With its abundant grasslands and large grain supply, the United States has developed a beef industry that is largely separate from its dairy sector. With the world's largest fed-cattle industry, the United States is also the world's largest producer of beef—primarily high-quality, grain-fed beef for domestic and export use. The industry is roughly divided into two production sectors: cow-calf operations and cattle feeding.
The cattle cycle refers to cyclical increases and decreases in the cattle herd over time that arise because biological constraints prevent producers from instantly responding to price. In general, the cattle cycle is determined by the combined effects of cattle prices; the time needed to breed, birth, and raise cattle to market weight; and climatic conditions. If prices are expected to be high, producers slowly build up their herd sizes; if prices are expected to be low, producers reduce their herds. The cattle cycle averages 8-12 years in duration, the longest of all meat animals, but the effects of persistent dry conditions on pastures and harvested forage supplies can shorten or extend cycles.
Dry conditions that began in 1996 and persisted from 1998 through 2003 held down the retention of heifers until forage conditions improved. By late 2003 and 2004, grazing conditions had improved and ended a 9-year cyclical liquidation of cattle inventories. This change, together with strong feeder calf prices, began the process of herd expansion through the addition of heifers and calves. The expansion lasted until 2007; then inventories began declining because of increasing feed and energy prices. The National Agricultural Statistics Service (NASS) provides information on cattle numbers in semi-annual inventory reports.
Cow-calf operations are located throughout the United States, typically on land not suited or needed for crop production. These operations depend on range and pasture forage conditions, which in turn depend on variations in the average rainfall and temperature for the area. Beef cows harvest forage from grasslands to maintain themselves and raise a calf with very little, if any, grain input. The cow is maintained on pasture year round, as is the calf until it is weaned. If additional forage is available at weaning, some calves may be retained for additional grazing and growth until the following spring when they are sold. The average beef cow herd is 40 head, but operations with 100 or more beef cows compose 9 percent of all beef operations and 51 percent of the beef cow inventory. Operations with 40 or fewer head are largely part of multi-enterprises, or are supplemental to off-farm employment.
Cattle feeding is concentrated in the Great Plains, but is also important in parts of the Corn Belt, Southwest, and Pacific Northwest. Cattle feedlots produce high-quality beef, grade Select or higher, by feeding grain and other concentrates for about 140 days. Depending on weight at placement, feeding conditions, and desired finish, the feeding period can be from 90 to as long as 300 days. Average gain is 2.5-4 pounds per day on about 6 pounds of dry-weight feed per pound of gain. While most of a calf's nutrient inputs until it is weaned are from grass, feedlot rations are generally 70- to 90-percent grain and protein concentrates.
Feedlots with less than 1,000 head of capacity compose the vast majority of U.S. feedlots, but market a relatively small share of fed cattle. In contrast, lots with 1,000 head or more of capacity compose less than 5 percent of total feedlots, but market 80- to 90-percent of fed cattle. Feedlots with 32,000 head or more of capacity market around 40-percent of fed cattle. The industry continues to shift toward a small number of very large specialized feedlots, which are increasingly vertically integrated with the cow-calf and processing sectors to produce high-quality fed beef. NASS provides monthly Cattle on Feed reports.