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Livestock, Dairy and Poultry
Outlook provides a monthly analysis of current developments
in the livestock and poultry industry, providing data
on animal numbers, meat and egg production, prices, trade,
and net returns. Pork is a featured commodity in January,
April, July, and October.
The Changing Economics of U.S. Hog Production (December 2007) documents the increasing size and specialization of U.S. hog operations during the last 15 years. Large operations that specialize in a single production phase and produce under contract have replaced traditional farrow-to-finish operations. These structural changes have coincided with substantial gains in efficiency and lower production costs, most of which are attributed to increases in scale of production and technological innovation. For an Amber Waves article on this topic, see Technology, Larger Farm Size Increased Productivity on U.S. Hog Farms (April 2008).
Characteristics and Production Costs of U.S. Hog Farms, 2004 (December 2007) describes an industry characterized by wide variation in the type, size, and economic performance of operations during 2004. Operations specializing in a single production phase generated more than three times the product value, on average, of those using the farrow-to-finish approach. Small and medium hog operations far outnumbered large and very large operations, but the latter accounted for most of the hog production.
Animal Products
Markets in 2005 and Forecasts for 2006 (September 2006) looks at how
uncertainty continues to shape the forecasts for animal
products markets and trade in 2006. Potential and actual
animal disease outbreaks, consumer sensitivities, volatile
exchange rates, and growing competition from producers
in other countries cloud U.S. trade prospects for major
meats.
Economic
Effects of Animal Diseases Linked to Trade Dependency
(April 2006) highlights the importance of livestock and poultry trade
to producers and consumers around the world. Though global
meat trade has not fallen in response to animal disease
outbreaks, a few countries have seen significant changes
to their exports and imports. For more information, see
Disease-Related
Trade Restrictions Shaped Animal Product Markets in 2004
and Stamp Imprints on 2005 Forecasts (August 2005) and Brazil
Emerges as Major Force in Global Meat Markets (April 2006).
Did the
Mandatory Requirement Aid the Market? Impact of the Livestock
Mandatory Reporting Act (September 2005) compares the mandatory price
reporting system developed by USDA's Agricultural Marketing
Service in 2001 with the previous voluntary reporting
system. The trend toward formula purchases has slowed
since mandatory price reporting was implemented, and market
forces have likely contributed to an increase in the volume
of cattle moving under negotiated purchases.
Market Integration
of the North American Animal Products Complex (May 2005) examines
the economic integration of the beef, pork, and poultry
industries of Mexico, Canada, and the United States over
the past two decades. Sanitary barriers, which are designed
to protect people and animals from diseases, are some
of the most significant barriers to fuller integration
of meat and animal markets. For more information on integration,
see North
America Moves Toward One Market (June 2005).
Factors
Affecting U.S. Pork Consumption (May 2005) analyzes pork consumption
across different U.S. market channels, geographic regions,
and population groups. Pork ranks third in annual U.S.
meat consumption, behind beef and chicken, averaging 51
pounds per person. Most pork is consumed at home, and
rural individuals eat more than their urban/suburban counterparts.
Pork consumption also varies by race, ethnicity, and income
level.
Market Integration in the North American Hog Industries (November 2004) reports that
about 8 percent of the hogs slaughtered in the United
States in 2004 will originate in Canada, many more than
10 years ago. Canadian hogs have flowed into the United
States in response to significant structural changes in
the U.S. pork industry, policy changes in Canada, and
a strong U.S./Canadian dollar exchange rate. For an Amber
Waves article on this topic, see U.S.-Canadian
Hog Trade: Market Integration at Work (February 2005).
Pork Quality and the
Role of Market Organization (November 2004) addresses changes in the
organization of the U.S. pork industry, most notably marketing
contracts between packers and producers, by exploring
their function in addressing pork-quality concerns. Organizational
arrangements can facilitate industry efforts to address
pork quality needs by reducing measuring costs, controlling
quality attributes that are difficult to measure, facilitating
adaptations to changing quality standards, and reducing
transaction costs associated with relationship-specific
investments in branding programs.
Contracts, Markets, and
Prices: Organizing the Production and Use of Agricultural
Commodities (November 2004) reports that contracts are now the primary
method of handling sales of many livestock commodities,
including milk, hogs, and broilers, and of major crops
such as sugar beets, fruit, and processing tomatoes. Production
and marketing contracts governed 36 percent of the value
of U.S. agricultural production in 2001, up from 12 percent
in 1969.
Beef and
Pork Values and Prices Spreads Explained (May 2004) examines
how marketing costs affect livestock and meat prices in
the short and long run. Slow price adjustment explains
most of the month-to-month changes in beef and pork price
spreads.
Savvy
Buyers Spur Food Safety Innovations in Meat Processing (April 2004)
finds that the market incentives that motivate private
firms to invest in food safety innovation seem to be fairly
weak. Results from an ERS survey of U.S. meat and poultry
slaughter and processing plants and two case studies of
innovation in the U.S. beef industry reveal development
of a number of mechanisms to overcome that weakness and
to stimulate investment in food safety innovation. For
the full report, see Food
Safety Innovation in the United States: Evidence from
the Meat Industry (April 2004).
Food
Traceability: One Ingredient in a Safe and Efficient Food
Supply (April 2004) describes the results of an investigation into
the amount, type, and adequacy of traceability systems
in the United States, focusing on the cattle/beef, fresh
produce, and grain sectors. The investigation finds that
these systems vary across industries as firms balance
the private costs and benefits to determine the efficient
level of traceability. For the full report, see Traceability
in the U.S. Food Supply: Economic Theory and Industry
Studies (March 2004).
Country-of-Origin
Labeling: Theory and Observation (January 2004) examines the economic
rationale behind the various claims about the effect of
country-of-origin labeling and indicates that mandatory
country-of-origin labeling would likely generate more
costs than benefits. Voluntary country-of-origin labeling
is an option, but food suppliers have generally discounted
the U.S. label as a quality attribute that can attract
sufficient consumer interest.
Many factors determine the Structure
of the Global Markets for Meat (September 2003), including the relative
availability of resources for raising and processing animals
for meat. Preferences for various cuts of meat among countries
provide opportunities for international trade.
Interstate
Livestock Movements (June 2003) analyzes livestock marketing patterns.
As part of the overall meat production system, livestock
movements affect profits for livestock owners, what consumers
pay at the supermarket and restaurant, and potential for
spread of animal diseases.
Manure Management for
Water Quality (June 2003) evaluates the costs of spreading manure
on cropland at the farm, regional, and national levels.
EPA regulations enacted in February 2003 require concentrated
animal feeding operations (generally the largest producers
of hogs, chicken, dairy, and beef cattle) to meet nutrient
application standards when spreading their manure on cropland
in order to preserve water resources from nitrogen and
phosphorus runoff. USDA is encouraging all animal feeding
operations to do the same. If all operations meet the
new standards, increases in production costs could be
felt throughout the food and agricultural system.
Pork Policies
in Japan (March 2003) provides a detailed description and analysis
of policies used by Japan to support its hog producers
and to regulate pork markets. Regional deficiency payment
programs compensate for price declines, with support from
the national government. At the border, a low ad valorem
tariff and the gate price system apply to pork imports.
Economic and Structural
Relationships in U.S. Hog Production (February 2003) describes an
industry becoming increasingly concentrated among fewer
and larger farms, and becoming more economically efficient.
Of paramount concern are increasing market control and
power concentrated among packers and large hog operations,
and the manure management problem posed by an increasing
concentration of hog manure on fewer operations.
Controversies
in Livestock Pricing (December 2002) discusses the effect on producer
prices resulting from changes in industry structure and
pricing methods.
Environmental
Regulation and Location of Hog Production (September 2000) analyzes
the links between the stringency of environmental regulation
and the location of hog production.
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