Milling & Baking News - November 29, 2005 - 7

E D I T O R I A L

The unimaginable happens in flour export trade

lthough the numbers are small, even minute
in the context of the overall flour situation, the
latest world flour trade data issued by the International Grains Council provide fascinating insights for
grain-based foods into how swiftly the world of flour is
changing. This page has long decried, and some might
say mourned, the demise of exports as a significant
outlet for U.S. flour mills. The latest I.G.C. estimates,
though, not just underscore the shrinkage in U.S. flour
exports, to a current annual total less than four days'
grind. They also show how American flour millers have
sustained a dramatic drop in market share, losing out
not just to its long-time competitor, the European Union,
but to other nations that once were hardly considered
serious participants in global flour business.
The I.G.C. lists ten countries as flour exporters. Ranking at the bottom of this list, tied with India, is the United States. As an industry that until the 1970s was the
world's largest flour exporter, accounting for as much as
40 per cent and more of global trade, American milling's
situation is frightful as shipments plummeted to just 3.4
per cent of aggregate exports. Yet, that is what happened
in 2004-05. The Grains Council places U.S. exports at
305,000 tonnes in wheat equivalent, or 4.9 million hundredweights, which is the smallest since well before
World War II. It not only represents shrinkage in market
share, but in absolute volume, which had reached a recent peak above 2 million tonnes in the mid-1960s.
Continuing to lead flour exporting, a position it has
held since the U.S. lost out in the 1970s, is the European
Union. The E.U. exported more than seven times the
quantity of flour moved by U.S. mills, but its outgo,
2.2 million tonnes in wheat equivalent, represented a
dramatic fall from its high mark of 6,249,000 tonnes in
1996-97. This drop, along with an equally dramatic setback in E.U. market share, to barely 25 per cent from a
peak of 56 per cent, provides little solace for American
millers. No satisfaction also stems from seeing shippers
like Turkey moving 1.5 million tonnes in 2004-05, Argentina 520,000 tonnes, and the United Arab Emirates
holding steady at 500,000 tonnes.
Several anomalies stand out in the I.G.C. export flour

data. Turkey's pace of shipments, double the previous
crop season and contrasting with barely 200,000 tonnes
in 2001-02, primarily reflects expanded exports to Iraq.
That, in turn, came from the impact of war and insurgency on food production. Iraq, which once produced
almost all of its own flour, imported 450,000 tonnes in
2004-05, and one suspects that financing for most came
from the U.S. Treasury. Thus, it appears that one of the
many consequences of the Iraq war is elevating Turkey
to its second position as a global flour exporter.
Even more startling is the way that revisions in I.G.C.
estimates for Canadian flour exports and U.S. exports and
imports reveal the rising importance of America as an outlet for Canadian flour. For the first time in history, Canada
exported more flour in 2004-05 than the U.S. did. While
the numbers are small in the context of total production,
as are U.S. imports of 290,000 tonnes of wheat equivalent,
they reveal an interesting - not yet significant - shift in
relations between the two North American nations. The
U.S. is buying a minuscule share of its flour needs from
Canada, but as a result, Canada is exporting more flour
than the U.S., and U.S. imports rank among the largest.
The picture is of a flour market strikingly different from
what anyone predicted a few years ago.
It is also amazing that all of these changes have occurred at a time when total world flour trade has been
steady, hardly wavering much above or below 9 million tonnes of wheat equivalent for four crop years.
This volume has been maintained even as the largest
importer, Libya, has built domestic milling to the point
that imports are declining. Building milling capacity in
countries that have been major importers is the major
force accounting for the transformation of the global
flour business. It has happened before and its continuation, once seen as pointing to a sharp fall in flour exports, seems to be offset by growth in demand in other
countries. The problem is that American millers have
not participated in this ebb and flow, for many reasons,
some economic and some political. Yet, with the huge
changes that are continuing, it would be foolhardy to
say American millers have no chance of regaining a
leading position in flour exporting.

Who was Harry Bullis with? William C. Edgar?

t takes only a simple e-mail message to make one
realize how fleeting fame is. This particular message came from the offices of the North American
Millers' Association where commendable efforts are
under way to have the association records show the
company affiliations of millers elected honorary members, first of the Millers' National Federation and now
of NAMA. By any measure, that is a praiseworthy task,
meant to update a record that is incomplete for failing
to identify the companies of all the distinguished
members who had been honored by their peers.
While the number of unknown company affiliations
was relatively small in a list that begins in 1929, some of
the names where questions had to be asked did amaze
members of this publication's staff with memories more
institutionally grounded than that of the relatively new
and young NAMA staff. Who is Harry A. Bullis is the
sort of question that startled. Mr. Bullis, who became an
honorary member in 1959, had a distinguished career as
president and then chairman of General Mills, Inc. in the
bakingbusiness.com / world-grain.com

immediate post-World War II years. As a close associate
of the company's founder, James Ford Bell, Mr. Bullis
was credited in those earlier years with the lead role in
creating the modern General Mills.
Mr. Bullis and several other millers, all well known
during their active careers but now forgotten in the
dimness of history, were not the only ones who reminded this publication of the brevity of fame. Another name on the list of those whose affiliations was
unknown was William C. Edgar. As long-time editor
of The Northwestern Miller, Mr. Edgar was considered
not only the most influential journalist in milling but
also a powerful force in the revolution from stone
grinding to modern milling methods. His weekly editorials urged millers in no uncertain terms to operate
sensibly, to hedge their wheat and flour positions, to
seek an adequate return, and to respect the needs of
wheat farmers and flour users. He was a "thunderer"
in his writing. Now, the lack of knowledge as to who
he was provides the ultimate lesson in humility. MBN
Milling & Baking News, November 29, 2005 / 7

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Milling & Baking News - November 29, 2005

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