Milling & Baking News - March 28, 2006 - (Page 1)

Theinewsweeklyiofigrain-basedifoods Domestic wheat flour use gains, but per capita dips in 2005 WASHINGTON - Initial estimates by the Economic Research Service of the U.S. Department of Agriculture confirm indications that domestic disappearance of wheat flour posted a small increase in 2005, but cut back on the size of the gain. The E.R.S. calculations also showed a further setback in per capita consumption of wheat flour in the United States instead of the earlier analysis pointing to this number holding unchanged from 2004 in the wake of prior setbacks. According to the E.R.S., disappearance of wheat flour in 2005 amounted to 396,035,000 cwts, up 1,206,000 from 394,829,000 in the prior year. The early tentative analysis of flour disappearance in 2005 pointed to a net use total of 397,500,000, which the E.R.S. now has reduced to 396,035,000. At the indicated level, which is subject to change with revised estimates of 2005 flour production, disappearance was down 17,204,000 cwts, or 4%, from the peak of 413,239,000 reached in 2000, the final year of the 20th century. That setback in the first half of the first decade of the 21st century contrasts with the aggregate increase of 73,318,000 cwts that occurred in flour consumption during the 1990s. If consumption falls in the full decade, it would be the first time that has occurred in a full century of records. Dividing the estimate of domestic disappearance by July 1 U.S. population results Continued on Page 14 General Mills third-quarter profit climbs 7%; sales up 3% MINNEAPOLIS - Strong top-line growth across all of its business units helped General Mills, Inc. overcome higher input costs, higher employee benefits expense and increased advertising investment in the third quarter ended Feb. 26. Net income in the quarter was $246 million, equal to 69c per share on the common stock, up 7% from $230 million, or 63c per share, in the third quarter of fiscal 2005. Both quarters included a restructuring charge of 1c per share, while 2005 results also were lowered by 15c per share for accounting and expense matters. General Mills posted net sales of $2,860 million in the third quarter, which was 3% higher than the previous year's third quarter. Segment operating profits of $479 Continued on Page 13 A need for proof Story on Page 21 inside MARCH 28, 2006 / LATE NEWS OMAHA - ConAgra Foods Inc. last week reported a $31.7 million loss for the third quarter ended Feb. 26, which compared with net income of $163.3 million, or 32c per share, in the previous year's third quarter. The loss per share was impacted by 43c per share of net expense from items that impact comparability, which largely included impairment charges, restructuring charges associated with implementing cost-savings programs and litigation charges. Net sales for the third quarter were $2,878.9 million, a 4.4% increase Continued on Page 8 ConAgra loses $31.7 million in Q3 Millers expect soft red production to bounce back in 2006 MARCO ISLAND, FLA. - Production of soft red winter wheat in 2006 should rebound smartly from the 19-year-low outturn recorded last year, a panel of grain and milling industry executives told members of the Soft Wheat Milling Committee of the North American Millers' Association during that group's annual meeting March 14 on Marco Island. The panel projected 2006 soft red winter wheat production at 362,866,000 bus, up 53,845,000 bus, or 17%, from 309,021,000 bus in 2005. The projected 2006 outturn was slightly above the recent five-year (2001-05) average soft red winter production of 358 million bus, but below the 10-year (1996-2005) Continued on Page 16 THIS WEEK Turano elected A.B.A. chairman 9 Ingredient Interstate Bakeries loss tops $20 million Cargill names lab in honor of Frost 13 38 Week sponsored by 42

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Milling & Baking News - March 28, 2006