Market Group Likes The Look
Of Two Government Reports

KANSAS CITY, MO. — Given the level of concern within the cattle industry over increasing concentration, the Livestock Marketing Association is hailing a pair of recent government reports showing that two vital sectors of the industry are bucking that trend.

"Change in U.S. Livestock Production, 1969-92," was prepared by USDA’s Economic Research Service. While noting that "fed cattle and broiler production were the most highly concentrated livestock sectors" during the period under review, the report affirms that concentration within the feeder cattle segment "remained well below that of other livestock sectors, as production remained spread throughout much of the country."

The second report, "Beef '97," was prepared by USDA’s National Animal Health Monitoring System. It found that 85 percent of cow-calf operations used livestock auctions to sell most of their cattle in 1996.

"These reports confirm what our member markets across the country see every day: feeder cattle and cow-calf production are still in the hands of the independent producer, and that's good news for the entire industry," says LMA President William E. Irons Jr.

The feeder cattle report found "few incentives for intensive confined production," which has helped keep feeder production "much less concentrated than production in other sectors."

Compared with output in other industry sectors, the report continued, feeder cattle production "changed little between 1969 and 1992." It found that average herd size "remained around 40 head during the period."

These smaller producers, Irons says, "remain the backbone of our industry. Their checkoff dollars, collected primarily by the nation's livestock markets, are essential to our beef promotion, research and education programs."

The cow-calf study also found that for each of seven individual classes of cattle sold, a high proportion of cow-calf operations (ranging from 61.5 to 91.8 percent) used auctions as their primary marketing method.

The seven classes were weaned steers; weaned heifers intended for breeding; weaned heifers intended for slaughter; cows intended for breeding; cows intended for slaughter; weaned bulls intended for breeding, and weaned bulls going to slaughter.

"Beef '97" surveyed 2713 producers from 23 states. These states, USDA said, represented 85.7 percent of U.S. beef cows on Jan. 1, 1997, and 77.6 percent of U.S. beef operations.

That auction markets were the overwhelming choice of cow-calf operators didn't surprise Irons. "That's because these cattlemen know that competition is the best way to get the best price for their livestock. We're proud to have them as customers, and we salute their vital and continuing role in the industry," he says.

"Beef '97" was designed to provide information on the nation's cow-calf operations for education and research, USDA said.

Irons says the marketing group remains concerned about concentration in the packing sector and in fed cattle production, but adds that "these studies are encouraging for all of us who are working to maintain a competitive livestock economy."