Dean Foods Company Business Reports

Demand for meat, poultry, and dairy products is driven by domestic food consumption trends. The profitability of individual farms depends on efficient operations. Large companies have advantages in vertically integrated operations and economies of scale. Small operations can compete effectively by supplying local markets, specializing in heritage breeds, or raising humanely treated or hormone-free animals. The industry is capital-intensive: average annual revenue per worker is about $700,000. Live animal and meat exports total about $16 billion, about 10 percent of total industry revenue. The US is a net exporter of chicken, pork, and beef. US broiler exports total over $3 billion. Major trading partners include China and Mexico. Japan accounts for one-third of the $4 billion pork export market; other major pork trading partners include Mexico and Canada. Beef and veal exports are valued at $3 billion, led by trade with Mexico and Canada. US imports of live cattle and beef total about $4 billion. Live cattle are imported from Canada and Mexico. Beef imports are mostly from Australia, Canada, and New Zealand. Around 6 million live hogs from Canada are imported annually into the US. Although the US has the largest fed-cattle industry in the world, from 2003 to 2007 the US was a net importer of beef. The discovery of bovine spongiform encephalopathy (BSE) in cattle imports from the US drastically reduced US beef exports. The US regained its status as a net beef exporter in 2008, however potential spread of BSE continually threatens US trade of beef and cattle.