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The Cattle Business - Cow Herd Consolidation and the Need for Uniformity
Livestock Update, July 2001
Bill R. McKinnon, Extension Animal Scientist, Marketing, VA Tech
Data across the country indicates that the bulk of the nation's beef cows are owned increasingly by fewer operations. According to the January 1, 2001 Cattle Inventory Report, during 2000 there were 830,880 operations with beef cows. The number of beef cow/calf operations is down 11% from the 932,920 operations back in 1990. On initial examination, the average herd size has decreased from 46.5 cows per herd down to 40.4 cows per herd, contradicting the notion of herd consolidation.
On closer review, the statistics do point to more of the country's beef cows being owned in larger herds. The table below breaks down beef cow ownership by herd size over the last ten years.
Table 1. Beef Cow Ownership by Herd Size
| Year | 1 - 49 Head | 50 - 99 Head | 100 + Head |
|---|---|---|---|
| 1990 | 33.4% | 20.1% | 46.5% |
| 2000 | 29.3% | 19.2% | 51.5% |
A further breakdown of 2000 beef cow ownership finds that 14.7 % of beef cows are in herds of over 500 head.
The Southeastern portion of the country is home to roughly 20% of the nation's cowherd. Herd size in the Southeast tends to be smaller than the country as a whole.
Table 2. Beef Cows and Herd Size in the Southeast
| State | Beef Cows | Cow/Operation |
|---|---|---|
| Alabama | 737,000 | 31 |
| Georgia | 614,000 | 28 |
| Florida | 975,000 | 58 |
| Kentucky | 1,060,000 | 26 |
| Mississippi | 579,000 | 26 |
| North Carolina | 436,000 | 19 |
| South Carolina | 218,000 | 23 |
| Tennessee | 1,035,000 | 19 |
| Virginia | 671,000 | 30 |
| 6,325,000 (19% of total) | 29 cows/herd |
At the same time the nation's cowherd is undergoing consolidation, there is more concentration taking place in the cattle feeding sector. The industry advisory service, CattleFax, reports that approximately 2000 feed yards are now feeding 85-87% of all fed cattle. The top twenty-five feeding companies feed 38% of the cattle. CattleFax predicts that those outfits will feed nearly 50% of the cattle by 2005.
The combination of larger feeding concerns, more cattle being marketed on a carcass value grid, the growth of branded products, and the development of production/marketing alliances has placed pressure on feeder cattle buyers. There is increased importance on feeder cattle buyers to put together more uniform groups of feeder cattle. "Uniform" is rapidly beginning to mean much more than sex, "breed"/color and a 150 pound weight range. Increasingly, buyers will demand and reflect in their bids groups of cattle with additional measures of uniformity such as similar health background, more uniformity in finishing date and weight, similar targeted carcass characteristics, and source verification information.
The growing number of larger cow/calf operations should be able to more easily provide buyers with larger groups of these more uniform cattle. Virginians and other Southeastern cow/calf operators face a more uphill battle due to their relatively smaller herd sizes.
For better than the last fifty years, commingled graded feeder cattle sales in the parts of the Southeast have attempted to package cattle with some visual uniformity. The time is upon us when cattle packaged by sex, weight, color, and feeder grade will simply fail to command bids in the upper price tier.
A couple of Virginia sales groups have taken steps to add value to their cattle by providing at least some sales for cattle with a documented vaccination program. One sales group offers a sale for cattle sired by bulls with minimums for growth EPD's. Increasingly, there are local groups of neighbors working together to offer load lots of cattle with a similar verified health program and receiving higher prices such as the Buckingham, Amelia, and Highland/Bath groups. Additionally, at least a couple of groups of neighbors have decided that to receive more nearly what their cattle are worth have joined together to retain ownership in their cattle all the way to the rail.
The pressure is on the Southeastern feeder cattle producer to help assemble uniform groups of feeder cattle with prescription health/performance/carcass packages. Fortunately, Virginia producers have a history of being able to work together as evidenced by the commingled graded feeder cattle sale. The task ahead is to carry that sense of cooperation with neighbors to higher levels and market truly value-added cattle.