Milling & Baking News - May 22, 2007 - (Page 1)

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