New numbers to measure food business

by Morton Sosland
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Hardly any manufacturing industry has more ways of measuring how it is performing than food processing. Indeed, if anything the available measures have tended to grow in number and complexity to the point that executives addressing food conferences often find themselves queried on a specific brand’s unit volume in a particular region or in a special sort of retail store or by locations within a store. Without even thinking about challenging the helpfulness or the value of data of such specificity, a yearning often arises for a different, less exact, but equally interesting, way of assessing how the food business is faring in these most unusual times.

This possibility surfaced as attention was given to the efforts of the International Grains Council to assess the status of the global grains industry. The Council, headquartered in London, is far removed from considering food manufacturing and processing in any of its obligations to explain supply-demand. Yet, in assembling information on how much grain (wheat and coarse grains) is used to make food, as distinct from industrial uses and feeding of livestock and poultry, the Council has come up with measures of the global food industry. After all, grain is the basic raw material for a huge swath of food manufacturing. It mainly represents the wheat and other grains milled or ground into ingredients.

According to the latest I.G.C. report, food use of grains in the current 2013-14 marketing year will total 643.1 million tonnes, a new record and up 15% from the start of the 21st century. While that rise of 15 percentage points over nearly the same number of years does not represent explosive growth, it signifies a demand steadiness that many others envy. It is also important to keep in mind that grain use, while offering that elusive global measure, is itself subject to analysis as milling and food processing find ways of using grains with greater efficiency.

The other international measures assembled by the Grains Council apply in different ways than “food use” to how the overall business is doing. “Feed use” outstrips food use by more than 25%, with a current year total of 824.9 million tonnes. Its growth in the current century also exceeds food use, at 19%. Those extra four percentage points of increase provide affirmation of how consumers are using their newfound gains in living standards to increase consumption of meat and poultry.

Remembering the large global population growth that is regarded as almost certain between now and the middle of the 21st century gives immediacy to these global grain numbers while heralding new directions for food. Rather than adjustments between food and feed use, which is often suggested as a likely consequence, industrial use of grains may find itself intensely examined as a way of assuring food adequacy. The I.G.C. estimates 2013-14 industrial use of grain at 314.4 million tonnes, up a whopping 178% from the 112.9 million used as the century began. Yes, it is making biofuels that absorbs 164 million tonnes this year, representing more than half of industrial use. With much pressure to slash use of carbon-emitting fuels like oil, the position of grain-based biofuels comes to mind, especially in a world that leaves issues like food shortages to last-minute reaction.

Use of global grain use data to measure well-being of the food industry is not far-fetched when the same numbers suddenly capsulize one of the most difficult issues facing the world in the 21st century. Producing enough food — some say 50% more is needed — to forestall hunger is a matter that increasingly demands attention, and not just from the food industry. By being aware of global grain use data, the food industry has basic facts of the sort that will be needed to determine the course ahead, for the industry as well as for individual companies that might find themselves at odds with such simple, but revealing, facts.
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