Sector at a Glance

Cattle production is the most important agricultural industry in the United States, accounting for $66.2 billion in cash receipts in 2019. Overall, cattle production represents about 18 percent of the $374 billion in total cash receipts forecast for agricultural commodities in 2019. With its rich agricultural land resources, the United States has developed a beef industry that is largely separate from its dairy sector. This is in contrast 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 beef cattle industry is roughly divided into two production sectors: cow-calf producers and cattle feeding.

U.S. Cattle Production

Cattle Cycle

The cattle cycle refers to a cyclical process in which the size of the national cattle herd (including all cattle and calves) increases and decreases over time, mainly due to the biological constraints that delay cow-calf producers’ response to fluctuations in the profitability of cattle production. The total number of beef cattle in the United States is highly dependent on the stage in that cycle. In general, the cattle cycle is determined by the combined effects of cattle prices. The gestation period (the longest among all meat animals), the time needed for raising calves to market weight; and climate 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 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 forage supplies can shorten or extend cycles.

The last full cattle cycle began in 2004 with 94.4 million head of cattle and calves. The herd expanded for 3 years until 2007 (to 96.6 million head), when increasing feed and energy prices caused it to begin contracting. This contraction extended up to 2010, when dry conditions began that persisted through 2013. The conditions caused a reduction in pasture availability, forcing producers to cull cows and limit heifer retention, which reduced the following year’s calf crop. Each year’s calf crop accounts for a large share of the next year’s supply of calves placed in feedlots (feeder calves) and, subsequently, of fed cattle (feeder calves marketed for slaughter from feedlots). In the recent cycle, fewer cattle entering the value chain increased the demand for feeder cattle out of Mexico and moved feeder cattle into feedlots at a faster pace than normal. Then, by late 2013 and 2014, grazing conditions improved and feed prices turned lower. This lifted feeder calf prices, which helped to improve cow-calf profitability. The 7-year liquidation of the herd ended on January 1, 2014 (all cattle and calves totaled 88.2 million), the smallest herd size since 1952. Since then, the cattle herd has expanded, reaching 94.4 million head on January 1, 2020. The National Agricultural Statistics Service (NASS) provides information on cattle inventory in its semi-annual Cattle reports.

Cow-Calf Operations

Cow-calf operations primarily focus on maintaining a herd of beef cows for raising calves. Most calves are born in the spring and weaned at 3- to 7-months. The calves then move on 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 forage is available at weaning, some calves may be retained for further grazing and growth until the following spring, when they are sold. 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 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 2017 Census of Agriculture, the average beef cow herd is 43.5 head, but operations with 100 or more beef cows compose 9.9 percent of all beef operations and 56 percent of the beef cow inventory. Operations with 50 or fewer head are largely part of multi-enterprises or for providing income supplemental to off-farm employment.

Cattle Feeding

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 castrated to become steers, and together with the remaining heifers are sold into the feeding system for slaughter. There are different ways for these steers and heifers to grow to market weight. After being weaned, the calves may enter a stocker program, where they will graze on grass for 3-4 months before being placed in a feedlot. Another option is to move the calves into a 30- to 60-day preconditioning program with an animal health protocol for deworming, dehorning, and vaccinating and start them 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 prior to entering a feedlot.

A feedlot, or feedyard, 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 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 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 from 90 days to as long as 300 days. Average gain is from 2.5 to 4 pounds per day on about 6 pounds of dry-matter 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.

Cattle feeding operations are concentrated in the Great Plains, but they are also prevalent in parts of the Corn Belt, Southwest, and Pacific Northwest. Feedlots with less than 1,000-head capacity make up the vast majority of U.S. feedlot operations, but they market a relatively small share of the fed cattle. In contrast, while lots 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 product for a particular market, such as those requiring cattle not treated with hormones and not fed beta agonists. NASS provides monthly Cattle on Feed reports.

Policy

Federal Government assistance to the cattle sector is limited to emergency measures approved for a specific scope and period of time to address 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 currently offered programs.

The trend toward fewer and larger enterprises has brought environmental issues to the forefront of public policy regarding the U.S. livestock industry. As animal density (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 posts information about the environmental requirements for the production of livestock in Animal Feeding Operations.

Any product that is used as an animal feed ingredient is regulated by the U.S. Food and Drug Administration. The USDA-APHIS Center for Veterinary Medicine issues uniform feed-ingredient definitions and feed-labeling standards to ensure feed is safe.

Cattle are also affected by other Government policies and programs related to animal health, food safety, and mandatory price reporting.

U.S. Beef and Cattle Trade

Trade

Most of the beef produced and exported from the United States is grain-finished and marketed as high-value cuts. In 2019, the United States ranked as the third-largest exporter, though it has typically been a net importer (except for the years 2010-13, and more recently 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, that is, to make ground beef products. The amount of beef exported and imported is largely affected by domestic beef production in a given year. 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 ebb and flow (See the Background chapter for information on the cattle cycle). 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

Imports of Canadian cattle into the United States were banned following Canada's May 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 animals less 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, see USDA's Animal and Plant Health Inspection Service (APHIS)Animal and Animal Product Export Information.

Simultaneously, in December 2003, discovery of BSE in a dairy cow imported from Canada led many U.S. trading partners either to restrict some U.S. beef products or implement a complete ban on all U.S. beef, as well as on U.S. cattle. Two more cases of BSE in the United States, in Texas (June 2005) and in Alabama (March 2006), were subsequently reported. The BSE situation dramatically altered U.S. beef export patterns in 2004. Japan, South Korea, China (and various other countries) ceased all imports of U.S. beef, while Mexico and Canada initially closed borders but reopened them within a matter of months.

In 2011, U.S. beef exports reached 2.8 billion pounds in 2011 (in carcass-weight equivalents), finally surpassing the previous historic high set in 2003 of 2.5 billion pounds. In 2013, the World Organisation for Animal Health upgraded the BSE status of the United States to negligible risk, the highest status available, based on U.S. history with the disease, the implementation and enforcement of the U.S. feed ban, and the BSE surveillance system. For the latest details on the export requirements for U.S. beef to specific countries, see USDA’s Food Safety Inspection Service (FSIS) Export Library.

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Beef Exports

From 2015 to 2018, U.S. beef exports achieved double-digit growth in each year, mostly driven by the increased demand from key Asian markets. However, in 2019, U.S. beef exports decreased more than 4 percent from 2018 to 3.0 billion pounds as demand diminished in several markets. The top five export markets in 2019 comprised 80 percent of total exports by volume: Japan, South Korea, Mexico, Canada, and Hong Kong. Japan is the largest consumer of U.S. beef, with a 26-percent share of U.S. export volume.

Beef Imports

In 2019, U.S. beef imports increased almost 2 percent from 2018 to nearly 3.1 billion pounds, but was eclipsed by China as the top importing nation. Canada, Australia, New Zealand, and Mexico were the top suppliers of beef to the United States in 2019. Most of the beef imported from Australia and New Zealand goes into processed products such as ground beef. In recent years, tight beef supplies in Oceania and the strengthening Australian dollar relative to the U.S. dollar since 2009 have hampered total beef supplies to the United States. Previously banned due to food safety concerns, U.S. imports from Brazil are now open to raw beef products, but Brazil still provides a significant portion of the total cooked beef imported.

 

Live Cattle Trade

The United States imports much larger numbers of cattle than it exports. Canada and Mexico are the only significant cattle suppliers to the U.S. market because of their geographical proximity and the complementarity of their cattle and beef sectors to those of the United States. From 2015 to 2019, over 60 percent of the cattle imported came from Mexico, and nearly all of them were lighter-weight cattle intended for stocker or feeder operations in the United States. Of the cattle imports from Canada, almost 70 percent were destined for immediate slaughter; on average, 60 percent of these were fed steers and heifers and 40 percent were cows and bulls. The remaining 30 percent of the cattle imported from Canada went to U.S. feedlots for finishing.

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 breeding cattle have emerged in recent years, including Turkey, Russia, Qatar, and Vietnam.

For the latest trade data, see Livestock & Meat International Trade Data, which contains 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 ERS Livestock, Dairy, and Poultry Outlook report and the USDA, Foreign Agricultural Service semi-annual Livestock and Poultry: World Markets and Trade reports.

Last updated: Tuesday, August 04, 2020

For more information, contact: Russell Knight