Milling & Baking News - September 23, 2008 - (Page 1)

THE NEWS WEEKLY OF GRAIN-BASED FOODS SEPTEMBER 23, 2008 / Whole wheat flour production growth slows abruptly in 2007-08 Story on Page 27 LATE NEWS ConAgra Foods net jumps in quarter OMAHA - ConAgra Foods, Inc. posted net income of $442,200,000 in the first quarter ended Aug. 24, equal to 95c per share on the common stock, up 152% from $175,400,000, or 36c per share, during the same period of the previous year. First-quarter results received a 71c-per-share boost from the sale of ConAgra's trading and merchandising operations. Sales for the quarter were $3,065,600,000, up 17% from $2,621,100,000 during the same quarter of the previous year. In reporting its first-quarter results, ConAgra noted several segment changes. The company has merged Continued on Page 8 15,100 14,718 12,415 9,859 8,759 Whole grains expand in food service and international markets. 7,528 New channels KANSAS CITY - Production of whole halt to the double-digit growth of the prior wheat flour, which had grown at a several years. Production was up 19% from double-digit clip each of the previous the year before in 2006-07, 26% in 2005-06, four years, gained only modestly in 13% in 2004-05 and 16% in 2003-04. 2007-08, according to data gathered by In addition to suddenly interrupting Milling & Baking News. the extraordinary rising trend of the preWhole wheat flour vious several years, production in the the slowdown repWhole wheat flour production year ended May 31, resented a dramatic year ended May 31 2008, was 15,100,000 shift in the dynamcwts, up 2.6% from ics of whole wheat a revised 14,718,000 demand relative to cwts in 2006-07. white flour. DurProduction amounted ing the years earto 12,415,000 cwts in lier in the decade in 2005-06, 9,859,000 in which whole wheat 2002-03 2004-05 2006-07 2004-05 and 8,759,000 flour was climbing Source: Milling & Baking News cwts in 2003-04. at a dramatic clip, Estimates were based on data gath- production of white flour (as calculated ered from 20 flour milling companies. by Milling & Baking News, based on the Participating companies have collective whole wheat data and Census figures for wheat flour milling capacity (excluding total flour production) was growing only durum) of 1,335,000 cwts a day, account- modestly, or even contracting. ing for 93% of total U.S. flour milling caFor instance, whole wheat flour pacity, as calculated based on the Grain production in 2004-05 rose 1,100,000 & Milling Annual. cwts from 2003-04. That same year, The 2.6% increase in whole wheat flour white flour production was down Continued on Page 43 production in 2007-08 marked an abrupt in thousand cwts FEATURE With Teamsters impasse broken, I.B.C. set to pursue reorganization KANSAS CITY - Interstate Bakeries Corp. and the International Brotherhood of Teamsters have agreed to end their standoff over a new union contract, a move that will allow the bankrupt baker to pursue reorganization with financial injections from Ripplewood Holdings L.L.C. The announcement was made as part of a hearing Sept. 12 in the U.S. Bankruptcy Court Western District of Missouri in which the court approved I.B.C.'s request to borrow an additional $79 million under its debtors-in-possession (DIP) financing, as well as its request to extend the expiration deadline on the DIP financing to Feb. 7, 2009, from Sept. 30, 2008. I.B.C. said it has received plan funding commitments from an affiliate of Ripplewood Holdings L.L.C. to invest $130 million in exchange for an ownership stake, and from Silver Point Finance, L.L.C., Monarch Alternative Capital L.P. and McDonnell Investment Management Continued on Page 9

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Milling & Baking News - September 23, 2008