Questions & Answers
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Q. What is meant
by the phrase "animal products?"
A. Animal products include meat and other
products derived from animals, such as eggs; dairy products, such
as milk, whey, butter, and cheese; and byproducts, such as hides
and fat. Some products--for example, fats, whey and other proteins,
blood, and bones--are used in manufacturing 1) health products such
as soaps, toothpaste, and surgical sutures; 2) pharmaceutical
products such as caplet and pill fillers and binders; and 3)
industrial products such as glue, lubricants, fertilizers, and
plastics. Meat animals include cattle, hogs, chickens, turkeys,
sheep, game birds, and fish.
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Q. What is the
value of U.S. production of beef, pork, dairy, and
poultry?
A. Total farm cash receipts from livestock are
estimated to have surpassed $115 billion annually since 2004, with
beef, poultry, dairy, and pork representing over 90 percent of this
value. Among the four product types, the value of beef production
(including cull cows and steer calves from dairy herds) accounts
for the largest share. Annual cash receipts from broiler, turkey,
and egg production represent the second-largest animal product
sector, while dairy production is the third-largest sector.
Receipts from hog production represent the fourth-largest sector.
Other livestock and animal products--including sheep and lambs,
wool, goats and mohair, and aquaculture products--produce farm cash
receipts representing less than 5 percent of the total value of
animal products.
Consumer preferences have given chicken a growing market share
for many years now. Beef and hog production is influenced by
biological lags as producers respond to market prices. These
"cycles" are not evident in broiler and turkey production because
of the relatively short time required to bring new animals to
slaughter, compared with hog and cattle production which take
several months or years. For more information, see U.S. Beef Industry: Cattle
Cycles, Price Spreads, and Packer Concentration, which
identifies both similarities and differences between the cattle
cycle of the 1990s and previous cycles.
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Q. What are the
USDA grades of meat?
A. USDA has quality grades for beef, veal,
lamb, yearling mutton, and mutton. Although USDA quality grades
exist for pork, these do not carry through to the retail level as
do the grades for other kinds of meat.
For beef, 
USDA Prime, Choice, Select, and Standard grades come from younger
beef. The highest grade, USDA Prime, has abundant marbling--flecks
of fat within the lean muscle--that enhances both flavor and
juiciness. Prime beef is used mostly by hotels and restaurants, but
a small amount is sold at retail. The grade most widely sold at
retail is USDA Choice, which has slightly less marbling but is of
very high quality. Consumer preference for leaner beef, however,
has increased the popularity of the Select grade. Select beef can
now be found at most retail meat counters. Standard and Commercial
grade beef frequently is sold as ungraded or as "brand name" meat.
The three lower grades--USDA Utility, Cutter, and Canner--are
seldom, if ever, sold at retail but are used instead to make ground
beef and manufactured meat items such as frankfurters. The
standards for veal are
similar to those for beef.
Lamb and mutton have
Prime and Choice grades similar to those for beef. Lower grades of
lamb and mutton (USDA Good, Utility, and Cull) are seldom marked
with the grade if sold at retail.
Pork, like lamb, is generally produced from young animals and
is, therefore, less variable in tenderness than beef. Because of
this consistency, USDA grades for pork reflect only two levels of quality,
Acceptable and Unacceptable. Acceptable quality pork is also graded
for yield (i.e., the ratio of lean to waste), as are beef, lamb,
and mutton. Unacceptable quality pork, which includes meat that is
soft and watery, is graded U.S. Utility. More information about
meat grades is available in a USDA fact sheet on How to Buy Meat.
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Q. What
percentage do producers receive as a share of the total retail
value of meat?
A. Price spreads are one of the
measures ERS uses to describe the allocation of the consumer
dollar among the various stages of the food marketing chain. The
farm share of retail prices has been decreasing for most
agricultural commodities and reflects both greater production
efficiency in agriculture and rising marketing costs. During the
1990s, the share of the retail price received by beef producers
declined from roughly 60 percent to 45 percent and for pork
producers from around 45 percent to 25-35 percent. During 2000-07,
farmers' share for beef has fluctuated between 40 and 55 percent
and for pork between 20 and 40 percent. ERS regularly calculates
and posts information on
Meat Price
Spreads.
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Q. How
concentrated has livestock production become?
A. Market concentration (the share of the
market controlled by the largest firms) varies widely across the
cattle, hog, dairy, and poultry industries. In the case of beef,
concentration also varies across the stages of production, with
cow-calf operations being the least concentrated. Beef operations
with herds of fewer than 100 beef cows represent the majority of
U.S. beef operations and account for nearly half of U.S. beef cows.
The cattle feeding industry, in contrast, is much more
concentrated. Feedlots with a capacity of 1,000 head or more
comprise a tiny fraction of total U.S. feedlots, but market the
vast majority of fed cattle.
Dairy production still has a significant number of small
producers, as most producers still run operations with fewer than
100 cows. However, there is a trend toward larger herds,
particularly in the Western United States. Operations with more
than 500 cows represent a very small fraction of total dairy
producers, but account for more than half of all milk cows and milk
production.
Hog production has become much more concentrated in the last two
decades, as the number of hog operations has decreased by
two-thirds since the late 1980s and early 1990s. More than 80
percent of hog operations now have fewer than 1,000 head, but this
group accounts for only about 10 percent of total hog inventories.
Operations with at least 5,000 head represent less than 5 percent
of all producers but more than half of total U.S. inventories. The
majority of hogs today are sold through production contracts, under
which a processor provides the pigs and feed and a contracting
producer provides facilities and labor.
Poultry production, particularly broiler production, became more
concentrated decades ago. Production contracts--where a contractor
(typically, a poultry processor) provides the chicks and feed and
the grower provides facilities and labor--has been the dominant
form of broiler production since the mid-1950s. In 1955, 85 percent
of broilers were produced under production contracts. The share is
much the same in the 2000s. Production contracts are also
significant for turkey and egg production, but vertical integration
(where the processor handles production from start to finish) is
more common, particularly in egg production.