Sector at a Glance
Cattle production is the most important agricultural industry in the United States, consistently accounting for the largest share of total cash receipts for agricultural commodities. In 2021, cattle production is forecasted to represent about 17 percent of the $391 billion in total cash receipts for agricultural commodities. With rich agricultural land resources, the United States has developed a beef industry that is largely separate from its dairy sector. The U.S. beef industry is unique when compared to countries like India that produce beef from water buffalo, which are used as dual-purpose animals. In addition to having the world's largest fed-cattle industry, the United States is also the world's largest consumer of beef—primarily high-value, grain-fed beef. The U.S. beef cattle industry is often divided into two production sectors: cow-calf producers and cattle feeding.
U.S. Cattle Production
The cattle cycle is a process in which the size of the national cattle herd—including all cattle and calves—increases and decreases over time. The herd-size variation is often caused by the lengthy gestation period relative to hogs and poultry delaying cow-calf producers’ response to profit fluctuations. The total number of beef cattle in the United States is highly dependent on the stage in that cycle.
Typically, the cattle cycle is influenced by the combined effects of cattle prices; the gestation period for cattle; the time needed for raising calves to market weight; and climate conditions. If cattle prices are expected to be high, producers slowly build up their herds; if prices are expected to be low, producers reduce their herds by culling older cows and keeping fewer heifers to replace older cows or add to their herd. The cattle cycle averages 8–12 years, but persistent dry conditions on pastures and in harvested feed supplies can alter a cycle’s duration.
The last full cattle cycle began in 2004 with 94.4 million head of cattle and calves, including beef and dairy cattle. The herd expanded for 3 years to 96.6 million head until 2007, when increasing feed and energy prices caused the herd to contract. This contraction continued to 2010, when environmentally dry conditions began and persisted through 2013. The drought conditions decreased pasture availability forcing producers to cull cows and limit heifer retention, which reduced 2014’s calf crop.
Each year’s calf crop accounts for a large share of the next year’s supply of feeder calves placed in feedlots and, subsequently, of fed cattle—or feeder calves marketed for slaughter from feedlots. During the most recent full cycle (2004–2014), fewer cattle entered the value chain increasing the demand for feeder cattle imported from Mexico. This cycle event caused feeder cattle to move into feedlots earlier than normal. By late 2013 and early 2014, grazing conditions improved, and feed prices decreased. These conditions increased feeder calf prices, which helped to improve cow-calf profitability. A 7-year liquidation of the national cattle herd ended on January 1, 2014 at 88.2 million cattle and calves, which was the smallest herd size since 1952. Since then, the cattle herd grew to a peak in 2019 of 94.8 million head. As of January 1, 2021, the herd has decreased by 1.3 percent to 93.6 million cattle head. The National Agricultural Statistics Service (NASS) provides information on cattle inventory in its semi-annual Cattle reports.
Cow-calf operations mainly maintain a herd of beef cows for raising calves. Most calves are born in the spring and weaned at three to seven months. Following the weaning stage, calves can move through the value chain in several different ways. Some of the female calves (heifers) and male calves (bulls) may be retained in the herd or sold to another producer. If additional pasture forage is available at weaning, then some calves may be retained for further grazing and growth until the following spring when they would be sold. Throughout the United States, cow-calf operations are located on land not typically suited or needed for crop production. These operations depend on range and pasture forage conditions, which in turn depend on the area’s variations of average rainfall and temperature. Beef cows graze on 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. Based on the NASS 2017 Census of Agriculture, the average beef cow herd is 43.5 head. Operations with 100 or more beef cows compose 9.9 percent of all beef operations and 56.0 percent of the beef cow inventory. Operations with 50 or fewer head are often part of multi-enterprises or they provide supplemental income to off-farm employment.
When calves are weaned, producers must decide if they should retain some heifer and bull calves to replace older cows and bulls or for expanding their herd. The remaining bulls are then castrated to become steers, and together with the remaining heifers not kept in the herd, are sold into the feeding system for slaughter. There are different ways for these new steers and heifers for slaughter to grow to market weight. After being weaned, the calves may enter a stocker program, where they will graze on grass for three to four months before being placed in a feedlot. Another option is to move calves into a 30- to 60-day preconditioning program. Within this program the calves go through an animal health protocol for deworming, dehorning, and vaccinating so calves can then be started on feed to ensure they are healthy in the next stage of the value chain. Still another option is for the calves to be backgrounded for 90–120 days, placed in pens or lots and fed dry forage, silage, and grain before entering a feedlot.
A feedlot is the final stage of cattle production. It provides a confined area for feeding steers and heifers on a ration of grain, silage, hay, and/or protein supplement to produce a carcass that will meet the USDA quality grade Select or better for the slaughter market. The USDA Agricultural Marketing Service grades beef as whole carcasses in two ways: (1) quality grades for tenderness, juiciness, and flavor; and (2) yield grades for denoting the amount of usable lean meat on the carcass. The quality grades are Prime, Choice, and Select. Depending on weight at feedlot placement, feeding conditions, and desired grade, the feeding period can be 90 to 300 days. Average gain is from two and a half to four pounds per day on about six pounds of dry-matter feed per pound of gain. Although most of a calf's nutrients come from grass until it is weaned, feedlot rations are generally 70 to 90 percent grain and protein concentrates.
Cattle feeding operations are concentrated in the Great Plains and they are also located in parts of the Corn Belt, Southwest, and Pacific Northwest. Feedlots with less than 1,000-head capacity make up most of U.S. feedlot operations, but they market a relatively small share of the fed cattle. Conversely, although feedlots with 1,000-head-or-greater capacity are less than 5 percent of total feedlots, they market 80 to 85 percent of fed cattle. Feedlots with a capacity of 32,000 head or more market around 40 percent of fed cattle. The industry continues to shift toward a small number of very large, specialized feedlots focused on raising a high-quality cattle for a particular market, such as markets requiring cattle not treated with hormones and not fed beta agonists. NASS provides monthly Cattle on Feed reports.
Federal Government assistance provided to the cattle sector is limited to emergency measures approved for a specific scope and time period. Federal assistance addresses the needs of producers suffering losses due to drought, hot weather, disease, insect infestation, flood, fire, hurricane, earthquake, severe storms, extreme cold, or other natural disasters. See the Disaster Assistance Programs section of USDA's Farm Service Agency web site for information on current programs.
The sector trends toward fewer and large enterprises, which brings environmental issues to the forefront of public policy regarding the U.S. livestock industry. As animal density (e.g., number of animals per unit of land area) increases, so do concerns about air and water quality, occupational health (of livestock workers), and waste management. The Environmental Protection Agency reports the environmental requirements for the production of livestock in Animal Feeding Operations.
Any product used as an animal feed ingredient is regulated by the U.S. Food and Drug Administration (FDA). The FDA Center for Veterinary Medicine distributes uniform feed-ingredient definitions and feed-labeling standards to ensure safe use of animal foods.
Cattle are also affected by other government policies and programs related to animal health, food safety, and mandatory price reporting.
Most beef produced in and exported from the United States is grain-fed and marketed as high-value cuts. In 2020, the United States was ranked as the third-largest beef exporter, although it often has been a net importer, excluding years 2010–13, and 2018.
As U.S. beef production expands and contracts following the cattle production cycle, it will affect the amount of imported beef needed for processing to make ground beef products. The amount of beef exported and imported is mainly affected by domestic beef production. Similarly, beef traded in the global marketplace responds to beef availability. Cattle production tends to follow a multiyear cycle that can cause the domestic beef supply to vary. See UDSA ERS Background chapter for information on the cattle cycle for more information. When the cattle herd contracts in a downward trend, more domestic cows and bulls are slaughtered. Increasing domestic availability of lean beef and decreasing the need for import.
Bovine Spongiform Encephalopathy Effects on U.S. Cattle and Beef Trade
In May 2003, the United States banned Canadian cattle imports following Canada's 2003 bovine spongiform encephalopathy (BSE) case. In July 2005, U.S. imports of Canadian cattle for immediate slaughter or for finishing in a U.S. feedlot resumed for cattle younger than 30 months old. In November 2007, USDA expanded imports to include live cattle of all ages from Canada and any other country recognized as presenting a minimal risk of introducing BSE into the United States. Currently, Canada is the only minimal-risk country designated by the United States. All animals born after Canada's 1997 feed ban are eligible to be imported into the United States. For the latest requirements for exporting U.S. live animals and animal products by country destination, visit USDA's Animal and Plant Health Inspection Service (APHIS) Animal and Animal Product Export Information and importing live animals into the United States visit Animal and Animal Product Import Information.
Simultaneously, in December 2003, discovery of a BSE-infected dairy cow imported from Canada led many U.S. trading partners to restrict some U.S. beef products or to completely ban all U.S. beef and cattle. Two more cases of BSE in the United States—in Texas (June 2005) and in Alabama (March 2006)—were subsequently reported. The reported BSE cases significantly altered U.S. beef export patterns in 2004. Japan, South Korea, China, and various other countries ceased importing U.S. beef and beef products for several years. Although Mexico and Canada initially closed their borders to U.S. beef imports, they reopened trade within a matter of months.
In 2011, U.S. beef exports reached 2.8 billion pounds (in carcass-weight equivalents), which surpassed 2003’s historic record of 2.5 billion pounds. In 2013, the World Organization for Animal Health upgraded the United States’ BSE status to “negligible risk”—the highest status available—based on the United States’ history with the disease, the implementation and enforcement of the U.S. feed ban, and the USDA BSE surveillance system. For the latest details on the export eligibility and requirements for U.S. beef to specific countries, see USDA’s Food Safety Inspection Service (FSIS) Export Library.
Want more information?
- Economic Impacts of Feed-Related Regulatory Responses to Bovine Spongiform Encephalopathy, September 2008.
- An Economic Chronology of Bovine Spongiform Encephalopathy in North America, June 2006.
- Did BSE Announcements Reduce Beef Purchases?, December 2006.
- International Trade and Food Safety: Economic Theory and Case Studies, November 2003.
Information on BSE from other USDA agencies:
U.S. beef exports in 2020 totaled 2.96 billion pounds, which decreased over 2 percent from 2019. The main reason for the decline was the 25 percent reduction in shipments to Mexico as a result of a depreciated peso relative to the dollar and an economic recession. Nonetheless, Mexico retained its rank as the third largest export market. In 2020, the top 5 U.S. beef export markets that made up 78.7 percent of total beef exports (by volume) included: Japan, South Korea, Mexico, Canada, and Hong Kong. The United States’ 2 largest beef markets, Japan and South Korea, accounted for about 50 percent of U.S. beef exports. The third and fourth top markets, Mexico and Canada, represent the North American with more than 20 percent of total exports. Hong Kong was the fifth largest market totaling 7 percent of the 2020 total U.S. beef exports.
In addition, the United States exported record volumes of beef to China in 2020. In 2017, the United States regained market access to China for certain beef and beef products after being banned in 2003 due to BSE. Since reopening, the United States has exported year-over-year higher volumes to China. This increase stems from China’s commitment to purchase an additional $200 billion of American-made goods and services over 2020 and 2021 under the U.S. China Phase 1 trade agreement. As a result, U.S. beef exports to China rose to 119 million pounds, 4 percent of total export volume, becoming our seventh largest market in 2020. Effective March 17, 2020, the restrictions on U.S. beef and beef products to China have been removed.
Compared to 2019, 2020 U.S. beef imports rose about 9 percent totaling 3.34 billion pounds, which was the largest import since 2015. Canada, the largest beef supplier, accounted for 25 percent of total U.S. beef imports in 2020. The United States’ second and third largest beef sources were Australia and Mexico, each providing about 20 percent. New Zealand, the fourth major supplier, shipped 15 percent of U.S. beef imports. Brazil—the fifth major source—supplied almost 7 percent of the U.S. beef import needs. Most of the beef imported is fresh boneless beef trimmings that go into processed products such as ground beef.
The United States imports more cattle than it exports. Canada and Mexico are the only significant cattle suppliers to the U.S. market because of their geographical proximity and because of how their cattle and beef sectors compliment the United States’ sector. From 2016 to 2020, Mexico provided about 64 percent of U.S. cattle imports, and nearly all of them were lighter-weight cattle intended for U.S. stocker or feeder operations. Of the cattle imports from Canada, about 73 percent were designated for immediate slaughter; on average, 60 percent of these were fed steers and heifers and 40 percent were cows and bulls. About 25 percent of the cattle imported from Canada went to U.S. feedlot operations. Lastly, less than 2 percent of cattle imported from Canada are used for breeding.
U.S. cattle exports to Canada and Mexico vary from year to year in both the total numbers exported and the relative percentages exported to each country. Historically, the United States has primarily exported slaughter cattle to both Canada and Mexico, in addition to some feeder cattle to Canada. However, new markets for U.S. cattle exports of dairy and beef females for breeding have emerged in recent years including Turkey, Russia, Qatar, and Vietnam.
For the latest trade data, see Livestock & Meat International Trade Data. These reports contain monthly and annual data for imports and exports of live cattle, hogs, sheep, and goats. The tables only display quantities, and the beef and veal, pork, and lamb and mutton data are reported on a carcass-weight-equivalent basis. Breakdowns by country are included. For the current U.S. meat and animal trade outlook, see the USDA ERS Livestock, Dairy, and Poultry Outlook report and the USDA, Foreign Agricultural Service semi-annual Livestock and Poultry: World Markets and Trade reports.