Nalivka: Supply and Use Data
Industry analysis centers on data and information and its interpretation. Interpretation of data is important, none more so than a key data point that is referenced often – per capita consumption. It is important to understand how this number is generated and how it is best referenced, particularly regarding demand.
A Supply and Use table provides a quick reference that captures annual U.S. production, imports, cold storage, and exports presented in one place. The data in the table follows the format: U.S. beef production plus on farm production plus cold storage stocks at the beginning of the year plus U.S. beef imports (total supply) minus U.S. beef exports minus cold storage stocks at the end of the year (total use). The final figure can be referred to as Total Disappearance which provides a reference to the quantity of beef or pork that moved through the system.
Total Disappearance provides solid information about the annual flow of beef or pork through the supply chain. Also important in analyzing markets is demand and to this end, incorporating changes in population are important in creating the Supply and Use data and thus, the Total Disappearance estimate is divided by Resident Population to generate Per Capita Consumption.
Because consumption is closely tied to demand, the term consumption may be misleading. Per Capita Use provides a more accurate description. This is the total supply of beef or pork on a per capita basis that flows through the supply chain. Current Sterling Marketing data indicates that in 2023, every American will consume 56.8 lbs. of beef compared to 59.2 lbs. in 2022. Since our cattle inventory is the lowest since 2015, the current per capita figure is often compared to 2015 and in that context, it is the lowest per capita figure since 2015. But the comparison ends there.
In 2023, U.S. beef production, though down 6% from a year ago, will still be 3 billion pounds greater than in 2015! So, contrary to any implication concerning demand with reference to consumption, beef production in 2023 and population growth will be major factors contributing to the drop in the per capita use estimate. Beef demand has increased significantly as consumers respond to beef products that are consistently of much higher quality and branded. I think it goes without saying that quality is largely the result of expanding and incorporating the pool of quality genetics into the herd. Certainly, per capita use of beef in 2023 may be the lowest since 2015, but the comparison stops there.
