Chapter 2

Role & impact of U.S. livestock industry

International trade influences on animal agriculture industry

Overviews of animal livestock industries

Historically – most farms very diversified• How so?• How is it different today?

U.S. – 283 million consumers – plus demand in the international market = high output demand from U.S. livestock producers

Cash receipts from livestock products comprise 51% of all agricultural sales

22 states have cash receipts >$2b

Refer to table 2.3 Notice animal agriculture is positive –

others are negative Much is driven by cattle hides, beef,

fat/tallow, dairy

Volatility in the market has had significant impact on farm-gate profits• Not only U.S. supply/demand dynamics…but

international• If you are to be profitable long-term – know

the averages for your commodity, and understand how to ride the highs/lows

Global Perspective• Cattle domesticated in Asia & Europe• Provide: food, fiber, fuel, power• What is our main use of cattle?

How about a developing country?• 30 yr trend increasing cattle numbers

Greater demand for beef Increased export demand

• U.S. - largest producer• India – most cattle• Uruguay & Argentina – highest per capita

consumption

U.S.• Comprised of producing, processing,

consuming segments• Currently takes ~30m less head of cattle to

produce same amount of beef produced in the 70’s Carcass wt increased Increased cattle fed/feedlot Market age decreased Cross-breeding Imported cattle to finish in the U.S.

Cattle Production• Three phases:

Cow/calf – birth to 6-10 mos. Stocker-yearling – 600-850 lbs. Feedlot – 850+ lbs.

• Average market range – 15-24 mos.• Cow-Calf Production

33m head throughout country – most concentrated in high forage availability areas

60% of operations have <50 cows 70% of cattle inventory located on farms >100

cows Commercial and seed-stock producers

• Stocker-Yearling Production Grown for feedlot finishing programs Can take advantage of a variety of feeding

situations that might be cheaper, or even not available all year

• Feedlot Production Most fed harvested feeds (only 10-15% are

finished on pasture) Typically located near abundance of feed

Global Perspective• India leading country in total head (38m)• U.S. highest total fluid milk production• Butter, cheese, and dried milk are highest

total exports U.S.

• Average U.S. dairy ~ 100 cows, farm 2-300 acres, raise own forage, market through coops

• Average producer markets ~1.5 m lbs milk/yr, value ~$200,000

• Average total capital investment $500,000

70% of cows located on large operations (>100 cows)…2001 data

U.S. herd ~9m head – 1/3 of herd total 50 yrs ago

Average production 19,951 lbs/cow

Global Perspective• Domestication ~5,000 yrs ago• Purposes?• U.S. herd total ~5m (4th in the world), world

herd ~55m U.S. Perspective

• Rapid decline in the U.S. population coincided with development of vehicles and power equipment

• 3.5% of consumer expenditures for recreation spent in the horse industry

• Horse owners tend to be upper-middle class and well-educated

• Annual costs for maintaining a horse ranges from $1000 to $15000 per head Average costs:

Boarding - $150-$250/mo Training & riding lessons - $300-$600/mo and $20-

$50/hr Farrier service - $50-75

• Herd numbers increased steadily in 60’s and 70’s, declined rapidly in the 80’s Current herd population on the rise again

Global Perspective• China has largest herd, U.S. leads in total

production, Netherlands leader in total per capita consumption

• Fastest growing source of meat for consumption

U.S. Perspective• Income exceeds $21b/yr• Modernized poultry production began in the

1950’s• Integration became implemented heavily

from 1955-75

• Most poultry now raised on contract basis• Broiler production increased from 3.7m lbs

in 1960 to 36.5m lbs in 1996• Dramatic increases in egg production

1880 – 100 eggs/hen/yr 1950 – 175 eggs/hen/yr 1986 – 250 eggs/hen/yr 1997 – 255 eggs/hen/yr

• Majority of egg production from large, commercial units

• Turkey production has evolved from a primarily seasonal industry to year-round industry

• Export market became lucrative in 80’s and 90’s

Global Perspective• Originated in Europe and Northern Asia• Often graze different species of plants than

cattle, and can produce on lesser quality feeds

• World population nearly 1.1b in 2002 – highest on record

U.S. Perspective• Population declined from 56m in 1942 to 6.5m

in 2006• Mortality rates can be high

Global Perspective• 50% of world population in China

Leader in numbers and production• U.S. herd is more productive

U.S. Perspective• 2005 cash receipts ~$12b• Majority of production located near the corn

belt Why?

• Iowa ~25% of U.S. production• Number of farms greatly declined in last 20

yrs

• Increasing pressure from environmental and welfare concerns

• We’ll cover the various types of production operations in future units