Unit 1: Overview of the L ivestock & Poultry industries

1. Unit 1: Overview of the Livestock & Poultry industries Chapter 2

2. Objectives Role & impact of U.S. livestock industry International trade influences on animal agriculture industry Overviews of animal livestock industries

3. U.S. Animal Industries - Overview • 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

5. Cash Receipts Cash receipts from livestock products comprise 51% of all agricultural sales 22 states have cash receipts >$2b

7. World Trade Refer to table 2.3 Notice animal agriculture is positive – others are negative Much is driven by cattle hides, beef, fat/tallow, dairy

8. Commodity Prices • 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

10. The Beef Industry • 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

11. The Beef Industry • 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.

12. The Beef Industry • 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

13. The Beef Industry • 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

15. The Dairy Industry • 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

16. The Dairy Industry • 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

19. The Horse Industry • 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

20. The Horse Industry • 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

21. The Poultry Industry • 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

22. The Poultry Industry • 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

23. The Poultry Industry • Turkey production has evolved from a primarily seasonal industry to year-round industry • Export market became lucrative in 80’s and 90’s

24. The Sheep & Goat Industry • 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

25. The Swine Industry • 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

27. Figure 2.22 Pork production versus breeding hog inventory. Source: Livestock Marketing Information Center.

28. Figure 2.23 Average hog production costs in the United States. Source: USDA (Cost of Production–Livestock and Dairy, 1990).

29. The Swine Industry • Increasing pressure from environmental and welfare concerns • We’ll cover the various types of production operations in future units