Milling & Baking News - October 7, 2008 - 15

semi-professionally for decades, though
he has diminished the activity since the
accident that required an air medical
evacuation resulting in life-threatening
injuries and a lengthy recovery.
Moving beyond durum milling
Recover, though, Mr. Miller did,
and his business has grown. Eventually Mr. Miller opted to venture
beyond the confines of durum milling. The company's move into bread
flour has allowed Miller Milling
to grow considerably. Capacity at
Winchester, 20,000 cwts, is triple the
original capacity there with a third
of the mill's production dedicated to
hard wheat flour.
Fresno capacity has doubled since it
opened with more than half of its 8,000
cwts of daily production comprising
hard wheat flour.
Miller Milling's newest mill is located in northern Mexico. Tamisa S.A.
de C.V. is a joint venture with Grupo La
Moderna S.A. de C.V., a Mexican conglomerate with operations that include
the nation's largest pasta business. The
mill, with daily milling capacity of
6,000 cwts, began operating in 1997.
In Mexico, California and Virginia, Mr. Miller said his overall business benefits from locations that
may not experience the volatility of
volume growth and contraction of
origin mills.
"We've struggled during recent periods with tight margins like the rest
of the industry because of overcapacity," he said. "With other companies,
we were part of the cause and suffered
the same ups and downs.
"Our industry goes through long cycles and is slow to adjust to supply and
demand cycles. The industry is tough
to enter and tough to exit because it is
very capital intensive and very esoteric, requiring very specific knowledge
about several subjects in a narrow field,
knowledge that frankly can only be
gained through experience."
Following a difficult period, Mr.
Miller said the outlook in 2008 is better, including for the pasta industry.
"The decline of Atkins allowed some
consumption trend reversals from the
period of decline, allowing better asset utilization," he said. "Milling as a
business is more attractive than was
the case a few years ago. Only a few
years ago, three or four, the non-food
business was seen as far more attractive. Capital intensive businesses like
milling, requiring a lot of concrete and
steel didn't appeal. Today, we are off
the lows of the earlier years but not in
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good enough condition to justify new
building. We seem to be at a point
where in certain markets, at certain facilities, incremental capacity additions
may be justified."
In his early years as a milling executive, Mr. Miller was not involved in
the Millers' National Federation. He
emerged as a contributor to the group
when he spoke eloquently on behalf of
the millers in congressional hearings
related to proposed restrictions on
wheat imports from Canada.
NAMA's work 'truly impressive'
"When I began getting involved in
NAMA, I started to realize how important it is both for the industry and

for me as a miller," he said. "NAMA's
accomplishments are truly impressive,
something you don't understand until
you're in it."
Asked for an example of this work,
Mr. Miller identified the Grain Foods
Foundation, an industry response
he said that would have been even
more effective had it begun several
years earlier.
"We didn't recognize the seriousness of the problem and didn't react,"
he said. "If we had, we would have
been able to mitigate the effects of the
Atkins diet. Not only are we having an
effect, we are more sensitive and ready
for the next threat. And there will be
something to follow Atkins. I wish we
had been in this position in the late
1990s, but we were complacent."
Mr. Miller in the interview and in
brief remarks at the annual meeting said neither public perception of
grain-based foods nor the other issues facing NAMA are new. A look at
the archives of NAMA (and Millers'
National Federation) speeches over
the decades show that nutrition, raw
material supply, government regulation and market effectiveness again
and again are topics confronted by the
group, he said.
"NAMA's issues are not single
events that you fix and then they're
over," he said. "We need representation for our membership to
fight the battles again and again
against unwarranted regulation.

"The threat to the industry doesn't
stem from the problems. It stems
from a weak organization, complacency, divisiveness, declining membership. Those are problems we are
fortunate not to face. But they are
problems that have led other organizations to implode."
Reflecting on the 10 years since
NAMA was created, Mr. Miller said he
counted himself among those skeptical of whether the different milling
groups combined to form the new association would effectively come together.
"I was concerned that we would
broaden issues to such a great degree
that we wouldn't be able to coalesce
around important matters," he said.
"I'm gratified I was wrong. Since the
merger, all the chairmen have been
conscious of the need to strike a balance and have been incredibly good
at shaping a NAMA agenda for a
common good.
"The combination also brought in
remarkably talented people outside
of flour milling as leaders under the
NAMA banner. There's no better
example than Rick Schwein, an oat
miller. It would have been a terrible
loss not to have him. My job will be
to continue to balance the group's
needs, to keep everyone unified, and
we always need to be vigilant against
growing complacent."
In addition to his predecessors,
Mr. Miller offered kudos to NAMA
staff, several of whom have considerable tenure.
"They have grown in their positions
and are remarkably experienced," he
said. "NAMA has access to power
in excess of what the industry's size
would warrant. I see it when we make
our visits to the U.S. Department of
Agriculture and Congress."
Looking ahead for the milling industry, Mr. Miller recalled that the wave of
building in the 1980s and early 1990s
would not have occurred but for the
fundamental shifts that made the industry fertile for change, beginning
with rail deregulation. While such
conditions for major change in milling do not exist today, Mr. Miller did
not rule out the possibility that such
changes could take place. Rising energy and transportation costs, issues
surrounding plant security and environmental pressures are only a few
of the emerging issues he said could
"change the deck again" and lead the
milling industry from evolutionary
change to revolutionary ones. MBN
- L. Joshua Sosland
Milling & Baking News

October 7, 2008 / 15

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Milling & Baking News - October 7, 2008

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