Millers have 'obligation' to help feed the world's hungry, A.O.M. keynote speaker says
July 01, 1999
by Teresa Acklin
FORT WORTH, TEXAS Flour millers, their companies and the flour milling industry have an obligation to look beyond the balance sheet and profit and loss statements and embrace their responsibility in helping to feed the people of the world, according to Craig L. Hamlin, president and chief executive officer of ADM Milling Co., Overland Park, Kansas, U.S.
Mr. Hamlin made the remarks as the keynote speaker at the 103rd annual technical conference and trade show of the Association of Operative Millers, held May 15-19 in Fort Worth, Texas, U.S.
“The progress this industry, our businesses and respective industry associations have made over the past 100 years is really just the beginning of a long endeavor to feed the people of the world,” Mr. Hamlin said. “We have many opportunities afforded to us on a personal basis, as well as a business basis, that should influence, if not demand, a dimension in our areas of responsibility that goes beyond the obvious of material goods, balance sheets, profit and loss statements and asset utilization percentages.”
The flour milling industry has a vital position in the food chain, he said, and a responsibility to help provide the world's 5.9 billion people with affordable, nutritional grain-based food products, “knowing that each year we add 90 million people to the world population and each day there are 800 million people who go to bed hungry, if not starving, and we have only approximately 50 days of food supply in the world.” Mr. Hamlin said this “obligation factor” must be considered in each company's pursuit of its business goals. “We might tell ourselves that we are doing a good job in supplying food to the people of the world, but that is clearly not the case when you understand that approximately 13.5% of the population is hungry or starving,” he said.
To understand the reality of this obligation, Mr. Hamlin gave several illustrations of how anything less than a 100% effort can make a huge difference in individual lives.
By most standards, 99.9% effectiveness would be perceived as excellent, he said. “But on a very real basis, 99.9% effective in the United States would mean that 22,000 checks are deducted from the wrong payment account every hour.
“We would have no telephone service for 10 minutes each week. We would have unsafe drinking water for one hour each month. We would have no electricity for one hour per year. We would have 20,000 incorrect drug prescriptions filled per week. There would be 500 incorrect surgical operations each week. And today 12 babies would be given to the wrong parents.
“As you can see, perception versus reality in our obligation to feed people has a magnitude of scale of very serious consequences.”
The enormous changes in agriculture and the processing of agricultural products in the past few decades specifically consolidation and the globalization of the flour milling industry will continue to accelerate as intense competition drives companies to expand their product base, he said.
“The drive to globalization of our industry is fostered by external forces that have shifted all of us, to a certain degree, from U.S. or Canadian or European millers to operators in a global arena,” Mr. Hamlin said. “The free or fair trade concept, which is of crucial importance to our industry and respective organizations, is moving to balance world trade.”
He spoke of the dramatic transformation of the milling industry in the past generation. Since 1965, the number of U.S. flour mills has dropped to 200 from 423, while average daily milling capacity nearly quadrupled, to 7,400 cwts from 2,200 cwts, and operating capacity increased to 90% from 74%. Canada and the United Kingdom have experienced similar shifts, he said.
“As deleterious as this trend may seem, consolidation has created an environment where the quest for efficiencies in the areas of cost, yield, equipment, performance, information conveyance, human resources and market share has intensified, allowing our businesses to not only survive but thrive in a competitive world arena,” Mr. Hamlin said.
He added, “Some people would have you believe that competition is a razor that bleeds the soul of business. I would tell you that competition is the vital link that drives our quest for meaningful improvement in our business results in all categories.”
As the flour milling industry consolidates and becomes more global, Mr. Hamlin said, the companies that will grow will be those that establish a presence in their areas of core competency, that manage risk effectively, that have a desire to grow market share and that support fair trade practices in a world where 5% of the food consumed travels across international borders.
“It is important that we as individuals, as companies and as an industry do not allow ourselves to become enchained from further progress through past successes and narrow perspectives of the future and the unwillingness to manage risk so we may lead,” he said. “We cannot bring about prosperity by discouraging thrift, we cannot strengthen the weak by weakening the strong, we cannot lift the wage earner by pulling down the wage payer. We must understand our obligation to the world food chain.”
Mr. Hamlin said it was also imperative that millers cooperate and interact with other industry-related associations, such as the North American Millers Association, the Wheat Quality Council, the Wheat Foods Industry Council, the American Bakers Association and the Independent Bakers Association. “We all wrestle with issues of government regulation, consumer perceptions and individual companies' demands for efficiencies and excellence, as well as profitability, as we fight to grow our businesses,” he said.
The A.O.M. represents a segment of the food sector that offers a vital link to mankind, he said, with the power to govern the industry through change. “I have no doubt that the legacy we are providing will endure for the future,” he said.