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Chapter 2
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Role & impact of U.S. livestock industry
International trade influences on animal agriculture industry
Overviews of animal livestock industries
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Historically – most farms very diversified• How so?• How is it different today?
U.S. – 283 million consumers – plus demand in the international market = high output demand from U.S. livestock producers
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Cash receipts from livestock products comprise 51% of all agricultural sales
22 states have cash receipts >$2b
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Refer to table 2.3 Notice animal agriculture is positive –
others are negative Much is driven by cattle hides, beef,
fat/tallow, dairy
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Volatility in the market has had significant impact on farm-gate profits• Not only U.S. supply/demand dynamics…but
international• If you are to be profitable long-term – know
the averages for your commodity, and understand how to ride the highs/lows
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Global Perspective• Cattle domesticated in Asia & Europe• Provide: food, fiber, fuel, power• What is our main use of cattle?
How about a developing country?• 30 yr trend increasing cattle numbers
Greater demand for beef Increased export demand
• U.S. - largest producer• India – most cattle• Uruguay & Argentina – highest per capita
consumption
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U.S.• Comprised of producing, processing,
consuming segments• Currently takes ~30m less head of cattle to
produce same amount of beef produced in the 70’s Carcass wt increased Increased cattle fed/feedlot Market age decreased Cross-breeding Imported cattle to finish in the U.S.
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Cattle Production• Three phases:
Cow/calf – birth to 6-10 mos. Stocker-yearling – 600-850 lbs. Feedlot – 850+ lbs.
• Average market range – 15-24 mos.• Cow-Calf Production
33m head throughout country – most concentrated in high forage availability areas
60% of operations have <50 cows 70% of cattle inventory located on farms >100
cows Commercial and seed-stock producers
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• Stocker-Yearling Production Grown for feedlot finishing programs Can take advantage of a variety of feeding
situations that might be cheaper, or even not available all year
• Feedlot Production Most fed harvested feeds (only 10-15% are
finished on pasture) Typically located near abundance of feed
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Global Perspective• India leading country in total head (38m)• U.S. highest total fluid milk production• Butter, cheese, and dried milk are highest
total exports U.S.
• Average U.S. dairy ~ 100 cows, farm 2-300 acres, raise own forage, market through coops
• Average producer markets ~1.5 m lbs milk/yr, value ~$200,000
• Average total capital investment $500,000
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70% of cows located on large operations (>100 cows)…2001 data
U.S. herd ~9m head – 1/3 of herd total 50 yrs ago
Average production 19,951 lbs/cow
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Global Perspective• Domestication ~5,000 yrs ago• Purposes?• U.S. herd total ~5m (4th in the world), world
herd ~55m U.S. Perspective
• Rapid decline in the U.S. population coincided with development of vehicles and power equipment
• 3.5% of consumer expenditures for recreation spent in the horse industry
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• Horse owners tend to be upper-middle class and well-educated
• Annual costs for maintaining a horse ranges from $1000 to $15000 per head Average costs:
Boarding - $150-$250/mo Training & riding lessons - $300-$600/mo and $20-
$50/hr Farrier service - $50-75
• Herd numbers increased steadily in 60’s and 70’s, declined rapidly in the 80’s Current herd population on the rise again
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Global Perspective• China has largest herd, U.S. leads in total
production, Netherlands leader in total per capita consumption
• Fastest growing source of meat for consumption
U.S. Perspective• Income exceeds $21b/yr• Modernized poultry production began in the
1950’s• Integration became implemented heavily
from 1955-75
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• Most poultry now raised on contract basis• Broiler production increased from 3.7m lbs
in 1960 to 36.5m lbs in 1996• Dramatic increases in egg production
1880 – 100 eggs/hen/yr 1950 – 175 eggs/hen/yr 1986 – 250 eggs/hen/yr 1997 – 255 eggs/hen/yr
• Majority of egg production from large, commercial units
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• Turkey production has evolved from a primarily seasonal industry to year-round industry
• Export market became lucrative in 80’s and 90’s
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Global Perspective• Originated in Europe and Northern Asia• Often graze different species of plants than
cattle, and can produce on lesser quality feeds
• World population nearly 1.1b in 2002 – highest on record
U.S. Perspective• Population declined from 56m in 1942 to 6.5m
in 2006• Mortality rates can be high
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Global Perspective• 50% of world population in China
Leader in numbers and production• U.S. herd is more productive
U.S. Perspective• 2005 cash receipts ~$12b• Majority of production located near the corn
belt Why?
• Iowa ~25% of U.S. production• Number of farms greatly declined in last 20
yrs
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• Increasing pressure from environmental and welfare concerns
• We’ll cover the various types of production operations in future units