Cigarette Consumption

After World War II, U.S. consumption of cigarettes showed a long and steady period of growth, until it reached a peak of 640 billion in 1982. Since then, the decline has been about equally steep and steady. By 2002, consumption was down to 400 billion cigarettes.
The difference between U.S. cigarette production of 565 billion pieces and consumption of 430 billion pieces
in 2002 (shown below) largely is exports, which is discussed later in the report.

What has happened to reduce the consumption of cigarettes? First, according to periodic survey data published by the Center for Disease Control and Prevention, the proportion of the adult population of smokers stopped increasing and began declining shortly after the first Surgeon General’s report on the health effects of tobacco in 1964. After the proportion of adult smokers reached nearly 43% in 1966, it subsequently declined to about 23.4% in 2001.
Consequently, the size of the adult smoking population not only has failed to grow, it actually has declined from a peak of about 55 million in 1983 to a current level of about 49 million (a number about equal to the 1960 smoking population).

U.S. Consumption of U.S.-Grown Cigarette Tobacco
Since farmers grow tobacco, they likely are more interested in the consumption of cigarette tobacco than of cigarettes. From a peak of 1.17 billion pounds (processing weight) in 1963, U.S. annual cigarette tobacco consumption has declined to 747 million pounds in 2001.
The drop in pounds of tobacco smoked is a reflection of the declining number of smokers combined with a smaller amount of tobacco in each cigarette. A long steady decline in the amount of tobacco in cigarettes began in 1953 and continued to the late 1970s. For the first half of this century, cigarettes contained about 2.7 pounds of tobacco per thousand pieces. Since 1980, the tobacco content
has averaged about 1.7 pounds per thousand pieces—a 37% reduction from the level of the 1950s.
The utilization of U.S.-produced tobacco in cigarettes has been further reduced by the substitution of foreign-grown tobacco. The proportion of foreign tobacco in U.S.-manufactured cigarettes has been increasing since 1950. In 1950, foreign tobacco content amounted to 6%, but by 2001 it reached 48%.

The share of foreign tobacco in U.S. cigarettes might have been expected to decline in response to the 75% domestic content law that took effect January 1, 1994. However, the tariff rate quota, which replaced the domestic content law in September 1995, does not serve as an effective import barrier because of its generous size and because manufacturers can recover the duty they pay on imported tobacco if it is subsequently exported in cigarettes. During the September 13, 2001 through September 12, 2002 quota year, 247.4 million pounds declared weight were imported under the 332.2 million pound limit (amounting to 74% of the quota).
How do the combined forces of a gradually declining population of cigarette smokers, a declining per capita consumption rate, a reduced quantity of tobacco in each cigarette, and the substitution of foreign tobacco for domestic tobacco in cigarettes translate into consumption of domestic tobacco by U.S. smokers?
A simple linear projection puts the consumption of U.S.- grown tobacco by U.S. smokers at 203 million pounds in the year 2005.

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