Milling & Baking News - November 7, 2006 - (Page 1)

Theinewsweeklyiofigrain-basedifoods NEWS F E AT U R E LATE Demand surge for ethanol raising questions, but seen as sustainable The surge in demand for ethanol in the United States and the world, coupled with agriculture's desire to meet that need, whether with corn in the U.S. or sugar in Brazil, has begun to change the look of food and feed production, and raised agronomic, economic and ethical questions, but is here to stay, proponents strongly agree. Ethanol production in the United States will exceed 5 billion gallons from 105 plants this year, up 20% from 2005 and more than three times 2000 production of 1.6 billion gallons from 54 plants, according to data from the Renewable Fuels Association (R.F.A.). The feedstock for the vast majority of that ethanol will come from 2,150 million bus of corn, 20% of the 2006 crop, according to U.S. Department of Agriculture forecasts. Corn use for ethanol is up 62% from 1,323 million bus in 2005, and up from 627 million bus in 2000. The most noticeable result of increased corn use for ethanol has been stronger demand and higher corn prices. The National Corn Growers Association (N.C.G.A.) has estimated demand for corn to produce ethanol has added 5@10c a bu to the price Continued on Page 26 Hal Ross Flour Mill opening celebrated at Kansas State MANHATTAN, KAS. - In a powerful demonstration of commitment to the future of milling by the industry and Kansas State University, a new state-of-the-art flour mill has been dedicated as a teaching and research facility at K.S.U. The Hal Ross Flour Mill officially opened on Oct. 20 on the K.S.U. campus in Manhattan, with leaders of major flour milling businesses - Cargill and Archer Daniels Midland Co. as well as Buhler AG - addressing a gathering of more than 200 during an hour-long mill dedication program. Calvin Grieder, chief executive officer of Uzwil, Switzerland-based Buhler AG, said at the dedication ceremony that it was during a conversation three years ago with Fred Merrill, chairman of Cereal Food Processors Inc. and a 1949 graduate of K.S.U., that he became convinced a Buhler-K.S.U. partnership would benefit both organizations. "We are proud to be a part of this and hope we'll be able to show you that over the years we have developed good Continued on Page 10 inside NOVEMBER 7, 2006 / NEWS MAUMEE, OHIO - Net income at The Andersons, Inc. in the third quarter ended Sept. 30 was $8,387,000, equal to 52c per share on the common stock, up from a loss of $636,000 in the year-ago quarter. Sales rose 16% to $335,871,000 from $288,755,000 in the year-ago quarter. Operating income in the grain and ethanol group rose to $11,950,000, up from a loss of $2,504,000 in the third quarter a year ago. Revenue in the grain and ethanol group rose 31% to $208,540,000.The Andersons said total grain gross profit in the grain and ethanol group included the sale of a large number of wheat bushels at excellent margins Continued on Page 8 The Andersons surges to profit in quarter I.B.C. submits offer to S.E.C.; could face stock deregistering KANSAS CITY - Interstate Bakeries Corp. on Nov. 2 submitted a settlement offer to the staff of the Division of Enforcement of the U.S. Securities and Exchange Commission in connection with a previously disclosed S.E.C. investigation. The S.E.C. first issued a formal order of private investigation on Jan. 28, 2005. That investigation concerned matters related to a previously announced investigation by I.B.C.'s audit committee into the manner for setting its workers' compensation reserves and other reserves. According to I.B.C., under the proposed Continued on Page 22 THIS WEEK Bunge operating profits up sharply 16 Ingredient Settlement in Krispy Kreme lawsuit Leadership changes set at Ralcorp 24 37 Week sponsored by 38

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Milling & Baking News - November 7, 2006