Sector at a Glance
Cattle production is the most important agricultural industry in the United States, accounting for $67.1 billion in cash receipts in 2018. Overall, cattle production represents about 18 percent of the $371 billion in total cash receipts from agricultural commodities in 2018. 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 that 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.
The cattle cycle refers to a cyclical process where the size of cattle herd increases and decreases over time due to the biological constraints that delay cow-calf producers from responding to perceived changes in the profitability of cattle production. Thus, 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 of all meat animals); the time needed for raising calves 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 by culling older cows and keeping fewer heifers to replace older cows or add to their herd. The cattle cycle averages 8-12 years in duration, but persistent dry conditions on pastures and 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 (96.6 million head) at which time increasing feed and energy prices caused the herd to begin contracting. This contraction extended when, in 2010, dry conditions began and persisted through 2013. That caused a reduction in pasture availability, forcing producers to cull cows and limit heifer retention, which reduced the following year’s calf crop. One year’s calf crop accounts for a large share of the next year’s supply of feeder calves and, subsequently, of fed cattle. 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. 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 to reach 94.8 million head of cattle on January 1, 2019. The National Agricultural Statistics Service (NASS) provides information on cattle inventory in the semi-annual Cattle reports.
Cow-calf operations are primarily focused on maintaining a herd of beef cows with the purpose of raising calves. Most calves are born in the spring and weaned at 3- to 7-months old. At that time, calves can 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 additional 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 (or consume) 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 are supplemental 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 to expand their herd. The remaining bulls are castrated to become steers and, together with the other heifers, are sold into the feeding system for slaughter. There are a mix of different ways for these steers and heifers to grow to market weight. After being weaned, the steers and heifers may enter a stocker program whereby the calves would 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 pre-condition program that places the calves in an animal health protocol for deworming, dehorning, vaccinating, and starts them on feed to ensure they are healthy in the next stage of the value chain. Or the calves could be backgrounded for 90-120 days, whereby the calves could be placed in pens or lots and fed dry forage, silage, and grain prior entering a feedlot.
A feedlot, or feedyard, is the final stage of cattle production with a focus on feeding steers and heifers in a confined area a ration of grain, silage, hay, and/or protein supplement for the slaughter market that are expected to produce a carcass that will grade select or better. The USDA Agricultural Marketings 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 placement, feeding conditions, and desired grade, the feeding period can be from 90 days to as long as 300 days. Average gain is 2.5-4 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 is concentrated in the Great Plains, but is also important in parts of the Corn Belt, Southwest, and Pacific Northwest. Feedlots with less than 1,000-head of capacity compose the vast majority of U.S. feedlot operations, but market a relatively small share of the fed cattle. In contrast, lots with 1,000-head or greater capacity compose less than 5 percent of total feedlots, but market 80 to 85 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 focused on raising a high-quality product for a particular market like conventional, natural, hormone-free, etc. NASS provides monthly Cattle on Feed reports.
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, 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 regarding air and water quality, occupational health, 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. The agency also 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.
Although the United States does not have the largest cattle herd in the world, the Nation is the largest producer and consumer of beef in the world, making the United States an important partner in the global marketplace for beef. Most of the beef produced and exported from the United States is grain-finished, and marketed as high-value cuts. In 2018, the United States ranked as the fourth largest exporter, but typically the United States is a net importer except for 2010-13 and recently in 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, i.e., to make ground beef products. The amount of beef exported and imported is largely be 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 multi-year 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, there are more domestic cows and bulls slaughtered therefore increasing domestic availability of lean beef, decreasing the need for imported lean beef.
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 of age. 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 that had been 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 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 other countries (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 stat 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.
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:
In 2018, U.S. beef exports increased more than 10 percent from 2017 to 3.2 billion pounds. The top five export markets in 2018 comprised 82 percent of total exports by volume: Japan, South Korea, Mexico, Hong Kong, and Canada. Japan is the largest consumer of U.S. beef with 28 percent share of U.S. export volume. From 2015 to 2018, U.S. beef exports have achieved double-digit growth in each year, mostly driven by the increased demand from key Asian markets.
In 2018, U.S. beef imports increased less than 1 percent from 2017 to nearly 3 billion pounds. The United States fell to the second largest importer of beef behind China. Canada, Australia, and New Zealand are the top three suppliers of beef to the United States. 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. U.S. imports from both Argentina and Brazil are limited to cooked products because of disease restrictions, but these two countries provide a significant portion of the total cooked beef imported.
The United States imports significantly greater 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 that of the United States. From 2014 to 2018, about 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 remaining cattle that come from Canada, more than 60 percent of the Canadian cattle were destined for immediate slaughter—either cows or fed steers and heifers. Of Canadian cattle imported for immediate slaughter, on average 60 percent have been fed steers and heifers and 40 percent cows. Feeder cattle imported for finishing in U.S. feedlots consist of more than 30 percent cattle imported from Canada.
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. 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 the past couple of years, including Turkey and Russia.
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.