A look behind new data on flour disappearance
April 6, 2010
There are two very different ways of thinking about the data on wheat flour availability in 2009, as presented beginning on Page 1 of this issue. The first, and perhaps the most obvious, is to express disappointment about an apparent downward trend in domestic disappearance. This is so even though the rate of decline is minuscule. The decrease of 0.5 per cent in total domestic disappearance is a measure subject to all sorts of statistical misinterpretations and even errors, particularly when dealing with numbers as large as 414,074,000 hundredweights. The latter is the official estimate of wheat flour disappearance in 2009 that was just made by the Economic Research Service of the U.S. Department of Agriculture. That total being down from the peak of 417,155,000 hundredweights in 2007 is one of the negatives implied by the data.
While the executives and companies of grain-based foods would, of course, have preferred for disappearance to increase rather than decrease, these changes need to be examined within the context of the total food marketplace as well as the economy. Most important of all is considering “the share of stomach” that wheat flour foods attained in one of the more difficult economies of recent memory. Comparable statistics are not yet available for all foods, but it is likely that as total flour disappearance shrunk minimally in 2009 and was down only 0.8 per cent from the pre-recession peak of 2007, its setback was much smaller than that experienced by other foods. It is hardly necessary to look beyond the tough operating conditions other food industries like meat and poultry have experienced to know that the grain-based foods business has little to fret about.
If the decrease in wheat flour disappearance is worrying, then the pessimistic assessment of these data worsens in looking at per capita calculations. The problem here arises mainly in seeking to relate disappearance to actual consumption. Disappearance is a factor of supply made up of flour
production plus imports, modified only by the deduction of exports. That is far from being an accurate assessment of consumption. Too often in the past these two concepts have been confused, and even a careful study of the latest numbers does little to relieve this problem.
Except for periodic surveys conducted to determine family consumption patterns, which have differed from these supply-based calculations, the E.R.S. has relied on estimates of waste, loss and products not consumed to determine per capita availability. For several decades now, the agency has arbitrarily said that 30 per cent of the flour counted in its disappearance calculations is not consumed. In effect, that means, on the basis of 2009 data, that more than 120 million hundredweights of flour were wasted in manufacturing, at retail and in home losses. That number is rather difficult to imagine. This is especially so during hard times when incomes and jobs are threatened and economizing becomes the driving influence. Good sense alone prompts the conclusion that waste and loss during such times would be measurably less than during prosperity. Accepting that conclusion would point to the likelihood that actual consumption of wheat flour in 2009 exceeded the number arising from a quick glance at the published data.
The data place average per capita disappearance of wheat flour, including whatever waste and loss occurred, at 135 pounds, compared with 137 in 2008 and 138 in 2007. No one in grain-based foods may like a trend like that. This is so even though total disappearance has hardly changed, holding above 99 per cent of the record aggregate in 2007. Considering how the economy has weighed on food spending at retail and that grain-based foods still has a long way to go to re-capture its eminence as a producer of products good for consumers, the raw flour disappearance data for 2009 tell a much better story than might first be thought.