Agriculture Livestock Production
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Industry Overview
The US livestock and poultry industry includes over one million farms with combined annual revenue of about $100 billion. Large companies like Tyson Foods and Smithfield Foods raise animals directly and also indirectly through their networks of contract farmers. Fewer than 10,000 farms hold more than 1,000 large animals, yet account for over 40 percent of industry revenue.
Competitive Landscape
Demand for food, hides, and animal byproducts is determined partly by domestic consumption and partly by export markets. The profitability of individual farms depends on efficient operations. Large farms have operational and marketing economies of scale. Small farms can compete effectively with larger ones by raising special breeds or supplying local markets.
Products, Operations & Technology
The largest revenue segments of the industry are cattle (about $62 billion); poultry and eggs ($24 billion); dairy products ($20 billion); and hogs ($11 billion). Other large segments include farmed fish ($1 billion); horses ($1 billion); and sheep and goats ($500 million).
Livestock and poultry operations for all types of animals are similar in that the farmer must breed animals, provide feed, maintain animal health, provide shelter, and dispose of animal wastes. Feed is the largest direct cost of raising animals. Farmers balance the cost of feed against its nutritional value; feed type can also affect the taste of meat. For animals raised quickly for slaughter, like cattle and chickens, feed formulations can be complicated. Corn and soybean meal are major feed ingredients. The feed efficiency rate measures how many pounds of feed are needed to increase the weight of the animal by one pound. Typically, the rate is 6 pounds of feed for beef cattle; 2.5 pounds for hogs; and 2 pounds for chickens. Instead of buying feed, farmers of cattle and sheep can graze their animals on rangeland. The average monthly grazing fee per head on leased private land in a recent year ran from $8 in Oklahoma to $20 in Nebraska.
The US cattle herd numbers about 96 million head. Steers (castrated males) comprise about 50 percent; heifers (young female cattle) 33 percent; cows (female breeders) 16 percent; and breeding bulls 2 percent. Angus, Hereford, and Limousine are the major US cattle breeds. Fewer than 6,000 farms have herds of 500 head or more. Cattle operations are of two main types: cow-calf and stocker cattle. In cow-calf operations, farmers maintain herds to produce offspring to increase herd size, and then sell excess cattle commercially. Stocker cattle operations buy young cattle, often steers, and raise them to be sold commercially. The annual slaughter rate of the US cattle herd usually is about one-third, currently over 30 million head. Cattle are typically on feed before slaughter: grain-fed (mainly corn) to produce a high grade of beef.
About 120,000 milk cow farms operate commercially, with a total of about 9 million milk cows, although most farms have fewer than 100 cows. Only 3,000 farms have more than 500 cows, but produce 40 percent of the industry's milk. Milk production is rising: the average cow produced 18,000 pounds of milk in 2000, up from 15,000 pounds annually a decade earlier.
The number of hog operations declined in recent years to 85,000 farms, as more-efficient, larger operations absorbed or displaced smaller ones. About two-thirds of US hog farms have fewer than 100 sows and together account for just 20 percent of industry revenue. The national hog herd consists of about 100 million animals. The slaughter rate of hogs is higher than for cattle.
The national sheep herd consists of about 9 million animals. Sheep, raised for both meat and wool, are farmed on large grazing lands, mainly in the mountains of the West.
Poultry is raised for egg production or as meat, on either traditional or commercial farms. Traditional farms, as a group, keep about 350 million chickens as layers for egg production, and raise 200 million chickens and 300 million turkeys for slaughter each year. The bulk of chicken raising, however, is on specialized commercial farms that produce 9 billion broilers per year. (See the profile "Poultry Processing.") Unlike larger animals, chickens mature quickly. Farmers can grow 5 to 6 flocks per year. Poultry farmers are particularly concerned about disease, which can spread through flocks very quickly.
As animals are raised in tightly concentrated areas, such as on industrial farms, disposal of animal wastes becomes a bigger problem. Chickens and dairy cows produce the largest amounts of manure per animal weight: 80 pounds per day per 1,000 pounds of animal weight. Beef cows and hogs produce about 65 pounds per day. Sheep excrete 40 pounds daily. Highly concentrated animal operations are subject to government regulation to prevent manure runoff into waterways.
Farmers purchase supplies and equipment that include feed, fencing, vaccines, animal branding and identification tools, and transport vehicles. Although larger producers have automated many processes, such as for milking cows or feeding animals, most farms still depend heavily on low-paid manual labor.