Milling & Baking News - June 18, 2019 - 7

Editorial

Real-time responses to weak flour demand

uarterly figures on flour production for de- white bread by food retailers and the increasing percades have been relied upon by the milling centage of consumers seeking to avoid wheat foods.
industry as executives crafted and refined Also a factor has been stepped-up imports for flour and
long-term thinking about the direction their busi- flour-based products. Underscoring this influence were
nesses should take. Increasingly over the past year recent data showing per capita flour consumption in
or so, the connection between major corporate and 2018 actually rose slightly from the year before, while
industry decisions and quite recent data on flour pro- flour production was nearly unchanged from 2017.
duction issued by the U.S. Department of Agriculture
Weak flour production trends in the first quarter of
has appeared more immediate. While it is certain that 2019 extended beyond enriched white flour. Durum
these moves had been under consideration for some semolina production during the period, at 7,903,000
time, bold steps taken by leading milling companies hundredweights, was down 3.1 per cent from the
to rationalize milling production capacity represent a same period in 2018.
pragmatic response to a problem that in recent quarEven more dispiriting were data on whole wheat
ters only has been worsening.
flour milled. Production of 4,809,000 hundredweights
There was much about the first-quarter flour pro- was the smallest of any quarter since records were
duction figure to heighten concern in the milling first kept in 2014. Viewed hopefully for several years
industry. January-March 2019 marked the third con- in the early 2000s as an antidote for a sagging ensecutive quarter in which flour proriched white flour market, growth
Finding a way to stem
duction was down from year-earlier
flattened out in the early 2010s, and
production. At 103,647,000 hunin recent quarters whole wheat flour
declining demand for
dredweights, January-March proflour has never been more sales have been falling even more
duction this year was the smallsteeply than white flour.
important.
est in the last 16 quarters, or since
It's against this backdrop three
January-March 2015. The 1.9 per cent decrease in flour major milling companies have announced mill closproduction from January-March 2018 was the largest ings in recent years, including three by ADM Millquarterly drop in almost six years.
ing Co., five by Ardent Mills and one by Grain Craft.
Coincident with this spell of such anemic produc- In isolation, the moves have or would retire almost
tion, six-day flour milling capacity reached an all-time 67,000 hundredweights of flour milling capacity, but
high of just over 1,650,000 hundredweights of flour new construction is returning more than half of that
per day. With capacity at a record and production de- capacity back into production.
pressed, it was no surprise to see capacity utilization
While understandable in the current environment
at 82.6 per cent, the lowest level in 18 years dating for flour-based foods, the mill closings are anything
back to what was another difficult period for flour but a comprehensive fix for what ails the industry.
milling. For perspective, quarterly production would Finding a way to stem declining demand for flour
need to hit 113 million hundredweights for capacity has never been more important. The situation brings
utilization to touch 90 per cent of current capacity. into still sharper focus yet the importance for milling
Based on full capacity utilization (which mills are able and others in the wheat foods industry to vigorously
to exceed in brief spells), the U.S. industry is capable support the proposed checkoff program for breadof milling 125 hundredweights of flour in a quarter, or basket products. An informal survey of miller views
500 million per year.
on second-quarter grind did not suggest a dramatic
Many factors are contributing to weak flour produc- rebound, and a conclusion that the storm is nearly
tion trends, including a continuing deemphasis of (and past for flour production trends would seem wishful
unwillingness to aggressively promote) private label thinking at its worst. MBN
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Milling & Baking News - June 18, 2019

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