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 Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation 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

                                  Recent Developments

                                  Dec 5, 2022 - Grain Prices Fall on Russia Deal
                                  • Grain prices fell sharply in November on news that Russia agreed to a four-month extension of an agreement that allows Ukraine to resume shipping grain, fertilizer, and other agricultural products through three Black Sea ports. Russia had briefly suspended its involvement in the grain agreement in late October, threatening to bring shipments to a halt, The Wall Street Journal reported. That agreement, signed by Russia, Ukraine, Turkey, and the United Nations in July, allowed Ukraine to resume shipping food products through the Black Sea ports, partially lifting a Russian blockade that threatened to deepen the global food crisis, according to WSJ. The July deal allowed Ukraine to resume shipping wheat, corn and other products at nearly prewar levels, bringing global prices down.
                                  • New research shows genetic engineering can increase the oil content of seeds by 18%. The discovery by scientists at Singapore’s Nanyang Technological University (NTU) could help increase food security by increasing the nutritional value of certain foods, while reducing the pressure on agriculture, News Atlas reports. The research builds on existing knowledge of how oil builds up in plant seeds and edible nuts. The Wrinkled1 (WRI1) protein is known to play an important role in the accumulation of oils.The NTU team was able to image the molecular structure of this protein for the first time and experimented by injecting modified WRI1 proteins into the leaves of certain plants, which increased levels of a dietary lipid called triacylglycerol. Follow-up experiments comprised the same treatment on a model plant Arabidopsis thaliana, which boosted the oil content in its seeds by 15%-18% compared to controls.
                                  • Oilseed production in the European Union is forecast to rise by 3% in 2022/23, according to a report by the United States Department of Agriculture’s Foreign Agricultural Service (FAS). The rise in production was based on increased planted areas of about 10% for all three major oilseeds – rapeseed, soybeans, and sunflower – but lower average yields for sunflower and rapeseed due to hot and dry conditions in major producing regions, according to the 12 October Global Agricultural Information Network (GAIN) report. Soybean planted area was forecast to increase by 11.1%, with rapeseed and sunflower areas expected to be up by 9.7% and 10.3% respectively. Rising commodity prices and uncertainty in the Black Sea market due to Russia’s invasion of Ukraine, are the major drivers for the increases in EU oilseed planting.
                                  • The worsening drought in California is prompting unprecedented cuts in water allocations to rice farms, resulting in a drastic reduction in the number of acres planted. Until recently, rice producers in Northern California – who hold some of the state’s most senior water rights – had largely been spared, The Wall Street Journal reported in September 2022. But no longer. Unprecedented dry winter weather prompted federal officials to cut the amount of water set aside for the cultivation of water-intensive rice. This spring, California farmers sowed 285,000 acres of rice, a 30% drop from 2021, and the lowest since the 1950s, according to a June estimate by the US Department of Agriculture, the steepest decline for any major California crop this year, according to WSJ. California typically produces about one-fifth of US rice.
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