While it’s the rare executive in grain-based foods who has not wrung hands in frustration about the wild gyrations in grain markets this year, the most searing experience has been endured by those involved with milling durum into semolina as well as the manufacturers using this ingredient to make pasta. “Searing” is the adjective used, not because durum has registered even more dramatic fluctuations than other grains, but because it hasn’t. Of all the grains, durum’s performance this year is unusual because it posted one of the sharpest early gains in response to a disappointingly small crop while it has avoided the subsequent price declines that have occurred in other classes of wheat as well as grains. Current spot prices for durum are two-thirds higher than a year ago, while most other wheat shows little change or is below a year ago.
For pasta manufacturers the upturn in durum means semolina prices posting similar advances, to the point that these executives may rightly claim they have learned how to live with volatility that a short time ago was beyond belief. After all, it was a little more than three years ago that durum and semolina prices soared into record-breaking territory, attaining levels that were a few dollars short of being twice current prices.
Several factors make the experience of the durum-semolina-pasta industry unique. Outstanding is the way the industry has been able to maintain consumer favor for pasta in the face of unprecedented escalation of ingredient costs. In contrast to other sectors of the industry, including bread, where unit sales have barely held or even declined, pasta continues to shine. According to a recent report by the SymphonyIRI Group, pasta unit sales in the past 12 months were better than 3 per cent ahead of the prior year, exceeding by a full percentage point the gains in crackers and cookies and in sharp contrast with reductions posted by cold breakfast cereals and fresh bread and rolls. Bolstered by a similar gain in sauces used with spaghetti, the performance of this category in these harsh economic times once again shows how grain-based foods have the qualities consumers desire. This is so even when worry about high unemployment influences shoppers.
Being able to maintain these favorable trends for pasta, especially in these difficult times when consumers are guarding their spending, also means the industry has managed to keep its pricing from being a negative. Data compiled by the Bureau of Labor Statistics place the recent national average price for spaghetti and macaroni at $1.27 per pound, compared with $1.11 a year earlier, an advance of 14 per cent. Measured against the 75 per cent climb in its basic raw material, that retail price reflects initiatives aimed at restraining cost pressures. In the case of semolina, that mainly occurs in certain products through blending of other wheat with durum, especially in times like the current market where spring wheat is $4 to $5 per bushel less than durum.
With this year’s durum crop in the United States less than half of the prior year’s outturn, due to planting delays and a less than favorable growing season, the industry must look to Canada for supplemental supplies. The Economic Research Service projects 2011-12 durum imports at 40 million bushels, which would raise the total supply near 2010-11. As might be expected, the supply-demand picture for durum is sharply different from prior seasons. Food use is forecast at 80 million bushels, not much changed from 84 million in 2010-11. But exports are cut to 20 million bushels from 43.3 million. Most important in looking ahead is the E.R.S. expectation that 4.6 million bushels will be used for seeding the 2012 crop, up from 2.5 million this year. Along with good weather, this prospect should mean relief in 2012-13 from what ranks as one of the most trying periods ever for any part of grain-based foods.