New NAMA leader faces 2009 flour data

by Morton Sosland
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Quite a startling coincidence occurred in flour milling with the naming of a new president of the industry’s main management association in the same week as data first became available on wheat flour output in 2009.  It is highly unlikely that this meshing was planned, since the choice of Mary K. Waters as president of the North American Millers’ Association was announced in line with an orderly selection and approval process that has brought a worthy successor to NAMA’s first president, the retiring Elizabeth A. (Betsy) Faga. Yet, putting aside even a remote possibility of this being planned, it is tempting to ascribe importance to these two events — the one so positive and the other sounding a warning of sorts in the form of two successive years of output decreases.  

Ms. Waters, whose background in the food industry and in government makes her an ideal choice, joins milling at an auspicious time. While it is likely that she will focus on nurturing already excellent relations with government, she very likely understands that her success also will be measured by how the industry itself thrives under a range of circumstances.

As has been observed on this page, no industry, in food or across the whole of corporate America, has done better than milling in the difficult economic times of the past several years.  A part of this stems from the excellence of the industry’s leadership, of the companies that comprise the NAMA membership as well as of the association itself. Yes, milling has assigned to others, particularly the Grain Foods Foundation, responsibility for promoting consumption of wheat flour foods, but those who serve as leaders through NAMA also realize the importance of success in cultivating the good will of consumers as well as in government.

The preliminary flour production data for 2009 from the Census Bureau, which not so incidentally are compiled with funding from the millers’ association, had few surprises. It largely confirmed the slight lag, only 0.3 per cent, in output from the prior year. The result was the fourth largest output on record, totaling 414,996,000 hundredweights. This is no small feat in such difficult times for millions of consumers and is a much happier result than realized by many other food sectors. Yet, it is disappointing that this marked the second successive year of output reductions from the recent peak of 418,836,000 in 2007. U.S. production has notably failed to gain on the record of 421,270,000 achieved in 2000. This is the longest period in more than a quarter of a century that a new output peak has not been achieved.

At one time in the not too distant past, this performance would have been attributed to an export shortfall. But export business is no longer a central focus of NAMA. It has become a minimal (yet, very important marginally) factor in milling. Total output and domestic disappearance have become parallel, underscoring how the industry’s fortunes are tied to consumer demand. If there’s anything disturbing about the new flour data, it is the indication that per capita consumption in 2009 fell one or two pounds, to just under 135 pounds, contrasted with the recent high of 147 in 1997.  If per capita had just held in that period, current consumption would be 30 million hundredweights more. That is significant by any measure.

All of this happening just as Ms. Waters is becoming NAMA president brought to mind the record that one industry executive chalked up. The reference is to the late James J. Feeney, who took over managing the flour business of General Mills, Inc. in the early 1970s when per capita consumption was near its modern low, and retired several decades later when it had climbed to near the peak. Recalling how Mr. Feeney’s retirement saw him being feted for this happening on his watch prompts the wish that Ms. Waters has a similar experience.

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