Chapter 1: Historical Economic, Structural, and Competitive Trend Analysis

Missouri has more beef cows than any other state in America, except Texas. In 2002, cattle were raised on 68,000 of the state's 107,000 farms. Sales of cattle and calves generated cash receipts of $821 million, or 19% of the state's total farm cash receipts.¹ As those farm level revenues were spent for goods and services, more than $1.5 billion dollars worth of economic activity was created in the state, primarily in rural areas.²

Beef cattle have been and likely will continue to be the most prevalent agricultural enterprise in Missouri's economy. However, emerging marketing channels and innovations in technology in the beef industry will challenge Missouri's cattlemen in the future. This report examines the economic, structural, and competitive characteristics of Missouri's beef industry. It also includes the potential challenges and opportunities that appear on the horizon for Missouri's future cattle industry and the type of structure that will be needed to take advantage of these opportunities.

This audit identifies and describes opportunities for the Missouri beef industry to be successful. The three sections of the audit are as follows:

1. Analysis of the historical economic, structural, and competitive trends effecting the beef industry in Missouri during the past 20 years
2. Analysis of the current competitive position of Missouri's beef industry
3. Identification of systems, strategies, and economic opportunities available to the industry and to producers who are prepared to adapt to structural and competitive changes

1.1 Characteristics of Missouri's Beef Industry

Commercial beef cattle operations are organized in three basic ways: cow-calf, stocker, and fed cattle operations. In January 2004, 80% of Missouri's total cattle inventory was held by cow-calf operations, 15% of the inventory was held as stockers, and less than 2% of the inventory was cattle on feed. Dairy cattle made up the remainder.³

Table 1.1-1 Cattle and Calves in Missouri, Number on Farm, 2000-2004 4
Class	2000	2001	2002	2003	2004
	(Thousand head)
All Cattle & Calves	4,350	4,250	4,350	4,500	4,350
All Cows That Have Calved	2,220	2,220	2,200	2,250	2,250
Beef Cows	2,062	2,070	2,060	2,116	2,125
Milk Cows	158	150	140	134	125
Heifers-500 Pounds & Over	580	590	630	680	610
Beef Cow Replacements	250	285	280	305	280
Milk Cow Replacements	70	65	60	55	60
Other	260	240	290	320	270
Steers- 500 Pounds & Over	450	400	480	485	440
Bulls- 500 Pounds & Over	120	120	120	125	120
Calves Under 500 Pounds	980	920	920	960	930
Cattle and Calves on Feed 1/	100	65	70	70	65
1/ Also included in the classes above.

Missouri Cattle Flowchart

The Missouri cattle flowchart depicts a snapshot of the flow of cattle and calves from Missouri's farms into growing, finishing, and marketing channels, including how much money flows into the various support industries. USDA 2002 estimates form the backbone of this snapshot; however, differing estimation dates and derivation techniques may cause these estimates to be inconsistent with official estimates. Appendix A contains a copy of this flowchart and all the supporting references, derivations, and web links to the data sources.

1.1.1 Evolution as a Cow-Calf State

Over the last century, many Missouri farmers accepted off-farm jobs in addition to their farming activities. Beef cow-calf operations were manageable as small or part-time farms because they required relatively little labor except when hay feeding was necessary and during calving. Because cow-calf enterprises fit well with part-time farmers' available labor and management, Missouri grew as a cow-calf state.

As table 1.1.1-1 depicts, the states with the most beef cow operations are also the states with the most farms. States with large numbers of small farms such as Texas, Kentucky, Tennessee, and Oklahoma are also major beef cow states. Missouri ranks second in the nation in the number of farm operations and in the number of beef cow operations.

Like most of the other top ranking beef cow states, more than half of the farms in Missouri are beef cow operations. More than 90% of the beef cow operations in Missouri have less than 100 cows.

Missouri had 107,000 farms in 2002. Sixty-four percent, or 68,000 of those, had cattle (beef or dairy) on them. Eighty five percent of the cattle farms were beef cow operations, composing 58,000 of the 68,000 cattle farms.

Table 1.1.1-1 Comparing States with Large Numbers of Farms and Beef Operations5
State	U.S. rank in number of farms	U.S. rank in number of beef cow operations	Number of farms	Number of beef cow operations	Beef cow operations as a % of total farms	Beef cow operations with less than 100 cows as a % of total farms	Beef cow operations with less than 100 cows as a % of beef operations
TX	1	1	229,000	133,000	58%	53%	91%
MO	2	2	107,000	58,000	54%	51%	93%
IA	3	8	90,600	26,000	29%	26%	91%
TN	4	4	87,500	45,000	51%	50%	97%
KY	5	5	87,000	40,000	46%	44%	96%
OK	6	3	83,500	50,000	60%	55%	92%

Because of the pasture resources and the large number of small farms, Missouri has become a major producer of feeder calves. During the 20th century, Missouri's national importance as a feeder calf producer grew. In 1920, 3.2% of the beef cows in the United States were in Missouri (table 1.1.1-2). By the year 2000 Missouri cattlemen held 6.1% of the nation's cow herd.

Table 1.1.1-2 Comparisons of U.S. and Missouri Beef Cow Inventories6
Year	U.S. Beef Cows	Missouri Beef Cows	MO as % of U.S. Beef Cows
1920	12,525,000	395,000	3.2%
1930	9,162,000	338,000	3.7%
1940	10,676,000	429,000	4.0%
1950	16,743,000	594,000	3.5%
1960	26,344,000	1,135,000	4.3%
1970	36,689,600	1,910,000	5.2%
1980	37,107,400	2,278,000	6.1%
1990	32,454,700	1,914,000	5.9%
2000	33,575,000	2,062,000	6.1%

Location of Missouri's Beef Industry
Beef cows are located in all 114 counties in Missouri. The 10 counties with the highest populations of beef cows are concentrated in the southwest and south central regions of the state. The distribution of beef cows by Missouri counties is shown in Figure 1.1.1-1.

Figure 1.1.1-1 Beef Cow Numbers in Missouri Counties - January 1, 2003⁷

Trends in Beef Cow Locations in Missouri
Trends in the geographic distribution of beef cows in Missouri are illustrated in figure 1.1.1-2. Regions are those defined by the National Agricultural Statistics Service. Beef cow inventory decreased in all regions during the decade of the 1980's but from 1990 to 2000, cow numbers increased in seven out of the nine regions. The central region held the largest percentage of Missouri's beef cow inventory in 2000, with 22% of Missouri's total beef cow inventory.

Figure 1.1.1-2 Changes in Missouri Beef Cow Inventory, by Regions, 1980 to 2000⁸

During the decade of the 1980's, when low crop prices decreased overall farm profitability, cropping areas of the state lost more beef cows than did non-cropping areas. Northwest Missouri lost 29% (86,000 cows), North Central 21% (60,000 cows), Northeast 26% (46,000 cows), and Southeast 32% (12,000 cows). It should be noted, however, that the Southeast region began the 1980s with a relatively small herd of cattle. As the 10-year cattle cycle turned, calf prices moved higher in the late 1990s and overall farm profitability increased.

Central Missouri and South Central Missouri grew in cow numbers, with total inventory higher in 2000 than it was in 1980. Together the two regions contained more than 760,000 head of cattle, up 45,000 head from 1980. Much of the expansion in cow numbers in these areas may have been due to the availability of complementary enterprises. Complementary enterprises, such as contract poultry and hog operations, may have made cow-calf operations more economically viable by spreading overhead costs across enterprises.

The top ten Missouri beef cow counties in 2000 have shown some interesting trends in beef cow numbers since 1980. Although Texas County is currently the Missouri leader in beef cow numbers, it made a remarkable increase from 1990 to 1995 to gain the position it is in today. Conversely, Nodaway County had a major decrease in beef cow population from1980 to 1990. As depicted in figure 1.1.1-3 several of the top 10 counties show large changes in the 1990's.

Figure 1.1.1-3 Top 10 Beef Cow Counties in Missouri⁹

During the decade of the 1990's, several Missouri counties with large numbers of dairy cattle experienced a substitution of beef cows for dairy cows. Three counties in particular demonstrate this trend: Texas, Lawrence, and Barry Counties. These three counties are among the top ten dairy-producing and the top ten beef-producing counties in Missouri.

Figure 1.1.1-4 Shift from Dairy to Beef Cattle in Major Cattle Counties¹⁰

The U.S. and Missouri dairy industries are consolidating more rapidly into fewer, larger farms than are the U.S. and Missouri cow-calf industries. As dairy farmers discontinue their dairy operations, they may continue to operate their farms, but replace dairy cows with beef cows. One consequence of this substitution is a drop in gross income from approximately $2,000 per cow per year with dairy cows to approximately $500 per cow per year with beef cows. A corresponding drop in purchased inputs is another consequence of converting from dairy to beef. Unless other agricultural enterprises grow in these counties, the overall impact will be a decline in economic activity from this transition.

1.1.2 Changes in Beef Cow Inventory

Cattle inventory numbers in the U.S. and in Missouri tend to peak in roughly 10-year increments, causing low prices and liquidation until the stage is set for the next expansion phase of the 10-year cycle. Missouri's beef cow inventory has decreased 7% since 1980. In many respects, this decrease has mirrored the national trend (figure 1.1.2-1). Missouri's beef cow inventory during this period did, however, move independently from the U.S. beef cow inventory trend in two key areas. First, liquidation appeared to be more widespread in Missouri from 1980 to 1992 than it did in the nation as a whole. Small Missouri herds are typically one part of a diversified income portfolio that includes off-farm jobs or other agricultural enterprises. As such, it is feasible to liquidate and repopulate these beef herds as economic conditions dictate.

The second apparent departure from the national trend (2001 to present) is that Missouri's cattle inventory may be rebuilding while the national herd is still in liquidation mode. Beef prices have been favorable for expansion since 1999. However, persistent drought in the Great Plains and parts of the Midwest has forestalled a national increase in beef cow numbers. By contrast, adequate forage availability and relatively low feed prices across most of Missouri have mitigated in favor of beef herd expansion.

Figure 1.1.2-1 Change in Beef Cow Inventory since 1980¹¹

1.1.3 Ten-Year Cattle Cycle

The U.S. cattle cycle tends to move in a decade-long pattern of price variation that has its basis in producer's response to price signals. The simplest explanation is that cow-calf producers tend to act as if the current calf prices will continue into the future. When cattle prices are high, beef producers respond by retaining heifer calves to use as replacements, in the hope that a larger herd will result in a larger income. This is the case even though the financial reward for retaining heifers can be two to three years away and current market revenues from the sale of heifers will be sacrificed. The net effect is as the number of beef cows increases nationally, the number of slaughter cattle produced consequently increases. As a result, prices are depressed as demand for beef cattle and beef products exceeds supply. As beef cattle prices decline below break-even levels, beef producers respond by reducing herd size or liquidating to minimize losses.

Figure 1.1.3-1 U.S. Cattle Cycle¹²

A corollary explanation is that cash flow needs drive heifer retention and thus herd expansion. When cattle prices are low, beef producers must sell proportionally more of their heifer crop in order to meet cash flow obligations. The net effect is that the number of heifers available for use as replacements is limited and herd size remains static or contracts. As prices increase, fewer total calves must be sold to meet cash flow obligations. Beef producers respond by retaining a larger proportion of the heifer calves they produce to use as replacements. Herds are once again positioned to expand production.¹³ It is likely that the price cyclicity typical of the beef industry results from a combination of producer attitudes toward cattle prices and the need to meet cash-flow obligations.

Figure 1.1.3-2 depicts two decades of cattle prices and inventories in Missouri and demonstrates the manner in which cattle owners respond to price cyclicity. Worthy of note is that the top of the 10-year price cycle in 1990 coincided with the trough of the inventory cycle. Ten years later in 2001, another price peak coincided with a relatively low cow inventory.

Figure 1.1.3-2 Missouri Cattle Cycle¹⁴

Beef cow inventories in states surrounding Missouri are shown in table 1.1.3-1. All states, including Missouri, reduced beef cow inventory between 1980 and 1990. Conversely, only Iowa and Illinois lost inventory between 1990 and 2000.

Between 1980 and 1990, the U.S. lost 13% of its cow herd while Missouri lost 16%. Even larger decreases were reported in major cropping states (Iowa, -36%; Illinois, -29%; and Kansas, -21%).

Table 1.1.3-3 Changes in Beef Cow Inventory15
State	Thousand Head			Percent Change
	1980	1990	2000	Beef Cows 1980-90	Beef Cows 1990-00
Missouri	2,278	1,914	2,062	16% decrease	8% increase
Iowa	1,751	1,115	1,025	36% decrease	8% decrease
Illinois	699	493	480	29% decrease	3% decrease
Kentucky	1,106	1,045	1,050	6% decrease	1% increase
Tennessee	948	1,010	1,034	7% increase	2% increase
Arkansas	1,079	901	928	16% decrease	3% increase
Oklahoma	2,161	1,860	1,898	14% decrease	2% increase
Kansas	1,716	1,362	1,492	21% decrease	10% increase
Nebraska	1,950	1,760	1,974	10% decrease	12% increase
Texas	5,585	5,110	5,430	9% decrease	6% increase
U.S.	37,107.4	32,454.7	33,575	13% decrease	3% increase

Major grain producing states tend to decrease cattle numbers the fastest when beef cattle prices are unfavorable and are among the slowest to increase inventory when prices are strong. Within Missouri, the same phenomenon can be observed among counties. Those that produce the most grain also decreased cattle numbers the most during the 1980's and increased cattle inventories the least during the 1990's. With each passing decade, producers become more specialized. Crop farmers concentrate more on crops. Cattlemen focus more on cattle. Because cattlemen are more attuned to the rhythms of the commodity cycle of their particular industry, they may respond the fastest to price incentives.

1.1.4 Top Beef Cow States

Figure 1.1.4-1 compares the number of beef cows in the top 10 cow-calf states and the states surrounding Missouri. Texas controls more than twice the beef cow inventory of any other state. Missouri, Oklahoma, Nebraska, and South Dakota closely compete with one another for the number two position.

Figure 1.1.4-1 Top Ten Beef Cow Inventory and Missouri's Surrounding States, 2004¹⁶

Figure 1.1.4-2 Top Five Beef Cow States in the United States from 1980 to 2000¹⁷

Figure 1.1.4-2 depicts the trend in cow numbers for the top five beef states from 1980 to 2000. Over the period, Texas maintained a considerable lead when compared with other states. Beef cow numbers in Missouri, Nebraska, Oklahoma, and South Dakota fluctuated moderately as the industry moved through price cycles.

1.1.5 Cattle Shipments from Missouri

Shipments of cattle into and out of Missouri by state are detailed in table 1.1.5-1.¹⁸ The USDA database is not complete because some major cattle feeding states do not record shipments from Missouri. For example, transshipments between Missouri, Nebraska, and Oklahoma are not reported in this database. However, the table below does reflect the magnitude of the cattle trade with other leading cattle states. These flows represent dairy cattle as well as beef cattle.

Table 1.1.5-1 Flow of cattle in and out of Missouri
Inshipments		Outshipments
State	# of Head	State	# of Head
Iowa	18,186	Kansas	369,419
Mississippi	16,713	Iowa	147,562
Illinois	14,466	Texas	73,000
Kansas	14,300	Illinois	27,368
Arkansas	11,308	Colorado	21,890
Alabama	7,580	South Dakota	5,163
Texas	7,000	Idaho	3,196
Wisconsin	4,164	California	2,693
Georgia	1,967	Georgia	1,979
South Dakota	1,220	Arkansas	1,834

1.2 Stocker Inventory

USDA's National Agricultural Statistics Service collects no direct information regarding the number of stocker calves grown in Missouri. Table 1.2.1-1 estimates the number of stockers that Missouri has had on inventory on January 1, 1980-2004.

1.2.1 Missouri Stocker Inventory

The following estimate is derived by taking the inventory of steers and heifers over 500 pounds, as reported by USDA, and subtracting the number of cattle already known to be in feedlot inventory. The assumption is that all calves over 500 pounds that are not kept for breeding or that are not in feedlots are stocker cattle. These animals may be on pasture or drylot. Between 1980 and 2004, the number of stocker calves in Missouri varied between 490,000 head and 735,000 head.

Table 1.2.1-1 Missouri Stocker Inventory 1980-200419
Year	Heifers 500+ lbs.-other	+ Steers 500+ lbs.	- All Cattle on Feed	= Stocker Supply
	(1,000 Head)	(1,000 Head)	(1,000 Head)	(1,000 Head)
1980	224	564	120	668
1981	236	583	105	714
1982	214	567	90	691
1983	217	580	100	697
1984	231	568	90	709
1985	238	490	90	638
1986	221	533	85	669
1987	182	480	90	572
1988	180	460	110	530
1989	215	440	95	560
1990	230	460	90	600
1991	190	430	105	515
1992	200	380	90	490
1993	205	425	105	525
1994	230	460	120	570
1995	235	470	70	635
1996	255	475	100	630
1997	260	490	95	655
1998	250	480	100	630
1999	260	510	105	665
2000	260	450	100	610
2001	240	400	85	555
2002	290	480	70	700
2003	320	485	70	735
2004	270	440	65	645

1.2.2 Stocker Inventory Trends for Missouri and Surrounding States

Other state stocker inventories are shown in figure 1.2.2-1 and 1.2.2-2. Presently, the top three states in terms of stocker inventory are Kansas, Nebraska, and Oklahoma. Over the last 20 years, the stocker business in Iowa has contracted significantly. After an initial decline, Nebraska stocker numbers sharply increased to place it among the top three stocker states. Other major stocker states (Tennessee, Kentucky, Illinois, and Missouri) have had relatively stable stocker inventories over the 24-year period.

Figure 1.2.2-1 Stocker Inventory for Missouri, Iowa, Oklahoma, Nebraska, and Kansas

Figure 1.2.2-2 Stocker Inventory for Tennessee, Kentucky, Arkansas, and Illinois

1.2.3 Pastureland Potential Annual Stocking Rates by Missouri County

Using the 2002 Census of Agriculture statistics for county-by-county pasture acreage and for beef cow inventories, an overall potential annual stocking rate by county was estimated. Table 1.2.3-1 derives a total potential annual stocking rate, by county, for all Missouri counties. Each county's pasture acreage was separated into cropland pasture, woodland pasture, and rangeland pasture to further delineate pasture quality.

Table 1.2.3-1 Potential Annual Stocking Rates for Missouri Counties
Counties	2002	2002	2002	2002	2002
	Cropland Used Only For Pasture Or Grazing	Woodland Pastured	Pastureland And Rangeland Other Than Cropland And Woodland Pastured	Beef Cow Inventory	Potential Annual Pastureland, All Types-Stocking Rate (acres/cow/year)
Adair	43,804	12,932	61,548	21,700	5.45
Andrew	23,723	6,019	24,340	11,000	4.92
Atchison	14,195	3,278	14,311	7,800	4.07
Audrain	24,793	9,797	24,526	12,900	4.58
Barry	72,925	45,407	84,354	42,500	4.77
Barton	30,935	10,343	53,681	22,800	4.16
Bates	68,898	15,393	98,268	42,000	4.35
Benton	39,848	45,385	61,526	20,500	7.16
Bollinger	32,681	30,476	28,936	18,400	5.01
Boone	35,463	16,245	39,975	18,500	4.96
Buchanan	17,338	5,086	22,136	9,500	4.69
Butler	10,152	7,612	10,357	6,000	4.69
Caldwell	35,157	8,651	32,363	13,000	5.86
Callaway	46,584	23,924	55,158	24,700	5.09
Camden	40,530	48,264	33,513	15,300	7.99
Cape Girardeau	38,316	11,768	19,310	19,100	3.63
Carroll	32,832	8,639	33,614	14,500	5.18
Carter	11,348	15,880	15,533	5,100	8.38
Cass	44,863	9,497	54,540	25,500	4.27
Cedar	48,753	27,683	63,970	24,700	5.68
Chariton	44,064	8,418	38,567	17,900	5.09
Christian	61,541	24,764	42,238	26,600	4.83
Clark	24,136	14,785	26,785	9,900	6.64
Clay	16,018	3,368	35,377	10,500	5.22
Clinton	29,981	5,181	41,659	16,500	4.66
Cole	32,722	30,676	32,275	20,500	4.67
Cooper	37,111	21,308	35,277	20,800	4.50
Crawford	45,462	30,153	47,045	14,500	8.46
Dade	56,929	23,156	86,779	33,000	5.06
Dallas	54,241	39,800	46,105	23,200	6.04
Daviess	29,463	14,673	47,639	15,500	5.92
DeKalb	34,592	7,586	35,026	16,000	4.83
Dent	48,980	30,658	51,727	19,500	6.74
Douglas	72,765	53,436	90,864	26,200	8.28
Dunklin	3,203	1,413	1,111	1,100	5.21
Franklin	46,906	23,418	34,292	21,000	4.98
Gasconade	33,673	27,938	26,712	14,000	6.31
Gentry	47,703	6,684	44,383	18,000	5.49
Greene	70,367	25,972	61,808	37,500	4.22
Grundy	27,157	7,117	23,569	11,000	5.26
Harrison	56,374	11,857	76,126	26,500	5.45
Henry	53,442	12,147	77,883	28,300	5.07
Hickory	26,370	33,312	36,035	15,900	6.02
Holt	11,863	4,288	9,810	5,700	4.55
Howard	42,813	20,869	36,715	14,800	6.78
Howell	82,954	48,037	120,429	39,300	6.40
Iron	12,518	10,000	11,938	5,100	6.76
Jackson	10,760	3,449	24,457	5,500	7.03
Jasper	39,378	14,564	78,284	26,500	4.99
Jefferson	18,992	18,057	17,644	6,000	9.12
Johnson	60,741	18,309	89,951	36,500	4.63
Knox	25,415	10,090	32,863	14,800	4.62
Laclede	70,675	56,335	67,426	29,000	6.70
Lafayette	25,913	9,366	33,099	18,000	3.80
Lawrence	65,584	24,766	75,496	43,500	3.81
Lewis	23,793	13,026	27,634	7,700	8.37
Lincoln	24,150	13,860	17,411	10,600	5.23
Linn	61,525	9,702	49,246	26,500	4.55
Livingston	26,097	8,212	31,359	10,700	6.14
Macon	55,944	23,583	82,301	24,500	6.61
Madison	20,195	15,494	17,575	9,700	5.49
Maries	46,935	43,149	47,789	22,800	6.05
Marion	13,581	10,992	20,663	10,500	4.31
McDonald	40,247	36,631	57,723	27,000	4.99
Mercer	39,884	9,556	36,751	14,200	6.07
Miller	51,866	63,073	48,367	29,500	5.54
Mississippi	1,738	268	1,680	1,200	3.07
Moniteau	48,585	28,115	42,929	28,000	4.27
Monroe	29,703	14,499	37,285	19,000	4.29
Montgomery	18,785	16,267	22,661	10,500	5.50
Morgan	39,043	26,745	43,481	21,500	5.08
New Madrid	1,474	58	693	600	3.71
Newton	56,608	26,788	66,574	35,000	4.28
Nodaway	75,796	9,049	64,613	36,000	4.15
Oregon	45,889	29,431	77,503	24,500	6.24
Osage	47,699	66,417	65,657	31,000	5.80
Ozark	45,783	32,811	116,261	22,800	8.55
Pemiscot	1,114	703	1,584	300	11.34
Perry	26,342	17,645	19,451	14,000	4.53
Pettis	56,207	20,845	62,043	27,500	5.06
Phelps	39,151	32,943	51,803	17,500	7.08
Pike	34,744	23,172	31,449	14,200	6.29
Platte	15,533	5490	15,567	8,000	4.57
Polk	95,567	50,178	88,600	45,500	5.15
Pulaski	34,684	33,928	28,834	13,000	7.50
Putnam	44,866	19,024	80,795	22,200	6.52
Ralls	18,233	11,744	22,241	9,400	5.56
Randolph	27,884	15,461	41,163	14,500	5.83
Ray	33,101	12,497	41,124	16,500	5.26
Reynolds	22,661	11,164	13,770	6,000	7.93
Ripley	24,725	24,187	26,497	11,000	6.86
Saline	27,558	14,486	28,491	18,500	3.81
Schuyler	32,158	6,301	37,365	13,800	5.49
Scotland	23,904	7,872	31,050	10,200	6.16
Scott	7,369	2,507	5,154	3,900	3.85
Shannon	35,239	27,751	19,172	11,900	6.89
Shelby	22,743	9,539	23,853	11,400	4.92
St. Charles	7,143	4,006	7,311	4,000	4.62
St. Clair	39,248	34,274	52,042	26,000	4.83
St. Francois	25,619	15,424	20,474	12,000	5.13
St. Louis	2,090	1,311	1,924	700	7.61
Ste. Genevieve	25,298	19,033	20,206	12,100	5.33
Stoddard	14,492	3,586	10,844	6,800	4.25
Stone	27,348	17,543	40,142	15,600	5.45
Sullivan	68,671	16,549	93,221	29,500	6.05
Taney	27,048	41,904	47,591	13,500	8.63
Texas	91,060	65,203	137,334	45,500	6.45
Vernon	49,187	18,552	94,227	30,500	5.31
Warren	10,968	8,115	9,509	6,200	4.61
Washington	28,393	19,688	21,700	9,400	7.42
Wayne	15,569	11,297	14,259	7,000	5.88
Webster	75,797	44,594	67,222	26,000	7.22
Worth	22,087	4,817	25,710	11,500	4.58
Wright	75,509	51,956	75,207	26,500	7.65
State Total	4,178,574	2,281,064	4,854,438	2,060,000	5.49

The number of potential beef cows stocked per acre varies tremendously across Missouri counties. However, there are some interesting differences in the top five cattle counties, as shown in table 1.2.3-2. Lawrence County, with a beef cow population of 43,500, had the lowest potential stocking rate (fewest number of acres needed per cow) in the top five cattle counties at 3.81 acres per cow. Lawrence and Barry Counties are major poultry producing counties. The ready availability of poultry litter for use as a pasture fertilizer contributed to greater than normal forage production and permitted their relatively low potential annual stocking rates.

Table 1.2.3-2 Beef Cattle Potential Annual Stocking Rates in Top 5 Counties (2002)
County	Beef Cow Inventory	Potential Annual Pastureland, All Types- Stocking Rate (acres/cow/year)
Texas	45,500	6.45
Polk	45,500	5.15
Barry	42,500	4.77
Bates	42,000	4.35
Lawrence	43,500	3.81

1.3 Beef Cow Operations in Missouri

Thousands of small cattle herd operations control more than 40% of Missouri's cattle inventory. This characteristic has implications for technology adoption and for market channel innovation for Missouri feeder calf producers. Section 1.3.1 compares the size of Missouri cattle operations verses the number of cattle controlled by that particular demographic group. In section 1.3.2, the same contrasts are highlighted for the U.S.

1.3.1 Missouri Beef Cow Operations and Inventory

Almost 80% of the beef operations in Missouri have less than 50 head of cattle. These operations hold 41% of the cattle in the state. Beef operations with 50 to 99 head of cattle account for only 15% of the cattle operations but they hold 26% of the cattle inventory. Combined, these two categories comprise 94% of all of the beef operations in the state and they hold 67% of the inventory.

Table 1.3.1-1 Missouri Beef Cattle Operations, by Size & Inventory, January 1, 200220
Classification	1-49 Head	50-99 Head	100-499 Head	500 Head & Over
Number of Operations	46,000	8,200	3,700	100
Percent of Operations	79%	14%	6%	0.2%
Percent of Inventory	42%	26%	28%	4%

Operations with 100 to 499 head of cattle make up 6% of the farms but they represent 28% of the cattle. Beef operations in Missouri with more than 500 head in inventory make up less than 0.2% of the total number of operations and control about 4% of the inventory.

Figure 1.3.1-1 Comparison between Missouri Beef Cattle Inventory and Missouri Beef Cattle Operations in 2003 (January 1 Inventory)²¹

1.3.2 U.S Beef Cow Operations and Inventory

The demographic trends in U.S. beef cow operations and their inventory follow closely those in Missouri. Beef cow operations with an inventory from 1 to 49 head represent 78.3% of the total number of beef cow operations in the country. Collectively, they own 29.2% of the U.S. beef cow inventory. The largest percentage of inventory (37.5%) comes from beef cow producers with herd sizes between 100-499 head.

Figure 1.3.2-1 Comparisons between U.S. Beef Cattle Inventory and U.S. Beef Cattle Operations in 2003 (January 1 Inventory)²²

1.3.3 U.S. Beef Production per Head

The amount of beef produced per harvested calf in the U.S. has trended strongly upward during the last 30 years (figure 1.3.3-1). Beef production per harvested animal is calculated by dividing annual commercial beef production by annual commercial cattle slaughter.

Figure 1.3.3-1 Commercial Beef Production per Harvested Calf in the United States²³

1.3.4 U.S. Beef Production per Head and U.S. Beef Cow Inventory

As beef production efficiency has increased over the last 20 years, the U.S. beef cow inventory has generally decreased. Figure 1.3.4-1 shows the beef production per beef cow in the U.S. from 1980 to 2003. If this trend continues in the future, there may be a marked decrease in the physical feedlot space required to fulfill domestic and export demand for beef. Reduced demand for feedlot space will put pressure on lower efficiency feedlots initially as they compete for animals. Ultimately, a continuation of this trend will have downside pressure on prices encouraging larger and more efficient operations.

Figure 1.3.4-1 Commercial Beef Production per U.S. Beef Cow²⁴

Figure 1.3.4-2 U.S. Commercial Beef Production per Head vs. Beef Cow Inventory ²⁵

¹ Missouri Agricultural Statistics Service, Farm Facts 2003, http://agebb.missouri.edu/mass/index.htm
² Economic analysis using cash receipts estimates from USDA ERS and multipliers specific to Missouri’s cattle industry derived from IMPLAN social accounting software.
³ Inventory in cow-calf operations included beef cows, calves under 500 pounds, beef cow replacements, and bulls 500 pounds and over. Stockers included other heifers, steers over 500 pounds minus cattle on feed.
⁴ USDA, National Agricultural Statistics Service http://agebb.missouri.edu/mass/index.htm. Cattle Reports, Jan 1 Inventory, 2000 thru 2004.
⁵ USDA, NASS. Agricultural Statistics Database, Online. 2002 data.
⁶ Livestock Marketing Information Center. January 1 Cattle Inventory
⁷ Missouri Agricultural Statistics Service. Farm Facts
⁸ USDA, NASS
⁹ USDA, NASS
¹⁰ USDA, NASS
¹¹ Livestock Marketing Information Center
¹² USDA, ERS. Livestock, Dairy and Poultry Situation and Outlook and USDA, NASS
¹³ Lawrence, John D, "Profiting from the Cattle Cycle: Alternative Cow Herd Investment Strategies." A.S. Leaflet R, Iowa State University.
¹⁴ Missouri Agricultural Statistics Service, Farm Facts
¹⁵ Livestock Marketing Information Center
¹⁶ USDA, NASS. January 1 Inventory, 2004
¹⁷ USDA, NASS
¹⁸ USDA, Economic Research Service (ERS). Interstate Livestock Movements: http://www.ers.usda.gov/data/interstatelivestockmovements/dataQandA.htm
¹⁹ USDA, NASS. Jan 1 Inventory Report and Cattle on Feed Report
²⁰ USDA, NASS
²¹ USDA, NASS
²² USDA, NASS
²³ USDA, Livestock Annual Summary
²⁴ USDA, NASS
²⁵ USDA, NASS