“Reports of my death are greatly exaggerated,” wrote Mark Twain to the editor of the New York Journal in 1897 after he learned some media had mistaken a cousin for Twain himself and reported he had died. Today, that same gallows humor might apply to the U.S. livestock industry. To be sure, the livestock sector has been under siege in recent years from high feed costs, radical anti-animal agriculture zealots, environmental regulation run amuck and retail food industry giants dictating production methods such as the use of cages in the poultry industry or gestation stalls in the swine industry. But is the livestock industry dying? No. It’s merely evolving and consolidating. And yes, there is some cannibalizing among the different classes of livestock, as per capita consumption changes are definitely not equally distributed among beef, pork, poultry, eggs and milk.
Beef production has declined by 8.2 percent since 2003, but pork output is up 21 percent and that’s enough to score a 4.1 percent gain in total red meat production from 2003 through 2014, if forecasts hold up.
Broiler production has risen 13.1 percent and turkey production is up by 10.7 percent; for a combined 17.3 percent gain in total poultry production. So, total red meat and poultry production is up a combined 10.1 percent. That’s actually a bit in excess of the growth in U.S. population over that same period, which is estimated at 318.4 million for 2014, up 9.8 percent from 290.1 million in 2013.
But wait a minute!
In short, there have been gainers and losers among the livestock classes in consumption per person the past decade but the boom is in U.S. exports. Total red meat and poultry production has managed to climb by 10.1 percent even though per capita consumption has declined, because red meat and poultry exports are forecast at 16.1 billion lbs. for 2014 versus just 9.7 billion in 2003, up 66 percent.
It’s good news for agriculture suppliers to the livestock sector in the sense that output among all classes combined has risen even faster than the U.S. population. What may be surprising is that the number of farm operations in the U.S. has actually gone up from 2003 and average farm size, down a bit. That defies the conventional wisdom that the longstanding “megatrend” of bigger farms with fewer farmers is still in play.
But if the products or services sold to the livestock industry hinge more heavily on the number of separate operations than volume of production, it’s not good news. The number of farms with livestock dropped from 1.966 million in 2003 to 1.770 million in 2012, a 10 percent decline and 196,000 fewer livestock operations.
Even the changing mix of farms by farm size might surprise many in agriculture. It’s probably not a surprise that the fastest-growing sector is farms with annual sales of $500,000 and up. But it will be a surprise to many readers that the only other class growing in number is the class of smaller-sized farms with average sales in the $10,000-$99,000 range, up fractionally since 2003. It’s certain there have been dramatic changes in the mix of operations within each class of livestock by annual output per farm.
Editor’s Note: Dan Manternach is Ag Services Director for Doane Advisory Services.