17-million-cwt gain brings flour output close to record

by Neil Sosland
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WASHINGTON — Production of wheat flour by U.S. mills in 2007 increased 4.4% over 2006 to the second largest total on record and less than 1% below the record in 2000, according to data just issued by the Census Bureau of the U.S. Department of Commerce. Output in the 2007 calendar year aggregated 417,574,000 cwts, up 17,714,000 from 399,860,000 in 2006 and only 3,696,000, or 0.9%, less than the record of 421,270,000 in 2000.

The past year’s output gain affirmed the recovery in flour production that began with a rise of hardly 1 million cwts in 2005 and continued in 2006 with a larger gain. These three years of increases reversed a period of years in which flour output had been on a downward course. The output in 2007 was up 22,874,000 cwts, or 5.8%, from the recent low of 394,700,000 in 2002.

October-December 2007 production, as reported by the Census Bureau, was up 5.1% from a year earlier. This was the tenth consecutive quarter in which flour production exceeded a year earlier. This was the longest stretch of output increases in recent memory.

Along with the gain in flour output, grind of wheat and production of millfeed in 2007 also recorded sharp increases.

The North American Millers’ Association provides funding to the Census Bureau in support of the compilation of these statistics.

Production in only five years has exceeded the 400-million-cwt mark. In addition to the 2000 production peak at 421,270,000 cwts and second place 2007 at 417,574,000, 1999 was at 411,968,000, followed by 2001 at 404,521,000 and 1997 at 404,143,000. The year 2006 followed at 399,860,000, 1998 at 398,914,000, 1996 at 397,776,000, 2003 at 396,215,000, 2005 at 394,973,000, 2002 at 394,700,000 and 2004 at 393,925,000.

Registering the largest year-to-year gain since 1983, or in 24 years, the 2007 increase of 17,714,000 cwts was more than three times the gain of 4,887,000 in 2006 from 2005 and much more than the increase of 1,048,000 in 2005. It contrasts with a decrease of 2,290,000 in 2004 from 2003. An increase of 1,515,000 occurred in 2003.

The 17,714,000-cwt increase in 2007 was the fourth-largest annual gain. The largest was 31 million cwts in 1945 in response to a surge in post-World War II relief shipments, followed by 1947 at 26,599,000, 1983 at 20,680,000 and 2007 at 17,714,000. The recent increases were actually overshadowed by output drops of 9,821,000 cwts in 2002 and 16,749,000 in 2001. The latter was the largest setback since 1949 when U.S. flour production plunged 44,782,000 cwts with the sudden halt of relief shipments to Europe. The two-year drop in 2002-2003 of 26,570,000 cwts compares with the cumulative increase of 23,649,000 in 2005-07.

At the same time, the three successive years of increases through 2007 represented the first time this has happened since 1991-1994 when flour output rose in four successive years, ranging from 5.1 million in 1994 to 16,590,000 in 1993.

Starting with the period beginning in 1970, flour production by U.S. mills has increased in 27 years and decreased in 11. In this same period, annual changes ranged from an increase of 20,680,000 cwts in 1983 to the decrease of 16,749,000 cwts in 2001.

Since the start of Census Bureau compilations in 1926, output has increased in 53 years and decreased in 28. For the entire period, production has risen at an annual average rate of 2,554,608 cwts. As noted above, the sharpest increase was 31 million in 1945 to supply post-World War II relief shipments to war-ravaged nations. The largest decrease was 44,782,000 cwts in 1949, as these relief shipments ended.

Production of wheat flour in 2007 included durum semolina, which, according to the Census Bureau, was 32,576,000 cwts. This was up 2% from 31,948,000 cwts in 2006.

Flour production-ex-semolina in 2007 increased 17,086,000 cwts, or 4.6%, to 384,998,000, compared with 367,912,000 in 2006. It was up 5.7% from 364,135,000 in 2005 and 4.9% over 366,966,000 in 2004. The current total also was 5% from 366,524,000 in 2003, 6.3% above 362,289,000 in 2002. It was up 3.6% from 371,591,000 in 2001 but down 1.2% from the record in 2000 of 389,521,000 cwts. It also was 0.2% less than 385,882,000 in 1999 although data for the latter year are not strictly comparable because of a semolina definition change starting in 2000.

The Census Bureau in 1998 discontinued monthly production reports, which had been compiled since 1926, in favor of quarterly data. This was the most important change in the compilations since 1981, when the Census Bureau made major revisions in its monthly and annual reports. Data on rate of grind, average flour production per working day and extraction were discontinued. This prompted Milling & Baking News to calculate these measures based on the statistics provided by the Census Bureau.

Milling & Baking News elected to base its computations of milling operations and average production per working day on a six-day week, whereas since 1950 the Census Bureau had based these compilations on a five-day workweek.

By quarters, output in 2007 ranged from 108,787,000 in July-September to 99,796,000 in January-March, while the variation in 2006 was between 103,878,000 cwts in the third quarter and 97,053,000 cwts in the second.

Average monthly production of flour in 2007 was 34,798,000 cwts, up from 33,322,000 in 2006.

Average production of flour per working day in 2007 was computed at 1,360,000 cwts, up from 1,307,000 in 2006. The daily average compares with 1,287,000 in 2005. 1,279,000 in 2004, 1,291,000 in 2003, 1,285,000 in 2002 and 1,318,000 in 2001. The record daily average was 1,372,000 cwts in 2000, followed by 1,360,000 in 2007 and 1,342,000 in 1999.

These averages reflect a simple arithmetic average of the quarterly computations. By quarters, flour output per working day in 2007 ranged from 1,431,000 cwts in the third quarter to 1,296,000 in the first, while the variation in 2006 was between 1,349,000 cwts in the third quarter and 1,260,000 in the second.

The daily average in 2007 was based on 307 days, up from 306 days in 2006, but unchanged from 307 in 2005 and also down from 308 in 2004. The missing day in 2006 with 307 the norm reflects the fact that the year began and ended on Sunday. The extra day in 2004 was Feb. 29.

Capacity at 1,532,000 cwts

The Census Bureau estimated the 24-hour capacity of U.S. mills in October-December 2007 at 1,532,000 cwts, up 26,000 cwts from 1,506,000 a year earlier. Daily capacity was 1,492,000 at the end of 2005.

Daily capacity in October-December was unchanged from the third quarter but up 4,000 from the second and up 5,000 from the first. It was the fourth largest for a quarter. The largest daily capacity was 1,604,000 cwts in April-June 2001, followed by 1,588,000 in January-March 2001, 1,543,000 in July-September 2001, 1,532,000 in July-September and October-December 2007 and 1,531,000 in both October-December 2000 and October-December 2001.

As recently as June 1993, the 24-hour milling capacity had been placed at 1,348,000 cwts, then a record, and followed by sizable upward revisions. Prior to these changes, the peak in U.S. milling capacity was 1,296,000 cwts in June 1991.

Even earlier, the daily capacity high was 1,223,596 cwts in 1948, which ruled as the peak for 40 years. But the earlier years also were not strictly comparable because of changes in Census Bureau definitions.

Operating rate at seven-year high

Rising to a seven-year-high, the average rate of flour milling operations in 2007 was 88.9% of capacity, based on the six-day week, up from 87.1% in 2006, 86.2% in 2005 and 85.5% in both 2004 and in 2003, as well as 86.4% in 2002. It was 84.2% in 2001, 90.3% in 2000, 88.4% in 1999, 89.1% in 1998, 91.6% in 1997 and 91.7% in 1996. By quarters, the average rate of grind in 2007 varied between 93.4% in July-September and 84.9% in January-March, while the variation in 2006 was between 89.9% in the third and 84.1% in the second quarter.

Wheat grind by U.S. mills in 2007 aggregated 920,346,000 bus, up 3.5% from 888,905,000 in 2006. The grind compares with 884,101,000 bus in 2005, 876,047,000 in 2004 and 889,188,000 in 2003. It was the second largest wheat grind. The record was 944,868,000 bus in 2000, followed by 920,346,000 in 2007, 917,797,000 in 1999 and 914,036,000 in 2001. To date, wheat grind in only these four years has surpassed the 900-million-bu mark.

The range of quarterly grind was between 238,605,000 bus in July-September and 221,109,000 in January-March, while the variation in 2006 was between 231,896,000 in the third quarter to 214,993,000 in the first quarter.

Weighted average flour extraction rate (the average percentage of flour extracted from wheat) by U.S. mills in 2007 rose to a 10-year high of 75.6%, against 75% in 2006. It compares with 74.5% in 2005 and 74.9% in 2004. It was up from 74.3% in 2003, 74% in 2002, 73.8% in 2001, 74.3% in 2000 and 74.8% in 1999. Extraction at 75.6% in the current year was the highest since 1997 when it reached 76%.

Millfeed production in 2007 totaled 7,121,339 tons, up 4.2% from 6,835,891 in 2006. It was 6,826,308 in 2005, 6,763,793 in 2004. The year was the fifth largest millfeed total. The record was 7,374,115 tons in 2000, followed by 7,274,979 in 2001 and 7,185,908 in 1994.

By quarters, millfeed production varied from 1,871,055 tons in July-September to 1,700,175 in January-March, while the variation in 2006 was between 1,782,718 in the third quarter and 1,667,358 in the second.

October-December up 5.1%

Flour output in the fourth quarter of 2007, October-December, amounted to 106,670,000 cwts, up 5.1% from 101,450,000 a year ago. It was the fifth largest output for any quarter. The record was October-December 2000 at 109,673,000 cwts, followed by July-September 2000 at 108,838,000, July-September 2007 at 108,787,000, October-December 1999 at 108,213,000 and October-December 2007 at 106,670,000.

October-December was the 10th consecutive quarter to show an increase over a year earlier. Gains in this period ranged from 5,268,000 cwts in April-June 2007 to 677,000 in October-December 2005. The extended increases, in turn, followed four successive months all down from a year back, with decreases ranging from 2,163,000 to 533,000.

From the start of quarterly reporting, output in 29 quarters has exceeded 100 million cwts. October-December 2007 was the third largest total for the fourth quarter. The record was in 2000 at 109,673,000 cwts, followed by 1999 at 108,213,000, 2007 at 106,670,000, 1998 at 106,525,000 and 1997 at 106,119,000. The recent low for the fourth quarter was October-December 1976 at 68,445,000.

Flour output in October-December 2007 was down 1.9% from 108,787,000 cwts in the July-September quarter.

Average flour production per working day in October-December 2007 was 1,385,000 cwts, down from 1,431,000 in July-September but up from 1,335,000 in the fourth quarter of 2006. It was the fifth highest. The record was 1,443,000 cwts in October-December 2000, followed by July-September 2007 at 1,431,000, 1,413,000 in July-September 2000 and 1,405,000 in the fourth quarter of 1999.

Average rate of mill operations in October-December was 90.4% of six-day capacity, down from 93.4% in July-September but up from 88.6% in the fourth quarter of 2006.

Wheat grind in October-December amounted to 235,096,000 bus, up 3.6% from 226,835,000 in the fourth quarter of 2006. It was down 1.5% from 238,605,000 in July-September. Wheat grind for the quarter was the seventh largest. The record was 247,738,000 in October-December 2000.

The extraction rate in October-December, as calculated by Milling & Baking News, was 75.6%, down from 76% in July-September but up from 74.5% in October-December 2005.

Millfeed production in October-December totaled 1,798,484 tons, a gain of 4.7% from 1,717,809 in the fourth quarter of 2006. It was down 3.9% from 1,871,055 in July-September.

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