SIC 2041 Flour and Other Grain Mill Products

Encyclopedia of American Industries | 2005 | Copyright

SIC 2041
FLOUR AND OTHER GRAIN MILL PRODUCTS

This industry comprises establishments primarily engaged in milling flour from wheat, rye, and other grains except rice. Rice millers are categorized in SIC 2044: Rice Milling. Establishments involved in corn milling by the wet process are categorized in SIC 2046: Wet Corn Milling.

Products of this industry include plain flour or mixes and doughs prepared from milled ingredients. Establishments that supply mixes and doughs prepared from purchased ingredients are categorized in SIC 2045: Prepared Flour Mixes and Doughs.

NAICS Code(s)

311211 (Flour Milling)

Industry Snapshot

In the flour milling industry, explosive growth during the mid-1990s had been tempered by growing environmental and health concerns, as well as a weakening economy, by the turn of the century. Shipments of flour and other grain mill products fell from a record high of $8.045 billion in 1997 to $6.650 billion in 2000, according to the U.S. Census Bureau. There were 385 mills in the United States in the late 1990s, slightly reversing the trend of the past few decades toward fewer mills, and highlighting milling companies' optimistic investment patterns. Most of the industry's value ($6.1 billion) was derived from wheat flour, while corn mill products accounted for $696 million in shipments.

While the industry has expanded, its customer base and marketing focus have changed radically. Especially after World War II and accelerating rapidly beginning in the 1970s, domestic flour-consumption patterns shifted away from household consumers and toward commercial bakers, including fast-food outlets. Due to general lifestyle changes and economic expansion, household baking has declined considerably; individual consumers increasingly tend to purchase their bread, dough, and mixes prepared from grocery stores and bakeries. Flour use, then, has become more and more institutionalized. At the same time, the domestic market overall has flourished, much to the industry's benefit; the United States was, for much of the twentieth century, by far the world's leading exporter of flour and grain mill products, and exports were the industry's lifeline. By 2000, exports accounted for only 3 percent of all flour. The fading international presence of the United States in the flour industry has, moreover, coincided with a growing worldwide demand for flour and grain mill products. Nonetheless, the bulk of the flour industry has contented itself to focus on the domestic market.

Organization and Structure

Although any grain (rice, oats, barley, corn, millet, sorghum, and wheat) can be ground into flour, most of the world's flour was produced from wheat; the industry consumed more than 790 million bushels of wheat in 1998. Using standard milling procedures, 100 pounds of wheat yielded approximately 72 pounds of white flour. In addition to flour, the milling process produced millfeeds, which were made from pieces of bran and other portions of the wheat kernel. Millfeeds were used as ingredients in livestock food.

Flour could be packaged for sale to the household or bakery markets or used as an ingredient in bakery mixes, breads or doughs, or pastas. Different bread varieties were made with varying recipes but, on average, 100 pounds of flour could make about 150 one-pound loaves of bread. The bread and cake industry consumed approximately 75 percent of the flour milled in the United States. Other flour products included cookies, cereals, gravies, soups, whiskeys, and beers. Flour products were also used in nonfood applications such as the manufacture of plywood adhesives, industrial starches, fertilizers, paving...

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