4/1/2008. Animal Science 144 Beef Cattle & Sheep Production R. D. Sainz Lecture 01

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1 Beef cattle & sheep production Introduction Animal Science 144 Beef Cattle & Sheep Production R. D. Sainz Lecture 01 U.S. Cattle and Beef Industry The beef industry continues to be the largest single segment of American agriculture, and the largest industry in many states. The beef industry accounted for 20.3% of total U.S. cash receipts from farming with annual sales of $63.6 billion in The sheep industry accounted for 0.22% of total U.S. cash receipts from farming with annual sales of $0.5 billion in Total cattle numbers Jan. 1, 2006, were 97.1 million, down from 115 million in 1982; however, USDA figures show total beef tonnage produced has increased from slightly more than 22 billion pounds in 1982 to billion pounds in U.S. commercial slaughter 2002: million head (including 29.4 million steers and heifers and 5.76 million cull beef and dairy cows) 2003: million head (including 28.7 million steers and heifers and 6.1 million cull beef and dairy cows) 2004: million head (27 million steers and heifers and 5.2 million cull beef and dairy cows) 2005: million head (27 million steers and heifers and 4.86 million cull beef and dairy cows) 2006: million head (27 million steers and heifers and 5.43 million cull beef and dairy cows) 2007: 34.3 million head (27.9 million steers and heifers and 5.8 million cull beef and dairy cows) 1

2 U.S. beef production (commercial carcass weight): 2002: billion pounds 2003: billion pounds 2004: billion pounds 2005: billion pounds 2006: billion pounds Total U.S. beef consumption: 2002: 27.9 billion pounds 2003: 27.0 billion pounds 2004: 27.8 billion pounds 2005: 27.8 billion pounds 2006: 28.0 billion pounds 2007: 28.1 billion pounds U.S. Cattle and Beef Industry U.S. beef exports (commercial carcass weight and value): 2002: billion pounds, $2.629 billion, 9.0% of production 2003: billion pounds, $3.186 billion, 9.6% of production 2004: 460 million pounds, $631 million, 1.9% of production 2005: 697 million pounds, $1.031 billion, 2.8% of production 2006: billion pounds, $1.616 billion, 4.4% of production 2007: billion pounds, $2.175 billion U.S. Cattle and Beef Industry Retail equivalent value of U.S. beef industry: 2002: $60 billion 2003: $63 billion 2004: $70 billion 2005: $71 billion 2006: $71 billion 2007: $74 billion Value of U.S. cattle and calf production: 2002: $27.1 billion 2003: $32.1 billion 2004: $34.8 billion 2005: $36.6 billion 2006: $35.7 billion 2

3 Total U.S. consumer food expenditures in 2000 averaged $957.5 billion. Away-from-home meals and snacks captured 47.5 percent of the U.S. food dollar in 2000, up from 37 percent in In 2000, meat consumption totaled a record pounds per person, one-tenth pound more than the previous 1994 record and 28.7 pounds more than 1980 consumption. Compared to consumption in 1980, each American consumed an average of 11.6 pounds less red meat, but 41.1 pounds more poultry. Meat consumption in the US is increasing, but the increase has been entirely due to the growth of the poultry industries: Source: Iowa Farm Outlook, Econ. Info. 1928, Feb 16,

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6 Seedstock producers (120,000) Cow-calf operators (830, ,000 dairy) Stocker operators (???) Feedlots (1,780 > 1,000 hd) Packers (795) Retailers (128,000 stores) Consumers (6 billion) Beef production = cattle numbers x turn-off x carcass wt: 6

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14 Commercial cattle harvest by sex class. Source: Colorado State University. 14

15 Processing of carcasses into retail cuts has been centralized: The Big Five packers now process the majority (80%) of all beef in the US: Packer concentration % of total slaughter Year 15

16 Top US Beef Packers Ranked by Slaughter Capacity #1 IBP/Tyson #2 US Premium/ National Beef #3 Excel/Cargill #4 Swift #5 Smithfield Beef Group Headquarters Dakota Dunes, SD (Springdale, AR) Kansas City, MO Wichita, KS (Minneapolis, MN) Greeley, CO Smithfield, VA Ownership Publicly-held Privately-held Privately-held Publicly-held Publicly-held Annual Beef Sales in 2004 $17 billion $11.8 billion $9.5 billion $6 billion $2.4 billion Brands Thomas E. Wilson Certified Premium Beef, Black Canyon, Certified Black Angus Sterling Silver, AngusPride, Excel Ground Beef, Certified Angus Beef Armour, Swift, Miller Blue Ribbon, Monfort, Signature and Four Star Beef Steakhouse Classic Slaughter Facilities # Est. Daily Slaughter 36,000 head 10,000 head 28,850 head 20,850 head 8,000 head % of US Slaughter 28.6% 9.0% 22.5% 14.1% 5.5% Joint Ventures & Acquisitions IBP was purchased by TysonÃs in the 4 th quarter of fiscal Joint venture between Farmland Industries and US Premium Beef. This joint venture is not affected by Farmland IndustriesÌ filing for Chapter 11 bankruptcy. Entered a joint venture in 2002 with Hormel for case ready beef and pork. The name of the joint venture is Precept Foods, LLC. Excel acquired EmmpackÃs valueadded meat business in ConAgra is in the process of transferring 54% of its fresh beef and pork processing to a group led by Hicks, Muse, Tate & Furst Incorporated. The new venture will be operated under the name Swift & Company 22 full or partial acquisitions since 1980; 18 since Talks to purchase American Foods Group Inc. fell apart in December Source: JBS

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