Beef Cattle Ranching
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Industry Overview
The US beef ranching industry includes about 750,000 operators with combined annual revenue of $50 billion. Only about 5,000 operations have more than 500 head of cattle. The industry is highly fragmented: the 50 largest operators hold less than 2 percent of the market.
Competitive Landscape
Demand is driven by food prices, population growth, and global trade policies. The profitability of individual operations depends on production efficiency and anticipating market demand. Large operators have some advantages in volume purchasing and efficient use of labor. Small operators can compete successfully by producing special grades of beef cattle and by using "family" labor.
Products, Operations & Technology
Major products are beef cattle and calves ready to be slaughtered or ready for "finishing" in feedlots. Annual US sales of beef animals include about 45 million cattle and 10 million calves.
The operations of beef ranchers revolve around breeding cows, feeding cattle, and providing veterinary care. Beef cattle ranchers mainly breed their own animals, with a traditional calving season in the early spring. Cows can produce one calf per year and are either naturally bred by a bull or artificially inseminated by a technician. Beef cows have a nine month gestation period. From birth until weaning, calves depend on their mother's milk and forage resources. Calves are typically weaned when they weigh between 400 and 600 pounds and are either retained by the rancher or sold. Weaned calves either go directly to the feedlot for finishing or are fed a high forage diet. Generally calves enter the “feedlot” phase, where they're transitioned to a high grain ration, at around 800 pounds. Cattle are typically ready for slaughter when they weigh around 1,200 pounds and have been fed a grain-based ration for at least 120 days.
Because the quality of the forage on grazing land varies widely, the animal carrying capacity of land also varies. The actual stocking rate on land is the number of acres per animal unit (typically a cow-calf pair), or the number of 1,000-pound animal units per month (AUM) on a particular piece of land. Depending on the quality of the forage, a beef cow may need from three acres in high-rainfall areas to 40 in arid regions. A higher than recommended stocking rate may reduce the live-weight gain per animal per day, which is typically between 1 and 2 pounds. Ranches often rotate their animals through a number of pastures to prevent overgrazing and soil erosion in any one spot during grazing season. Ranchers may produce or buy harvested forage (typically hay) to feed their cattle during the winter months.
Veterinary services are needed to help in calving problems, treat illnesses, and provide routine vaccinations to prevent diseases, especially communicable ones. About 4 million cattle and calves are lost every year to injury or disease. Bovine spongiform encephalitis (BSE), otherwise known as mad cow disease, can be transmitted by eating meat or byproducts from an infected animal.
Although most ranchers raise cattle on their own land, some may lease private land or have permits to use federal lands. The federal grazing fee for a cow-calf animal unit per month (AUM) is determined annually by the Bureau of Land Management and the Forest Service, and has in recent years been just under $2 per month. Federal grazing permits are tied to a rancher's “deeded” land and are transferable upon the sale of deeded land. Often, deeded and federal lands are intermingled on a ranch: rarely is it possible for a rancher to operate entirely on federal lands.
Computer technology to identify animals from birth to slaughter has increased in recent years due to concerns about product traceability and for herd management. Radio frequency identification (RFID) ear tags attached at birth allow animals to be monitored remotely in the field and as they pass to feedlots or slaughterhouses. Most ranchers also use the Internet to monitor cattle prices and get production information.