Grain and Oilseed Milling

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 572 grain and oilseed milling companies in the US produce flours, edible oils, and breakfast cereals from grains and oilseeds. Firms also sell byproducts of the milling process as animal feed or fertilizer. Major product categories are flour milling, rice milling, malt manufacturing, wet corn milling, soybean and other oilseed processing, refining and blending fats and oils, and breakfast cereal manufacturing.

Stricter Food Labeling Requirements

Grain and oilseed manufacturers must comply with a variety of food labeling regulations.

Shifts in Demand Due to Dietary Trends

Grain and oilseed milling companies can face swings in demand due to changing consumer diets and food fads.

Industry size & Structure

The average grain and oilseed milling company has about 102 employees, operates at 1-2 locations and generates $143 million in annual revenue.

    • The grain and oilseed milling industry consists of about 572 companies that employ 58,600 employees and generate $82 billion in annual revenue.
    • There are about 204 flour milling firms with over 13,800 employees, along with about 56 rice milling firms with about 5,400 employees.
    • There are about 35 malt manufacturers with about 950 employees, and about 57 breakfast cereal manufacturers with 12,500 employees.
    • There are about 35 wet corn milling companies with about 6,200 employees, along with about 108 soybean and other oilseed processors with 10,400 employees.
    • There are about 77 fats and oils refining and blending companies with about 9,100 employees.
    • The grain and oilseed milling industry is highly concentrated - the top 50 companies account for 87% of industry revenue.
    • Large US flour milling companies include Ardent Mills. Archer Daniels Midland, Grain Craft, Miller Milling, Bay State Milling Co, and General Mills. Large US edible oils producers include Archer Daniels Midland, Bunge, Cargill, and CHS.
                                  Industry Forecast
                                  Grain and Oilseed Milling Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Coronavirus Update

                                  Apr 29, 2022 - Slow Pace of Corn Planting
                                  • The US corn and wheat crops planting season is off to a slow start due to a cool spring and wet conditions across the Corn Belt. Both crops were behind the average planting pace in the US Department of Agriculture’s (USDA) latest Crop Progress report released on April 25. Corn planting in the 18 states that seeded 92% of the 2021 crop was 7% completed on April 24, rising just three percentage points from the previous week, and falling short of 9% as the average of pre-report trade expectations, the USDA indicated. Seeding was behind by 16% compared to the same date a year earlier and about half the average progress for the date during the 2017-21 crop years.
                                  • In a move that lifted prices of edible oils, globally, Indonesia in April banned palm oil exports. Indonesia accounts for more than half of the global supply of palm oil, which is widely used in products ranging from cakes to cosmetics, Reuters reports. The Indonesian government acted under pressure to control cooking oil prices at home. However, the ban on palm oil exports is unlikely to last more than a month as Jakarta has limited infrastructure to store the surplus oil and the country faces mounting pressure from buyers to resume shipments, according to Reuters.
                                  • The cost of wheat, a raw material of millers, is rising steeply due to the Russian and Ukraine conflict. Ukraine and Russia together account for 14% of global wheat production, but exports have been strained by the fighting in Ukraine, closed ports, and boycotts of products from Russia. As a result, wheat futures prices rose to $10.99 per bushel on March 1, 2022, a price not seen since 2008. Depending on how long the conflict lasts, Ukraine farmers may not be able to plant spring crops, which would result in a year of down production.
                                  • Global vegetable oil prices hit a record high in March 2022, according to an April report by United Nations’ Food and Agriculture Organization (FAO). The run-up in vegetable oil prices was driven by higher prices for sunflower, palm, soy, and rapeseed oil. Greater demand than supply was the underlying theme for the price increases.
                                  • Bakers are poised for the largest wave of new product introductions in years. Bakers worked to maintain discipline during the pandemic regarding stock-keeping units, focusing on higher-margin products, and balancing a desire to offer customers variety with a need to keep plants operating as close to capacity as possible. As the pandemic wanes, things are charging. “I think it’s a real opportunity for smaller bakers to pick up some of the smaller volume products, according to Robb MacKie, president and chief executive officer of the American Bakers Association. MacKie urges millers to help capitalize on changing consumer perceptions of grain-based foods. "We talk about, ‘How can we break the mold?’ ‘How can we do new flavors?’ That’s where you come in. Bakers are looking for partners.”
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