Josh Sosland, editor of Milling & Baking News

KANSAS CITY, MISSOURI, US — US flour production in the most recent quarter showed scant change from the year before, but a deeper look at the US Department of Agriculture (USDA) data reveals hopeful signs, both from the production increase scored from a year earlier and by looking at capacity utilization trends from a different vantage point than in the past.

A modest 0.5% increase in flour production from a year earlier was indicated in the USDA National Agricultural Statistics Service Flour Milling Products report issued Aug. 3. Additionally, anomalies in the figures for a few states have raised the possibility the April-June total could be revised by the Department, possibly reducing or completely erasing the increase of 552,000 cwts from the second quarter of 2025.

Still, the increase as published deserves a shoutout. A small gain is better than none and much better than a decrease. For the previous five quarters, decreases have been the experience, quarter after quarter, relative to the same period the year before. The five down quarters in a row is a streak that has not been eclipsed in the last 30 years and reflected numerous contributing forces, including attacks on so-called ultra-processed foods, consumer infatuation with protein-rich foods, economic pressures and the increasing popularity of GLP-1 medications.

Given the array of forces weighing on flour demand, any signs of relief are welcome. While a downward revision is possible, flour millers anecdotally have indicated that a modest improvement in market conditions did in fact materialize in the second quarter and appears to have held up in the first two months of the third quarter as well.

If recent production figures are allowing millers to breathe a bit easier, a longer-term look at mill operating rates offer hopeful signs as well. For flour milling, like many businesses, capacity utilization represents a key barometer of the industry’s economic health. And, measured by long-term averages, recent milling operating rates have been teetering near levels associated with periods in which flour milling companies have not performed well.

In the first half of 2026, flour mills have operated at about 84.6% of six-day capacity, well below the 86.2% average of the current decade, 86.6% in the 2010s and 87.1% in the 2000s.

Tempering the concern prompted by recent operating rate figures is a wide gap that has opened between operating rates of durum mills and non-durum mills (the two combined make up the US flour total). As a result, aggregate milling operating rates may suggest that capacity utilization numbers for non-durum mills are worse than is actually the case.

In the most recent quarter, the operating rate for durum mills was 72.4%, 12.2 points lower than the aggregate flour rate. Capacity utilization for non-durum mills alone in the second quarter was 85.7% of six-day capacity, 1.1 percentage points better than the aggregate flour figure and considerably closer to the 86.6% average for the century to date than the 84.6% indicated in the total US milling operating rate.

In recent years, the spread in capacity utilization between durum and non-durum mills has widened 10.8 points in the 2020s from 4.9 in the 2015-19 period. The lower rates for durum mills have been attributed in the industry to the growing proportion of captive durum milling capacity, mills that are part of pasta production operations and often have capacity to spare. The issue has been percolating for years. Most US durum milling capacity today is part of a vertically integrated pasta business.  

Whatever positive spin may be placed on the latest figures, flour production trends remained depressed even after the quarterly uptick. Production over the 12 months ended June 30 of 416,312,000 cwts ranks second to last among rolling 12-month totals recorded over the last 56 quarters dating back to 2012. The “adjusted” operating rate remains below historical averages. Still, as the grain-based foods industry looks for ways to reignite growth, the second-quarter flour report offers milling some much-needed breathing space.

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Josh Sosland is president of Sosland Publishing Company, editor of Milling & Baking News and editor-in-chief of Food Business News. A member of the Sosland editorial staff since 1983, he covers flour milling, commercial baking, grain-based foods, and food industry business and economic trends. He graduated with an A.B. in economics from Harvard College in 1982.