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 560 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.

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.

Stricter Food Labeling Requirements

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

Industry size & Structure

The average grain and oilseed milling company has about 102 employees, operates at 1-2 locations, and generates $188 million in annual revenue.

    • The grain and oilseed milling industry consists of about 560 companies that employ 62,400 employees and generate $105.6 billion in annual revenue.
    • There are about 202 flour milling firms with over 14,050 employees, along with about 58 rice milling firms with about 5,740 employees.
    • There are about 30 malt manufacturers with about 870 employees and about 70 breakfast cereal manufacturers with 12,095 employees.
    • There are about 32 wet corn milling companies with about 6,265 employees, along with about 105 soybean and other oilseed processors with 9,460 employees.
    • There are about 80 fats and oils refining and blending companies with about 8,775 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

                                  Jun 21, 2024 - Prices Fall Amid Declining Food Sales
                                  • According to the latest US Bureau of Labor Statistics data, producer prices for grain and oilseed milling firms fell 7.5% in April compared to a year ago after posting a flat previous annual comparison. Nevertheless, while producer prices have declined since mid-2022, they remain elevated by historical standards. Grain and oilseed milling inventories and shipments declined by approximately 10% in March year over year amid falling food industry sales and profits, Census Bureau data shows. Employment by grain and oilseed millers was flat in April year over year, while average wages at food manufacturers rose 4.2% in May compared to a year earlier to $23.19 per hour, down slightly from their record high in April, BLS show.
                                  • A rail strike in Canada that could significantly disrupt the US-Canada cross-border grain trade is increasingly likely, The Loadstar reported in June. Contracts for locomotive engineers, conductors, and yard workers at Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) expired at the end of last year but were automatically extended until a new labor agreement is reached. The issues are primarily worker rest provisions and fatigue management. CN and CPKC have claimed that neither can operate their railways with “only essential goods,” which includes grain, and that any operation by either railway must be an “all or nothing” proposition. Canada, a major US trade partner, relies heavily on rail transport, so a railroad strike there could significantly impact US agricultural trade, producers, and consumers -- particularly for grains and grain products, according to Grain Journal.
                                  • Flour production in the US fell to a 12-year low in 2023 due to wheat shortages caused by unfavorable weather conditions, fewer farms growing wheat, and global market instability, the National Agricultural Statistics Service (NASS) reported in February. Moreover, domestic flour production was the smallest in the fourth quarter of last year since 2010. Whole wheat flour production, which has been trending downward for eight years, declined by 6% in 2023 compared to 2022 and was down 25% from 2015, according to NASS. Data from NASS and other sources shows the production of whole wheat flour in 2023 was the smallest for any year since 2008-2009. Whole wheat flour production accounted for just 4.3% of total US flour production in 2023, down from 4.5% in 2022, 4.7% in 2021, and 5.7% in the peak year 2015, reports. Flour prices are rising on falling production.
                                  • Planted area and average farm prices received by producers for corn, soybeans, and wheat are forecast to drop this year relative to 2023, according to the USDA’s Grains and Oilseeds Outlook for 2024. The agency’s initial expectations for 2024 total planted area of the three crops is projected at 225.5 million acres – a decline of about 1% from last year, reflecting expectations of lower prices and a reversion to a more typical level of prevent plant acres. Broken out, planted acreage of corn and wheat is projected to fall while planted soybean acreage is expected to increase, according to National Agricultural Statistics Service data. US demand for soybeans is expected to rise, driven largely by growth in biofuel use. Meanwhile, season-average farm prices received by producers for corn, soybeans, and wheat are forecast to be lower than in 2023 and below the average of the past 3 years.
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