Milling & Baking News - January 26, 2010 - (Page 1)

THE NEWS WEEKLY OF GRAIN-BASED FOODS JANUARY 26, 2010 / NEWS Stock Market Analysis Takeover storm ahead for grain-based foods? A Agriculture and climate change Story on Page 26 LATE NEWS Jeb Bush to address A.B.A. annual meeting WASHINGTON - Former Governor Jeb Bush of Florida will be the keynote speaker at the annual convention of the American Bakers Association. Mr. Bush will speak March 15 at the Allied Trades of the Baking Industry breakfast. The meeting will be held March 13-17 at the Boca Raton Resort and Club in Boca Raton, Fla. "Governor Bush will be a tremendous source of insight and inspiration to our members, and we are thrilled to have a leader of such caliber participating in our event," said Robb MacKie, A.B.A. president and chief executive officer. Mr. MacKie noted that the annual meeting's theme will be Continued on Page 8 wave of merger and acquisition activity the likes of which have not be seen in nearly a decade may be beginning to take shape in the food processing industry, said Eric Katzman, an analyst with Deutsche Bank, New York. Mr. Katzman and Mitch Pinheiro, an analyst with Janney Montgomery Scott L.L.C., Philadelphia, offered their perspectives on the outlook for food processing companies in recent interviews with Milling & Baking News. In addition to expanded merger and acquisition transactions, the analysts identified promotional activity and other deflationary pressure as creating a major question mark for the industry in the year ahead. While buyers were the principal drivers of the last wave of takeover activity around the year 2000, sellers, jarred by severe market swings of the past two years, may be the principal movers during the next round, Mr. Katzman said. "I think that a lot of the families and foundations and trusts that control public companies today are finally considering for the first time, 'What do the next 5 to 10 years look like?'" he said. "They want to know what Continued on Page 18 Winter wheat planted area the smallest since 1913 WASHINGTON - The National Agricultural Statistics Service of the U.S. Department of Agriculture on Jan. 12 estimated the area planted to winter wheat for harvest in 2010 at 37,097,000 acres, down 14% from 43,311,000 acres in 2009 and down 20% from the recent largest winter wheat area of 46,307,000 acres in 2008. The estimate for the current year marked the smallest area planted to winter wheat in the United States since 1913 and was well below the lowest of pre-report trade estimates. Of the principal winter wheat regions, only the Pacific Northwest increased plantings from a year ago. There was a 10% reduction in planted area in the hard winter wheat belt of the Southwest. The most severe losses in winter wheat area were indicated in the soft red winter wheat states of the Southeast and Central states. "Seeding began in August and by midSeptember was behind the five-year average," the U.S.D.A. stated in commentary accompanying the planting data. "The late row crop harvest and wet weather delayed planting in most states." The U.S.D.A. estimated area planted to hard red winter wheat for 2010 at around 27.8 million acres, down 12% Continued on Page 15

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Milling & Baking News - January 26, 2010