Background
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Cattle: Background
With its abundant grasslands and large grain supply, the United
States has developed a beef industry that is largely separate from
its dairy sector. With the world's largest fed-cattle industry, the
United States is also the world's largest producer of
beef--primarily high-quality, grain-fed beef for domestic and
export use. The industry is roughly divided into two production
sectors: cow-calf operations and cattle feeding.
Cattle Cycle
The cattle cycle refers to cyclical increases and decreases in
the cattle herd over time that arise because biological constraints
prevent producers from instantly responding to price. In general,
the cattle cycle is determined by the combined effects of cattle
prices; the time needed to breed, birth, and raise cattle to market
weight; and climatic conditions. If prices are expected to be high,
producers slowly build up their herd sizes; if prices are expected
to be low, producers reduce their herds. The cattle cycle averages
8-12 years in duration, the longest of all meat animals, but the
effects of persistent dry conditions on pastures and harvested
forage supplies can shorten or extend cycles.
Dry conditions that began in 1996 and persisted from 1998
through 2003 held down the retention of heifers until forage
conditions improved. By late 2003 and 2004, grazing conditions had
improved and ended a 9-year cyclical liquidation of cattle
inventories. This change, together with strong feeder calf prices,
began the process of herd expansion through the addition of heifers
and calves. The expansion lasted until 2007; then inventories began
declining because of increasing feed and energy prices. The
National Agricultural Statistics Service (NASS) provides
information on cattle numbers in semi-annual inventory
reports.
Cow-Calf Operations
Cow-calf operations are located throughout the United States,
typically on land not suited or needed for crop production. These
operations depend on range and pasture forage conditions, which in
turn depend on variations in the average rainfall and temperature
for the area. Beef cows harvest forage from grasslands to maintain
themselves and raise a calf with very little, if any, grain input.
The cow is maintained on pasture year round, as is the calf until
it is weaned. If additional forage is available at weaning, some
calves may be retained for additional grazing and growth until the
following spring when they are sold. The average beef cow herd is
40 head, but operations with 100 or more beef cows compose 9
percent of all beef operations and 51 percent of the beef cow
inventory. Operations with 40 or fewer head are largely part of
multi-enterprises, or are supplemental to off-farm employment.
Cattle Feedlots
Cattle feeding is concentrated in the Great Plains, but is also
important in parts of the Corn Belt, Southwest, and Pacific
Northwest. Cattle feedlots produce high-quality beef, grade Select
or higher, by feeding grain and other concentrates for about 140
days. Depending on weight at placement, feeding conditions, and
desired finish, the feeding period can be from 90 to as long as 300
days. Average gain is 2.5-4 pounds per day on about 6 pounds of
dry-weight feed per pound of gain. While most of a calf's nutrient
inputs until it is weaned are from grass, feedlot rations are
generally 70- to 90-percent grain and protein concentrates.
Feedlots with less than 1,000 head of capacity compose the vast
majority of U.S. feedlots, but market a relatively small share of
fed cattle. In contrast, lots with 1,000 head or more of capacity
compose less than 5 percent of total feedlots, but market 80- to
90-percent of fed cattle. Feedlots with 32,000 head or more of
capacity market around 40-percent of fed cattle. The industry
continues to shift toward a small number of very large specialized
feedlots, which are increasingly vertically integrated with the
cow-calf and processing sectors to produce high-quality fed beef.
NASS provides monthly Cattle on Feed reports.