How Retail Beef and Bread Prices Respond to Changes in Ingredient and Input Costs (ERR-112, February 2011).The extent to which cost changes pass through a vertically organized production process depends on the value added by each producer in the chain as well as a number of other organizational and marketing factors at each stage of production. Using 36 years of monthly Bureau of Labor Statistics price indices data (1972-2008), we model passthrough behavior for beef and bread, two retail food items with different levels of processing. Both the farm-to-wholesale and wholesale-to-retail price responses are modeled to allow for the presence of structural breaks in the underlying long-term relationships between price series. Broad differences in price behavior are found not only between food categories (retail beef prices respond more to farm-price changes than do retail bread prices), but also across stages in the supply chain. While farm-to-wholesale relationships generally appear to be symmetric, retail prices have a more complicated response behavior. For both bread and beef, the passthrough from wholesale to retail is weaker than that from farm to wholesale.
Grain Prices Impact Entire Livestock Production Cycle (Amber Waves, March 2009). Changes in input costs such as feed prices have varying effects on production decisions in the livestock and poultry sectors due to the different timeframes needed to breed, raise, and slaughter cattle, hogs, and poultry.
Lasting Influence of BSE on U.S. Protein Feed Markets (Amber Waves, November 2008). The risks associated with bovine spongiform encephalopathy (BSE) among cattle—or to people in its human form, variant Creutzfeldt-Jakob disease (vCJD)— have impacted trust of consumers and trading partners in the Nation’s food supply the, leading policymakers to impose regulatory responses to the potential threats. A recent ERS study of a series of BSE/vCJD risk- reduction initiatives examines the cost of these policies, which have progressively limited the use of animal byproducts and have put restrictions on products by the cosmetic, pharmaceutical, and feed-manufacturing industries.
Economic Impacts of Foreign Animal Disease (ERR-57, May 2008).As more is learned about the impacts of foreign animal-disease outbreaks, questions arise regarding the efficacy of existing animal disease-impact models for capturing the array of effects across many economic sectors and time. Previous models lacked adequate treatment of either the economic components or the epidemiological components, and, in some cases, both. This report presents a quarterly livestock and crop modeling framework in which epidemiological model results are integrated with an economic model of the U.S. agricultural sector to estimate the economic impacts of outbreaks of foreign-source livestock diseases. The framework can be applied to many livestock diseases and this study uses the model to assess the results of a hypothetical outbreak of foot-and-mouth disease (FMD). Model results show large trade-related losses for beef, beef cattle, hogs, and pork, even though relatively few animals are destroyed. The best control strategies prove to be those that reduce the duration of the outbreak.
Did BSE Announcements Reduce Beef Purchases? (ERR-34, December 2006).This study examines consumers' retail purchases of beef and beef products for evidence of a response to the 2003 U.S. Government announcements of finding cows infected with Bovine Spongiform Encephalopathy (BSE). We constructed weekly estimates of quantities of beef products consumers purchased from 1998 through 2004, using ACNielsen Homescan data. While the variance in purchases was large, most could be explained by trend and seasonality. Deviations from established purchase patterns following the BSE announcements varied across beef products, but were limited to no more than 2 weeks in all cases.
Animal Products Markets in 2005 and Forecasts for 2006 (LDPM-146-01, September 2006). Uncertainty continues to shape the forecasts for animal products markets in 2006. Potential and actual animal disease outbreaks, consumer sensitivities, volatile exchange rates, and growing competition from producers in other countries cloud U.S. trade prospects for major meats. Loss of U.S. trade market share, partly caused by disease outbreaks and related trade restrictions that have affected animal product exports since 2003, compounds the problem. The outlook for U.S. meat, poultry, and dairy markets in 2006 depends on how well domestic production adjusts to changes in input costs, the effect of exchange rates on trade, the continuing effects of disease and trade restrictions on exports, and the increasing competitiveness of emerging animal products exporters.
Factors Affecting U.S. Beef Consumption (LDPM-135-02, October 2005). Beef is a highly consumed meat in the United States, averaging 67 pounds per person per year. Findings based on the 1994-96 and 1998 Continuing Survey of Food Intakes by Individuals (CSFII) indicate that most beef was eaten at home. Annual beef consumption per person was highest in the Midwest (73 pounds), followed by the South and West (65 pounds each), and the Northeast (63 pounds). Rural consumers ate more beef (75 pounds) than did urban and suburban consumers (66 and 63 pounds). Beef consumption also varies by race and ethnicity. Blacks ate 77 pounds of beef per person per year, followed by 69 pounds by Hispanics, 65 pounds by Whites, and 62 pounds by other races. Low-income consumers tend to eat more beef than do consumers in higher income households.
Did the Mandatory Requirement Aid the Market? Impact of the Livestock Mandatory Reporting Act (LDPM-135-01, September 2005). This study focuses on fed cattle markets to compare the mandatory price reporting system developed by USDA’s Agricultural Marketing Service in 2001 with the previous voluntary reporting system. The study evaluates whether the mandatory system has improved the amount and quality of information available to the market. We find that prices received with formula purchasing arrangements, which were not comprehensively reported under the voluntary system, appear to closely match prices received with negotiated purchases. The trend toward formula purchases has slowed since mandatory price reporting was implemented, and the volume of cattle moving under negotiated purchases has increased. Futures prices did not seem to respond to prices under mandatory reporting; however, the mandatory data seem to better represent market conditions. Other market factors such as cyclically low cattle inventories and the discovery of BSE in North America may have influenced the shift back to negotiated cash transactions.
North America Moves Toward One Market (Amber Waves, June 2005). The agricultural economies of Canada, Mexico, and the United States are increasingly behaving as if they form one market. Structural changes within agriculture have also facilitated integration, which has boosted consumer demand and forced new economic arrangements within the agricultural and processed food industries.
Beef and Pork Values and Prices Spreads Explained (LDPM-11801, May 2004). Livestock and meat prices vary more in the short run than costs of production, processing, and marketing. ERS research shows that month-to-month changes in livestock and meat prices are driven by dynamic adjustment. It takes time for prices to adjust, and they tend to adjust more rapidly when they are increasing than when they are decreasing. When rates depend on direction, price adjustment is called asymmetric. The slow and asymmetric adjustment of prices does not appear to work against livestock producers. This report examines these price transmission issues, and it also explains price spread calculations and analyzes the relationship between marketing costs and livestock prices in the long run.
Interstate Livestock Movements (LDPM-108-01, June 2003). This article provides a current national picture of interstate movements of livestock. A better understanding of livestock shipping patterns helps in characterizing the livestock sectors, estimating the economic effects of potential disease outbreak, and assessing marketing issues. For cattle, large movements occur in most regions of the country, with greatest volume into (and within) the Northern and Southern Plains. For hogs, the dominant flow is into (and within) the Corn Belt. Sheep shipments are most numerous in the western two-thirds of the United States. Several factors shape these patterns, including relative costs of transporting animals versus feed/forage, geographic differences in feed/forage availability and prices, and the development of concentrated livestock feeding areas.
U.S. Beef Industry: Cattle Cycles, Price Spreads, and Packer Concentration (TB-1874, April 1999). In early 1996, the peak in the current cycle of cattle inventories coincided with a long list of negative factors: negative returns at the farm and feedlot, record-high feed grain prices, a severe drought in 1995-96, widening farm-retail price spreads, a low farmers' share of the consumers' Choice beef dollar, and reports of high profits for beefpackers. This confluence created an atmosphere in which some producers and members of Congress questioned whether the cattle industry was adversely affected by high packer concentration and market power. This report examines the cattle cycle of the 1990s to determine if there are differences from previous cattle cycles and, if so, how and why the differences occurred.
How Much U.S. Meat Comes From Foreign Sources? (Amber Waves, September 2012). According to ERS calculations, foreign-born cattle accounted for an average of 8.1 percent of total monthly U.S. beef production and 8.4 percent of U.S. pork supplies between 1995 and 2008.
Trade, the Expanding Mexican Beef Industry, and Feedlot and Stocker Cattle Production in Mexico (LDPM-206-01, August 2011). This report characterizes Mexican feeder-calf and fed cattle production systems in the context of the imports of Mexican feeder cattle into the United States. The increase in cattle feeding in Mexico will increasingly affect U.S. feeder cattle imports and U.S. beef exports to Mexico in ambiguous ways as Mexican population and incomes increase. Cattle production also depends on geoclimatic factors, disease and pest challenges, feeding systems, and feeder cattle export patterns.
Cow-Calf Beef Production in Mexico (LDPM-196-01, November 2010).This report characterizes Mexican beef cow-calf production systems in the context of the many issues affecting Mexican beef and cattle markets, including geoclimatic factors, disease and pest challenges, patterns of landownership, changes in export regions, and changes in domestic consumption as they relate to cow-calf production.
Japan’s Beef Market (LDPM-194-01, August 2010).This report provides a broad overview of the beef market in Japan, including consumer preferences, domestic production practices, domestic and trade policies, and market outlook.
U.S. Food Import Patterns, 1998-2007 (FAU-125, August 2009).Using import data from the U.S. Census Bureau, this study examines patterns of U.S. food imports for fiscal years 1998-2007. Results indicate faster import growth trends for consumer-ready foods such as fruit, vegetables, meats, seafood, and processed food products. Although the United States imported most bulk food commodities and perishable consumer-ready products such as fruit and vegetables from neighboring countries in the Western Hemisphere, it imported processed foods, spices, and other tropical products from more global sources, with rising import shares for many countries in Asia.
Factors Shaping Expanding U.S. Red Meat Trade (LDPM-175-01, February 2009).U.S. imports and exports of red meats—beef, pork, lamb, and mutton—have expanded rapidly over the last several decades, linking livestock sectors of the United States to those of several major trading partners. Factors driving this trade growth include not only rising incomes, but also the preference of U.S. and foreign consumers for a greater variety of red meat cuts, facilitated by the expansion of free trade agreements. Changes in currency values, including the recent depreciation of the U.S. dollar against the currencies of key trading partners, have also been important influences in expanding trade in U.S. red meat products. Domestic production continues to provide the main share of beef and pork consumed in the United States, while the share of U.S. lamb consumption from imports has increased significantly. While the red meat (and poultry) markets have been affected by animal disease issues over the last few years, the integration of trade is expected to continue.
Beef Production, Markets, and Trade in Argentina and Uruguay: An Overview (LDPM–159-01, September 2007). Argentina and Uruguay (A/U) are significant beef exporters and among the world’s greatest consumers of beef on a per capita basis. Between 13 and 20 percent of U.S. beef imports, on a tonnage basis, come from these two countries annually, mostly grass-fed beef. Currently, only 10-20 percent of A/U beef production involves a feedlot. Both countries have recently implemented national animal identification systems, and their export slaughter facilities are up to the World Trade Organization’s sanitary standards. Both countries are considered free from bovine spongiform encephalopathy (BSE) by virtue of their pasture-based production technologies but wrestle with foot-and-mouth disease (FMD). Argentine cattle/beef markets and trade are clearly and significantly affected by Government interventions in the domestic market. In contrast, Uruguay focuses on exporting beef.
Brazil Emerges as Major Force in Global Meat Markets (Amber Waves, April 2006). This research investigates the factors facilitating Brazil’s large beef exports. Despite a new outbreak of foot and mouth disease in 2005 that led several countries to ban meat imports from regions affected by the disease, Brazil will remain a significant player in world meat markets.
Market Integration of the North American Animal Products Complex (LDPM-131-01, May 2005). The beef, pork, and poultry industries of Mexico, Canada, and the United States have become more economically integrated over the past two decades. Disruptions from major diseases, such as Bovine Spongiform Encephalopathy (BSE) or mad cow disease, have caused major setbacks in beef and cattle trade. Sanitary barriers, which are designed to protect people and animals from diseases, are some of the most significant barriers to fuller integration of meat and animal markets.
Country-of-Origin Labeling: Theory and Observation, (WRS-04-02, January 2004). This report examines the economic rationale behind the various claims about the effects of mandatory country-of-origin labeling, thereby identifying the most likely outcomes. Profits motivate firms to innovate and introduce thousands of new food products each year to satisfy consumer demand. Yet, food suppliers have generally not emphasized, advertised, or labeled food with U.S. country of origin. The infrequency of "Made in USA" labels on food suggests suppliers do not believe domestic origin is an attribute that can attract much consumer interest. We find little evidence that suppliers would have difficulty supplying such labels if there were sufficient consumer interest.
International Trade and Food Safety: Economic Theory and Case Studies (AER-828, November 2003). This report examines the conceptual relationships between food safety and international trade and analyzes empirical examples from the meat and poultry, produce, food and animal feed crop, and seafood sectors.
Structure of the Global Markets for Meat (AIB-785, September 2003). Meat trade flows among countries and world regions are determined largely by differences among countries in their resource base, their consumer preferences for meat types and cuts, the extent and character of barriers to trade, and the industry structure. Future growth of the meat trade depends on further liberalization of protectionist barriers, eradication of animal diseases, economic development, and population growth. Trade growth is likely to feature greater complexity in trade patterns, with more countries engaging in trade and with an increased tendency for individual countries to import and export meat cuts and offal from the same animal species.
Animal Care and Food Safety
Food Safety Audits, Plant Characteristics, and Food Safety Technology Use in Meat and Poultry Plants (EIB-82, October 2011).Food safety technology can increase a company’s capacity to prevent foodborne contamination. A food safety audit—a quality control tool in which an auditor observes whether a plant’s processing practices and technologies are compatible with good food safety practices—can indicate how effectively food safety technology is being used. Fast food restaurants, grocery stores, and other major customers of meat and poultry processing plants conduct their own audits or hire auditors to assess the soundness of a plant’s processing operation. Meat and poultry plants can also audit themselves to help maintain process control. In this report, we document the extent of food safety audits in meat and poultry processing plants. We also examine the associations between the use of audits and plant size, firm structure, and food safety technology use. Results show that larger plants, plants subject to food safety audits, and plants that are part of a multiplant firm use more food safety technology than other plants. Plants subject to both plant-hired and customer-hired audits had greater technology use than those using single (plant- or customer-hired) audits.
The Interplay of Regulation and Marketing Incentives in Providing Food Safety (ERR-75, July 2009). This report examines the impact on food safety process control of process regulations mandated under the Pathogen Reduction/Hazard Analysis and Critical Control Point (PR/HACCP) rule by the Food Safety and Inspection Service of USDA. The current level of food safety found in U.S. meat and poultry food products is a result of process and performance regulations and management-determined actions brought about by market incentives. Processing regulations include sanitation control and other tasks related to food safety. Management-determined actions include capital investment and other actions independent of process regulations, but possibly driven by performance standards. Performance standards—regulations that allow manufacturers to reach an acceptable level of food safety in any manner they see fit—are not a subject of this report. This study used the share of samples testing positive for Salmonella spp. as a measure of food safety process control in meat and poultry processing plants and found that management-determined actions account for about two-thirds of the reduction in samples testing positive for Salmonella spp., while process regulations account for about a third of the reduction. The importance of process regulation varies but accounts for 50 percent or more of process control in about a quarter of plants, and in some plants it accounts for the entire process control system.
Economic Impacts of Feed-Related Regulatory Responses to Bovine Spongiform Encephalopathy (LDPM-170-01, September 2008). Animal and poultry disease outbreaks often lead to new or amended policies and regulations. The economic effects induced by these policies can be much greater and much longer lasting than the immediate effect of the disease outbreak alone. Using Bovine Spongiform Encephalopathy (BSE) as an example, this paper demonstrates the pervasiveness of the effects of restrictive feed policies and regulations, particularly as they relate to meat and bone meal and other protein feeds. Costs evaluated include those assumed by consumers via changes in supplies of secondary and final products; environmental costs associated with disposal of hazardous materials; lost value of products to the rendering industry, including a decline in value of meat and bone meal; and supply disruptions and substitutions within the feed market sector that increase the total costs of disease mitigation regulations. Benefits from new or amended policies also accrue but are not easily measured.
ERS and Collaborators Model Foot-and-Mouth Disease Outbreaks (Amber Waves, June 2008). This research sheds light on known and newly emerging livestock disease threats, both foreign and endemic. A new modeling tool integrates epidemiological simulations from a North American Animal Disease-Spread Model (NAADSM) developed by USDA’s Animal and Plant Health Inspection Service with an economic model developed at Purdue with ERS collaboration. This integrated framework can be used to assess effects of a disease outbreak and subsequent mitigation efforts on livestock supply, demand, and trade for up to 20 calendar quarters.
Economic Effects of Animal Diseases Linked to Trade Dependency (Amber Waves, April 2006). In the last decade, a number of animal disease outbreaks have disrupted livestock and poultry meat trade. Two diseases, avian influenza (AI) and bovine spongiform encephalopathy (BSE), are at the forefront of these trade disruptions, but a third disease, foot-and-mouth disease (FMD), has affected Brazil. Three criteria are examined to show the economic costs of disease outbreak disruptions to trade.
Disease-Related Trade Restrictions Shaped Animal Product Markets in 2004 and Stamp Imprints on 2005 Forecasts (LDPM-133-01, August 2005). Disease outbreaks and related trade restrictions that affected U.S. animal product markets and exports in 2003 continued to constrain markets in 2004. U.S. cattle and beef markets were most affected. Pork, dairy, and lamb markets did not face any direct disease issues, but both U.S. and international outbreaks of Avian Influenza buffeted poultry markets. Forecasts of 2005 U.S. animal-products trade reflect expected market responses given the uncertainties surrounding cattle and beef markets in the United States.
An Economic Chronology of Bovine Spongiform Encephalopathy in the United States (LDPM-143-01, June 2006). The first confirmed cases of bovine spongiform encephalopathy (BSE) in Canada and the United States had significant effects on trade and prices of U.S. cattle and beef. However, these incidents occurred during a period of low U.S. beef supplies, near-record beef prices, and strong domestic demand for beef that was largely unshaken by the BSE announcement. Further, U.S. reliance on beef and cattle exports, roughly 10 percent of production, was not great enough to cause burdensome increases in domestic supplies. Increased regulations, however, imposed additional costs on beef production and processing sectors.
Food Safety Innovation in the United States: Evidence from the Meat Industry (AER-831, April 2004). Innovations in food safety help lower the cost of safe food. While market incentives for food safety innovation are relatively weak, some restaurant chains and large retailers are encouraging processors to overcome these challenges. These large, savvy meat and poultry buyers are setting and enforcing safety standards and creating markets for food safety. As a result, food safety investments are increasing throughout the meat supply chain. This is the first report by ERS on food safety innovation.
Food Traceability: One Ingredient in a Safe and Efficient Food Supply (Amber Waves, April 2004). Traceability is just one element of any supply management or quality/safety control system. This research reveals the importance of traceability and discusses the extent to which it is used in the U.S. food supply system.
Savvy Buyers Spur Food Safety Innovations in Meat Processing (Amber Waves, April 2004). This report shows that meat processors face special challenges that weaken their incentives to invest in food safety improvements. In particular, meat producers have had difficulties appropriating the benefits of food safety innovation because improved food safety is a difficult attribute to market to consumers. Large meat and poultry buyers are setting and enforcing safety standards and creating markets for food safety. The research concludes that these markets are driving increases in food safety investments throughout the meat supply chain.
Traceability in the U.S. Food Supply: Economic Theory and Industry Studies (AER-830, March 2004). This investigation into the traceability baseline in the United States finds that private sector food firms have developed a substantial capacity to trace.
Food Safety Issues for Meat/Poultry Products and International Trade (AIB-789-4, February 2004). This research summarizes three case studies of how trade in meat and poultry products can be affected by food safety concerns.
Local Meat and Poultry Processing: The Importance of Business Commitments for Long-Term Viability (ERR-150, June 2013).Consumer demand for local food, including local meat and poultry, has risen in recent years. Farmers and others suggest that limited processing infrastructure restricts the supply of local meat and poultry. At the same time, existing small processors often lack the steady, consistent business required for profitability. This report explores this multi-faceted problem and identifies fundamental causes, drawing on a cost analysis of local processing.
Alternative Beef Production Systems: Issues and Implications (LDPM-218-01, April 2013). U.S. beef markets are undergoing rapid change as alternative production systems evolve in response to consumer demands and compete with conventional grain-fed beef production. Beef produced through distinguishable systems has different marketable attributes that may attract price premiums.
Where’s the (Not) Meat?—Byproducts From Beef and Pork Production (LDPM-209-01, November 2011).The report describes the many uses for animal byproducts—both inedible and edible—and estimates the volume of production of beef and pork variety meats in the United States in addition to the proportion of value added to the live animal from the byproducts. The value added to the U.S. meat trade and the role of variety meats in the global marketplace is also evaluated.
Cattle Sector Production Practices and Regional Price Differences (LDPM-202-1, April 2011).This report describes the tendency for fed cattle from the Southern Plains to typically sell at a premium over cattle from the Northern Central Plains, detailing the nuances in regional production and marketing practices that underlie the price relationship referred to as “the North-South spread.”
The Diverse Structure and Organization of U.S. Beef Cow-Calf Farms (EIB-73, March 2011). Beef cow-calf production in the United States is widespread, occurring in every State. Nearly 765,000 farms, about 35 percent of the 2.2 million farms in the United States, had a beef cow inventory in 2007. Most of these were small, part-time operations. About a third of farms that raise beef animals had a beef cow inventory of less than 10 cows, more than half had fewer than 20 cows, and nearly 80 percent had fewer than 50 cows. In this study, ERS uses data from USDA’s 2008 Agricultural Resource Management Survey for U.S. beef cow-calf operations to examine the structure, costs, and characteristics of beef cow-calf producers. Many small operations are “rural residence farms” that specialize in beef cow-calf production, but their income from off-farm sources exceeds that from the farm. Most beef cow-calf production occurs on large farms, but cow-calf production is not the primary enterprise on many of these farms. Findings suggest that operators of beef cow-calf farms have a diverse set of goals for the cattle enterprise.
Ethanol Co-product Use In U.S. Cattle Feeding: Lessons Learned and Considerations (FDS-09D-01, April 2009). The byproducts of making ethanol, sweeteners, syrups, and oils used to be considered less valuable than the primary products. But the increased livestock-feed market for such byproducts in the past few years has switched the perception to one in which the ethanol industry’s grain-based “co-products” have market value separate from the primary products. Co-products such as dried distiller’s grains, corn gluten feed, corn gluten meal, corn oil, solubles, and brewer’s grains have become economically viable components, along with traditional ingredients (such as corn, soybean meal, and urea) used in feed rations. The co-products have limitations, such as variable moisture content, product availability, nutrient excesses or deficiencies, and nutrient variability. These limitations affect how these products must be handled and stored and how much they cost feed buyers. Dried distiller’s grains are more amenable to pelleting and other bulk-handling methods than other co-products, which gives them an advantage in international markets.
The Transformation of U.S. Livestock Agriculture: Scale, Efficiency, and Risks (EIB-43, January 2009). U.S. livestock production has shifted to much larger and more specialized farms, and the various stages of input provision, farm production, and processing are now much more tightly coordinated through formal contracts and shared ownership of assets. Important financial advantages have driven these structural changes, which in turn have boosted productivity growth in the livestock sector. But structural changes can also generate environmental and health risks for society, as industrialization concentrates animals and animal wastes in localized areas. This report relies on farm-level data to detail the nature, causes, and effects of structural changes in livestock production.
USDA Foreign Agricultural Service (FAS) offers Meat, Livestock, Poultry, and Eggs Analysis with links to publications, charts, and information on international trade; this includes the online publication Livestock and Poultry: World Markets and Trade.
USDA National Agricultural Statistics Service (NASS) provides data on inventories, production, stocks, balance sheets, and prices by State and nationally, as well as current progress and commodity-specific reports.
Information on the Canadian Livestock situation is also available through NASS and Canadian sources. These include reports on both cattle and hogs.
USDA Agricultural Marketing Service (AMS) provides current cash grain and livestock prices, and market news.
USDA World Agricultural Outlook Board (WAOB) provides data on supply and utilization of beef and other livestock products and principal crops of the United States and other countries.
USDA Grain Inspection, Packers, and Stockyards Administration (GIPSA) facilitates the marketing of livestock, poultry, meat, and related agricultural products and promotes fair and competitive trading practices for the benefit of consumers and American agriculture.