from the Aug. 9 close and down more than 50% from the 52-week high of $30.01. The price was down 73% from the all-time high of $52.56 reached in June 2002. Third-quarter results, which were scheduled to be released Aug. 10, have inside Revised data change flour consumption trends WASHINGTON - Data from the annual summary of 2004 flour production, just issued by the Bureau of the Census, casts a new light on recent trends in flour consumption in the United States. The significant changes in the summary included an upward revision of 4,060,000 cwts in flour production and thus an equivalent gain in consumption from preliminary estimates and a decrease of 1,934,000 cwts in durum semolina output from the preliminary. As the result of these revisions, the Continued on Page 18 LATE been delayed and a conference call scheduled for that day was cancelled. Other disclosures by AIPC on Aug. 9 included the initiation of an internal investigation by the company's audit committee, including the engagement of forensic accountants; a review by the Securities and Exchange Commission concerning trading activity in AIPC stock; a steeperthan-expected 13% decline in third-quarter sales from the same period last year; suspension of the company's 18.8c per share cash dividend; and non-compliance with certain loan covenants necessitating waivers from its bank group. The charges against earnings were Continued on Page 11 AUGUST 16, 2005 NEWS NEW YORK - The New York City Department of Health and Mental Hygiene has asked city restaurateurs and food suppliers to voluntarily eliminate partially hydrogenated vegetable oils from the kitchen. The department said partially hydrogenated vegetable oils significantly raise the risk of heart disease through chemical modification resulting in relatively high levels of trans fat. Heart disease is the city's top cause of Continued on Page 10 N.Y. looks to stamp out trans fat THIS WEEK Sara Lee bakery earnings strong 12 Ingredient Marketing executive named at I.B.C. 16 Small cut in Canadian wheat duties Week 44 47

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Milling & Baking News - August 16, 2005