Census barely changes 2008 flour production estimate

by Josh Sosland
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WASHINGTON — After flirting with the all-time high in 2007, U.S. flour production took a modest step backward in 2008, falling by less than 1%. In the Flour Milling Products Summary just issued by the Bureau of the Census of the U.S. Department of Commerce, flour production last year was placed at 416,283,000 cwts, down 2,553,000, or 0.6%, from 418,836,000 in 2007.

The estimate for 2008 was virtually unchanged, down only 1,000 cwts, from the preliminary figures issued by the Census Bureau in February. The adjustment, the smallest in memory, contrasts with last year when flour production was raised 1,262,000 cwts in the annual summary.

With flour production at 416,283,000 cwts, 2008 represented the seventh year in which U.S. mills have produced more than 400 million cwts of flour. Still, production was about 5 million cwts shy of the record 421,270,000 cwts milled in 2000. When the 2000 record will be eclipsed remains to be seen, but there is at least statistical cause to expect a new record in 2009 or 2010. On average, flour production has increased 3.6 million cwts per year over the past 20 years. Of course the 3.6 million average includes wide year-to-year swings, ranging from a 21.7 million cwt increase in 1996 to a 10.8 million cwt decrease in 2001.

Production in 2008 was well above the lows of the current decade. Output in 2008 was up 3% from 403,391,000 cwts in 2006 and was up between 5.1% and 5.7% from production in the four-year period of 2002-05, when flour output held in a tight range of 393.9 million to 396.2 million cwts. Production in 2008 was up 12,140,000 cwts, or 3%, from 1997 when output of 404,143,000 cwts represented a record then and when the still standing per capita record of 147 lbs was set. Since that time, the Census estimated the population has expanded by 31,571,000 persons.

Per capita disappearance of flour in 2008 was 137 lbs, down 1 lb from 2007.

The 2,553,000-cwt decrease in flour production in 2008 from 2007 followed a dramatic gain of 15,445,000 cwts, or 3.8%, in 2007 and 8,418,000 cwts, or 2.1%, in 2006. As noted above, the year to year changes during 2003 to 2005 were modest, equating to up or down moves of less than 1% each year. Those years, in turn, followed two of the most difficult in modern milling history — 2001 and 2002, when production declined 26,570,000 cumulatively, equating to among the sharpest decreases in the last 50 years.

At the recent production low of 393,925,000 cwts in 2004, flour production was the smallest since 1995, when mills produced 388,689,000 cwts.

Daily capacity of U.S. mills in the Flour Milling Products Summary for 2008 was down from the preceding year. At 1,527,569 cwts, the benchmark fourth quarter capacity figure was down 7,088 cwts, or 0.5%, from 1,534,657 cwts in the fourth quarter of 2007 but was still up 21,553 cwts from 1,506,016 cwts in 2006.

The national average mill operating rate in 2008 was 87.5% of six-day milling capacity, down from 88.9% in 2007 and exactly the same as the operating rate in 2006. Still, the operating rate was an improvement from 86.2% in 2005 and 86% in 2004. Even in 2000, when flour production hit a record high, mills were not operating at 90% of capacity, though at 89.6% the industry did not miss by much.

Wheat grind in 2008 was down 1.7% from 2007. Millfeed production fell 4.9%, versus the flour production decline of only 0.6%.

The North American Millers’ Association provides funding to the Census Bureau in support of the compilation of these flour milling data.

Perhaps nothing is as remarkable in the 2008 summary as the minuscule revision of 1,000 cwts from the preliminary total.

By contrast, the Census Bureau revised 2007 production up 1,262,000 cwts in its final summary. In 2006, production was revised upward by 2.5 million cwts in the final summary, but the figure was further revised upward by an additional 3,531,000 cwts in the 2007 annual summary. Other figures in recent years, both up and down, such as 1,034,000 cwts in 2005, 4,060,000 cwts in 2004, 3,099,000 cwts in 2003 and 6,018,000 cwts in 2002 all underscore the small change in the 2008 revision. For decades, annual revisions consistently have been in the millions, not the thousands.

Given the nominal aggregate change, it is not surprising that few revisions were made from the February report in production estimates for states or state groups. Production in Nebraska and Iowa combined was reduced by 638,000 cwts from the initial estimate, based on a revision of the fourth quarter estimate. Production in Ohio was raised 129,000 cwts, based on revisions of first and second quarter data. Estimates for Tennessee and Kentucky were raised 431,000 cwts, while Texas was raised 77,000 cwts.

These four states/state groups that were revised compared with the 18 that were left unchanged from the February report. This lack of change represented a 180-degree turn from last year when the Census in the summary revised all but two states/state groups — Illinois, Indiana and Wisconsin, and Ohio.

In 2008, the "all other" states category was unchanged in the final summary from the February report. Last year, the grouping was up 71,000 cwts from the preliminary number. This grouping comprises Arizona, Hawaii, Maine and Massachusetts.

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