National Beef Month: The Importance of the Beef Cattle Industry: Ranch Loans
A Look at the Vital Role Beef Producers Play in Keeping American Families Fed and the U.S. Economy Secure.
From the farmers and ranchers to the processors, thousands of Americans play an integral role in the journey of beef from the field to the market, and to honor all those involved in the process, we’re providing a deeper look into America’s food-supply chain for beef cattle.
Contents:
- Cattle Producers’ Major Contribution to the U.S. Economy
- The Beef Industry’s Four Major Cattle Operations
- Beef Industry Facts, Stats, and Developments
Cattle Producers’ Major Contribution to the U.S. Economy
Cattle production is easily among the most important agriculture industries in the U.S., totaling 94.8 million head of cattle at the start of 2019. The U.S increased beef exports more than 10 percent from 2017 to 2018, resulting in 3.2 billion pounds.
The top five export markets for the U.S. include:
- Japan
- South Korea
- Mexico
- Hong Kong
- Canada
U.S. beef cattle also represent one of the largest single segments of American agriculture with over 900,000 cattle and calf operations across our nation. According to the USDA, cattle production makes up an estimated 18 percent of cash receipts from agricultural commodities.
The Beef Industry’s Four Major Cattle Operations
Because beef has the “most unique and complex lifecycle of any food”, it includes a variety of segments, including several changes in ownership between the time cattle are weaned and slaughtered. It explains why it takes two to three years to bring beef from farm to fork. The four major segments of the beef cattle industry include,
- Seedstock production;
- Cow-calf production;
- Stocker/backgrounding; and
- Feedlot.
Seedstock Production
Seedstock operations primarily produce bulls that are used to service cows in commercial cow-calf operations. The primary products of cow-calf operations are weaned cows, which are then sold to stocker operators, backgrounding lots, or feedlots.
Cow-Calf Production
Calves from cow-calf operations can follow one of two paths. One path includes being transferred directly to feedlots at or around the time of weaning. These are called “calf-feds” and stay in the feedlot for 240 days or more before being harvested. Calf-feds make up approximately 40 percent of the fed cattle population in the U.S. The other path they may head is into a backgrounding or stocker operation, or a combination thereof, to be grown on a forage-based diet before fattened on a high-concentrate diet.
Stocker or Backgrounding
It’s also important to note that male calves from dairies constitute a significant component of the beef cattle market. These calves are acquired from dairies when they’re about three days old, after which they are transferred to calf ranches. Once they reach a weight of approximately 330 to 440 pounds, they’re commonly sold to feedlots.
Feedlot Cattle
Cull beef and dairy animals contribute to the beef supply as well, and they’re typically shipped from seedstock, cow-calf, or dairy operations directly to abattoirs for harvest, although a relatively small and variable proportion is sent to feedlots to be fed high-energy diets for 50 to 100 days before being slaughtered.
While the beef cattle production industry is multi-segmented and involves a wide variety of individuals and businesses, the U.S. beef slaughter industry is heavily concentrated. In fact, four companies account for more than 80 percent of the beef slaughter capacity, which has come to light as a result of recent events and closures in response to the COVID-19 pandemic.
Beef Industry Facts, Stats, and Developments
According to the National Cattlemen’s Beef Association, the U.S. lays claim to 913,246 total cattle and calf operations, with 727,906 of those being beef farms and ranches, and 91 percent of those are family-owned or individually-operated.
Top States that Contribute to U.S. Beef Industry
Overall, the nation comprises 31.8 million beef cattle—a one percent increase from 2018—with the top cattle states including:
- Texas – 13 million cattle
- Nebraska – 6.8 million cattle
- Kansas – 6.4 million cattle
- California – 5.2 million cattle
- Oklahoma – 5.3 million cattle
Texas is the top producer of beef in the U.S., and the state is home to 13 million cattle. Approximately 4.7 million of Texas’ cattle are used for beef, which accounts for more than 13 percent of the beef cows in the nation.
Oklahoma has the second largest number of beef cattle, at 2.2 million or just over 40 percent of their total cattle count. While in Nebraska, over 28 percent of the 6.8 million cattle in the state are raised for beef. There are over 20,000 beef cow operations and the industry has a $12.1 billion impact on Nebraska’s economy.
Despite these major contributions, the beef export market has seen a slight decline in 2019, averaging $309.25 per head of fed slaughter (a four percent decline from 2018). Exports in 2019 accounted for 14.1 percent of total U.S. beef production (down from 14.6 percent in 2018).
Challenges Ahead for Beef Producers in 2020
A topic of concern in the beef production industry for 2020 is the U.S. Beef Integrity Act, a bill that modified labeling requirements to prohibit meat food products from bearing the phrase Product of U.S.A. unless it is exclusively born, raised, and slaughtered in the U.S.
The price gap between cattle and retail beef prices has also come to the forefront of discussion with the emergence of COVID-19 and its impact on the meat supply chain. Major meat processing plants are under investigation by the Department of Justice for possible price manipulation within the industry. While beef cattle are raised in all 50 states of the U.S., some state economies are more heavily impacted by beef prices than others.
Flexible Farm Loans for Ranchers and Beef Cattle Operations
AgAmerica is proud to support the U.S. cattle ranchers who ensure our nation’s food supply and keep our families fed. If you need assistance or would like to learn what resources and ranch loans are available to help your operation, contact a Relationship Manager today.
