Caravan Ingredients, Lenexa, Kan., faced with increases in commodity costs, increased its prices on a wide range of products as of March 1. “As industry professionals know, the cost of raw materials has skyrocketed in recent months. During the last year, flour has almost doubled, while items such as eggs have nearly tripled. These increases have been driving our costs to record levels,” said Ian Trood, vice president, sales. The size of the increase will depend on specific product formulations, but typical increases will be about 10 percent.

Independent Bakers Association (IBA) representatives met with the United States Secretary of Agriculture Ed Schafer and Deputy Secretary Chuck Conner last month to discuss possible remedies to the hyper-inflated wheat market. IBA presented three items for the Department to consider: conservation reserve, PL 480 flour and wheat exports, and commodity market reforms. IBA asked for immediate action in opening 20 percent of the conservation reserves 34.6 million acres that now is idled from production. IBA suggested allowing acreage under contract to be opened for planting this spring for one year without penalty and early release of the 1.3 million acres expiring in September. Secretary Schafer said it was probably too late for action in time for spring planting and change in earlier decisions on the CRP “were unlikely.” IBA discussed FY 2008 exports of flour and wheat from the past three months under PL 480 Titles I, II and III for direct sales and humanitarian aid; and asked the Department to discontinue exports of hard red spring and baking flour until markets stabilize or for at least three months. Secretary Schafer said future exports of grains under PL 480 might be limited to soybeans and sorghum for the time being. The discussion also focused on possible mischief by future traders who, with rule changes under consideration at the Commodity Futures Trading Commission (CFTC), could allow a single entity to control 15 percent of the hard red spring wheat market. IBA Chairman John Popp said the spring wheat futures market is small enough in comparison to corn and other commodities to allow a handful of traders to control markets. What IBA concluded from the discussion was possible reduction of flour and hard red spring wheat exports under PL 480, opening of the CRP was not absolutely ruled out this year and an understanding that it is proceeding in the correct direction as to where to take its concerns on grain market manipulations.

Stewart Systems, Plano, Texas and AMF Bakery Systems, Richmond, Va., will merge the ownership of the companies by the end of March.

“We have worked with AMF on most of the major projects in the United States and abroad during the past few years. We realized that we can best support our customers through common ownership to provide more focused execution by each company,” said Nand Kumar, C.E.O., Stewart Systems.

AMF and Stewart Sytems will continue to operate as separate entities. The companies were feeling pressure from customers who were demanding both leading technology and integrated solutions. AMF will concentrate on dough processing (mixing and make-up) and the wrap room (packaging and distribution), while Stewart Systems will focus on thermal processing (proofing, baking, cooling and pan systems).

“With the technology we have developed, plus AMF's recent success in tray and tunnel ovens, we will be able to provide a comprehensive portfolio of pan handling, proofing, baking and cooling solutions to the bread, roll and tortilla segments,” said Len Kilby, president, Stewart Systems.

“AMF's core strength is mixing and make-up, as well as packaging and distribution. We have been spending our efforts on conveying and oven systems in order to provide a complete solution. With a full partner in Stewart focusing on the middle of the bakery, we will be able to focus our efforts on our fully integrated solutions in the back of the bakery,” said Tim Cook, vice president, sales and marketing, AMF.

The new holding company for Stewart and AMF will be called Ceres Industries, with the board of directors split evenly between AMF and Stewart shareholders. Kumar will serve as C.E.O. of Ceres Industries while Ken Newsome, president and C.E.O. of AMF will serve as president of Ceres. “When you combine the operating strengths of Stewart and AMF with the long-term capital commitment of Markel, we believe we can create a truly exceptional company,” says Kumar.

When calling for machine quotes or service, customers should look to the logo on the machine. If the machine has an AMF logo, call AMF. If it has a Stewart logo, call Stewart. AMF and Stewart sales teams will continue to work separately; however, during large projects or when supplying a complete bakery, AMF and Stewart will work together for one optimum layout. The company will reallocate production between plants consistent with its new product focus. Spooner Vicars will be independent from Stewart, AMF and Ceres Industries.