Chapter 2: Current Competitive Position of Missouri’s Beef Industry

Missouri’s apparent comparative advantage in feeder calf production may be partially explained by a cost advantage in purchasing the major inputs of production: land, pasture rent, real estate taxes, corn, hay, and farm labor.

2.1 Cost of Production

As a transition state from the Corn Belt to the Great Plains, Missouri exhibits lower land costs, lower pasture rental rates, and lower property tax rates than other Corn Belt states. In addition, because Missouri is near major feed grain producing areas, corn and feed prices tend to be lower in Missouri than in areas further south or west.

2.1.1 Farm Real Estate Values

The cost of farm real estate is critical to the overhead cost associated with hay and pasture. Missouri farmland is less expensive than land in most of the states to the east, and more expensive than most of the states to the west. The average value per acre of farm real estate is shown in figure 2.1.1-1.

Figure 2.1.1-1 Farm Real Estate: Average Value per Acre, by State, Jan. 1, 2003²⁶

²⁶USDA, NASS

2.1.2 Pastureland Value

Pastureland values as of 2003 for the United States are shown in figure 2.1.2-1. The land value for each state varies, mainly due to location, land productivity, and pressure from alternative uses. Missouri currently has an average pastureland value of $1,100 per acre, significantly above the pastureland values in states to the west and north of Missouri. The cost of the pastureland as a feed resource for beef cow enterprises depends upon both the cost of the land and upon how many acres of pasture have to be purchased or rented to support a beef cow.

Figure 2.1.2-1 Pasture: Average Value per Acre on Jan. 1, 2003²⁷

²⁷USDA, NASS

2.1.3 Pastureland Cash Rent

Pasture rental rates for each state in 2003 are compared in figure 2.1.3-1. In 2002, Missouri had an average rental rate of $23.50 per acre for pastureland. It is important to note that pasture rental rates in different regions of Missouri varied by as much as 50%, (see figure 2.1.3-2). The range went from a high of $26.50 in Central Missouri to a low of $17.50 in South Central Missouri. These rates reflected the relative scarcity of rental pasture and also the productivity of the pastureland and its value to the lessee.

Figure 2.1.3-1 Pasture Rented for Cash: Avg. Cash Rent Per Acre, by State, 2003²⁸

Figure 2.1.3-2 Pasture Cash Rent Per Acre, Missouri, By District, 2003²⁹

²⁸USDA, NASS
²⁹Missouri Agricultural Statistics Service, Farm Facts

2.1.4 Agricultural Real Estate Taxes

Average real estate tax rates for the United States are shown in figure 2.1.4-1. Missouri real estate tax rates were much lower than tax rates on the coasts, the northeast, the southeast, and much of Corn Belt. Missouri had agricultural real estate taxes that were comparable with the Great Plains states.

Figure 2.1.4-1 Average Agricultural Real Estate Taxes $/Acre in 1995³⁰

³⁰ USDA, ERS. Agricultural Real Estate Tax Survey data.

2.1.5 Corn Prices

The price of corn is a major component of the cost of cattle feeding. The corn basis price is the difference in price between a local bid price for corn and the nearby corn futures contract at the Chicago Board of Trade. Spatial maps of corn basis prices reflect the regional supply and demand differences for corn at any given moment. During harvest season, major corn producing areas show a depression in corn prices as storage elevators lower their harvest time bid as they fill with corn. The gradually rising basis throughout the year reflects the elevator’s recapture of storage costs as they gradually sell corn to users. Figure 2.1.5-1 depicts the corn price basis across most of the U.S. Corn Belt. Corn prices move higher as one moves farther south (i.e., along the Mississippi River) and west from the Corn Belt.

Figure 2.1.5-1 Seasonal Corn Price Basis Maps,³¹

³¹ Derived from Montana State University, Extension Agricultural Marketing, Spatial Basis Report http://www.montana.edu/extensionecon/Marketing/spatial.html

2.1.6 Hay Production and Prices

Missouri is a major hay producing state, harvesting between 3.6 and 4 million acres of hay annually in recent years. Approximately 10% of Missouri hay is alfalfa; most of the rest is tall fescue or mixed grass-legume hay containing fescue. Most hay is not sold on the open market but is instead used on-farm.

The prices in table 2.1.6-1 reflect market prices but may overestimate the value of hay used on-farm. It is important to note that a significant part of the prices reported in table 2.1.6-1 reflect transportation costs. Reports of large round bales of tall fescue trading in the $35 to $45 per ton at harvest are common in Missouri. When reviewing nationwide hay markets, few states report hay prices lower than Missouri’s. The exception is the gulf coast region where coastal Bermuda grass is often priced lower than tall fescue.³² Hay production is distributed throughout Missouri. However, there are significant concentrations of counties in the southwest and central parts of the state where hay production exceeds 60,000 tons annually (figure 2.1.6-1). These areas of the state also tend to have the greatest concentrations of beef cows.

Table 2.1.6-1 Average Prices Received by Farmers, Missouri, 1999-2003³³

Commodity	1999	2000	2001	2002	2003
All Hay	$72	$70.50	$75	$67.50	$66.50
Alfalfa Hay	$107	$105	$107	$111	$105
All Other Hay	$64	$63	$62.50	$54	$49.50

Figure 2.1.6-1 Missouri Hay Production, By County, in 2002³⁴

³²Missouri Agricultural Statistics Service, Farm Facts
³³USDA, NASS
³⁴Missouri Agricultural Statistics Service, Farm Facts

2.1.7 Farm Labor

Farm labor wages in Missouri have risen strongly in recent years, reflecting a national trend. Wages tended to be near national farm labor wage rate averages. In the five-year period of 1999 to 2003, the price of livestock labor in Missouri and Iowa increased from $7.35 per hour to $9.83 an hour. This $2.48 per hour increase equates to a 34% rise in labor costs or growth at an annual compound rate of 6%.

Table 2.1.7-1 Farm Labor and Wage Rates, Missouri and Iowa, 1999-2003³⁵

Year & Month	Number of Hired Workers	Hours Worked per Hired Worker	Field Hired Workers	Livestock Hired Worker	Combined Hired Workers 2/	All Hired Workers Hourly Rate 3/
	(Thousand)		(Dollars per hour)
1999
January	16	29.9	$7.36	$7.35	$7.35	$7.86
April	24	37.0	$7.02	$8.54	$8.07	$8.27
July	30	34.4	$7.22	$8.07	$7.58	$7.90
October	26	43.1	$7.85	$7.86	$7.85	$8.17
2000
January	19	41.1	$7.31	$7.87	$7.80	$8.13
April	23	37.7	$7.56	$8.18	$7.88	$8.08
July	30	34.7	$7.62	$8.63	$8.00	$8.39
October	31	37.3	$7.41	$8.19	$7.72	$7.90
2001
January	14	37.3	$7.86	$8.61	$8.49	$9.05
April	21	37.5	$8.19	$8.55	$8.41	$8.80
July	29	35.7	$7.80	$8.08	$7.94	$8.10
October	41	34.4	$8.06	$9.26	$8.52	$8.78
2002
January	24	33.5	$8.62	$9.41	$9.26	$9.74
April	27	32.5	$7.84	$9.82	$8.89	$9.34
July	30	32.1	$8.42	$10.72	$8.94	$9.20
October	25	34.7	$8.69	$8.30	$8.59	$8.81
2003
January	20	27.2	$9.24	$9.01	$9.08	$9.50
April	24	36.6	$9.94	$10.00	$9.97	$10.71
July	23	36.7	$9.60	$8.87	$9.31	$9.51
October	26	42.6	$8.62	$9.83	$8.87	$9.30
2004
January	19	33.0	$9.12	$9.79	$9.50	$10.15
April	28	33.7	$9.04	$9.03	$9.04	$9.48
1/ Missouri and Iowa combined. No individual state estimates are available
2/ Field and livestock workers combined
3/ Includes supervisory and other types of workers along with the field and livestock workers

³⁵USDA, NASS. Farm Labor

2.1.8 Nationwide Cost and Return Comparison

The USDA’s Economic Research Service estimates regional differences in costs and returns for cow-calf producers using data collected through its Agricultural Resource Management Surveys. The most recent summary of costs and returns for cow-calf operations was completed using 1996 data.³⁶ Between survey years, the USDA uses the baseline survey data to project annual commodity costs and returns.

Rather than use state or political boundaries to categorize regions, the Economic Research Service has delineated regions of the country that have similar resource endowments and management patterns. These farm resource regions, which are depicted in figure 2.1.8-1, are not necessarily contiguous.³⁷

Missouri contains two of these regions: Heartland and Eastern Upland. The Eastern Upland region is concentrated in the southwest and south central regions of Missouri, roughly corresponding to the portion of the state that lies south of US Highway 50. The Heartland region covers the rest of the state. Table 2.1.8-1³⁸ and section 2.1.9 describe the cow-calf production costs and returns by these farm resource regions. Information concerning the Northern Crescent and Southern Seaboard regions for cow-calf costs and returns is not available.

Figure 2.1.8-1 USDA-ERS, Farm Resource Regions

³⁶Characteristics and Production Costs of US Cow Calf Operations, USDA Statistical Bulletin Number 974-3 http://www.ers.usda.gov/publications/sb974-3/sb974-3.pdf
³⁷USDA, ERS. Farm Resource Regions http://www.ers.usda.gov/Emphases/Harmony/issues/resourceregions/resourceregions.htm#new
³⁸USDA, ERS. Commodity Costs and Returns, Cow-Calf Data http://www.ers.usda.gov/Data/CostsAndReturns/testpick.htm

Table 2.1.8-1 Cow-Calf Production Costs and Returns per Bred Cow, 2002

			USDA-ERS Farm Resource Region
	Item	United States	Heartland	Northern Great Plains	Prairie Gateway	Eastern Uplands	Fruitful Rim	Basin and Range	Mississippi Portal
A		2002	2002	2002	2002	2002	2002	2002	2002
		dollars per bred cow
	Gross value of production:
	Steer calves	145.49	171.57	149.17	156.77	128.39	81.26	154.52	121.93
	Heifer calves	90.45	115.34	92.34	85.03	102.45	56.13	96.42	104.45
	Yearling steers	95.20	34.95	112.41	133.85	51.27	55.20	132.65	69.02
	Yearling heifers	41.17	10.80	32.48	70.47	22.72	21.88	57.79	17.43
	Other cattle	74.83	64.54	88.55	79.42	59.62	62.87	80.84	58.94
	Total gross value of production 2/	453.26	401.47	481.26	532.63	371.42	282.27	528.68	377.40
B	Operating costs:
	Purchased cattle for backgrounding	62.08	23.26	34.21	105.13	39.01	51.68	87.74	37.39
	Feed:
	Concentrates and other feed	25.17	26.81	19.56	31.45	23.63	20.08	10.19	21.27
	Supplemental feed	19.83	40.24	45.60	6.91	14.38	3.79	3.15	17.67
	Harvested forages	143.33	202.16	154.63	115.22	194.15	88.48	148.27	172.52
	Cropland pasture	14.10	13.20	7.57	28.10	3.11	3.79	5.42	3.66
	Private pasture	102.47	73.61	115.74	96.56	65.01	159.66	123.71	56.50
	Public land	2.48	0.36	6.56	1.58	0.44	1.66	3.55	0.00
	Total feed costs	307.38	356.38	349.66	279.82	300.72	277.46	294.29	271.62
	Other:
	Veterinary and medicine	22.53	38.49	14.68	19.81	16.25	36.63	17.87	19.58
	Bedding and litter	0.43	1.34	0.25	0.04	0.63	0.49	0.81	0.01
	Marketing	6.12	4.27	6.31	7.09	6.97	4.93	6.46	5.63
	Custom operations	31.52	40.18	29.42	24.93	26.98	56.88	27.09	20.45
	Fuel, lube, and electricity	19.09	16.16	16.36	22.32	15.65	22.12	18.81	27.07
	Repairs	26.23	29.24	21.33	32.47	25.91	19.72	19.04	22.02
	Interest on operating inputs	3.95	4.40	3.79	3.99	3.73	3.98	4.04	2.83
	Total operating costs	479.33	513.72	476.01	495.60	435.85	473.89	476.15	406.60
C	Allocated overhead:
	Hired labor	3.66	0.60	0.77	2.81	3.31	18.09	1.57	0.45
	Opportunity cost of unpaid labor	253.74	219.81	339.53	200.90	166.34	285.67	416.11	547.14
	Capital recovery cost of machinery and equip. 3/	142.30	280.63	89.28	139.62	195.18	76.82	69.40	198.28
	Opportunity cost of land	2.45	5.55	3.26	1.49	2.29	1.02	1.59	2.44
	Taxes and insurance	33.66	44.23	33.88	30.90	32.65	31.59	31.54	26.50
	General farm overhead	61.73	84.10	56.46	62.98	55.19	54.65	56.63	55.52
	Total allocated overhead	497.54	634.92	523.18	438.70	454.96	467.84	576.84	830.33
D	Total costs listed	976.87	1148.64	999.19	934.30	890.81	941.73	1,052.99	1,236.93
	Value of production less total costs listed	-523.61	-747.17	-517.93	-401.67	-519.39	-659.46	-524.31	-859.53
	Value of production less operating costs	-26.07	-112.25	5.25	37.03	-64.43	-191.62	52.53	-29.20
E	Supporting information:
	Bred cows (head) 1/	83	51	174	78	50	138	170	53
	Calves weaned (head) 1/	71	45	162	66	38	113	152	44
	Calving season (percent of ranches) 1/
	One	49	65	95	42	19	46	81	22
	Two	13	9	4	14	23	3	6	14
	None set	38	26	1	44	58	51	13	64
	Cost of homegrown harvested
	forages (percent of total cost) 1/ 4/	84	94	89	81	87	55	69	82
	Cost of pasture owned:
	Private pasture (percent of total cost) 1/ 5/	72	72	61	66	87	80	60	87
	Cropland pasture (percent of total cost) 1/ 5/	80	76	84	77	96	83	81	75
1/ Developed from survey base year, 1996.
2/ Includes marketing costs below to avoid double counting. Market prices used to update the gross value of production are net of marketing costs.
3/ Machinery and equipment, and housing, manure handling, and feed storage structures, and breeding herd.
4/ Percent of total harvested forage cost from charge on homegrown forages.
5/ Percent of total pasture cost from charge on owned pasture.

2.1.9 Interpretation of the Missouri Costs and Returns Survey

A careful review of the cost and return estimates depicted in table 2.1.8-1 allows one to better understand what drives regional competitiveness in the U.S. cow-calf industry. As depicted on the map in figure 2.1.8-1, Missouri breaks into two distinct farm resource regions implying that Missouri cow-calf operations employ two very different management systems.

As a generalization, the farms in Missouri’s northern half, (Heartland region), have higher investment costs, employ more management input, and produce product of relatively high value.

Compared to operations in the Heartland region cow-calf operations in southern Missouri (Eastern Uplands region) generally have a lower level of capital invested per cow, employ less management input, and produce product of relatively low value.

The Heartland region and the Eastern Upland region, which include but are not limited to Missouri, have the smallest average herd sizes compared with other reported regions.

Value of Production (Section A of table 2.1.8-1)
The Eastern Upland region had the second lowest value of production per bred cow of the reported regions in the country. Primarily, this came from having the lowest percentage of calves produced per bred cow.

Operating Costs (Section B of table 2.1.8-1)
The Heartland region had the highest total feed costs of all reported regions in the U.S. This was due mostly to it having the highest cost of harvested forage. The Eastern Upland region had the third highest total feed costs in the reported regions. As with the Heartland region, this was attributable to having the second highest cost of harvested forage of the reported regions.

Overhead Costs (Section C of table 2.1.8-1)
The Heartland region had the second highest total allocated overhead costs per cow of any of the reported regions of the country. This appeared to stem from having the highest machinery and equipment capital recovery costs.

The Eastern Uplands region had the third highest cost for machinery and equipment capital recovery costs in the reported regions but managed to have the lowest total overhead costs. This was because the Eastern Upland region had the lowest labor costs among all the reported regions.

Small herds typically have high overhead costs per cow. The Heartland and Eastern Uplands regions had the smallest herd sizes among the reported regions, (Section E of table 2.1.8-1).

Total Costs (Section D of table 2.1.8-1)
Missouri’s diverse natural and human resources combined to create two beef cow production systems with dramatically different costs. Heartland operations had higher costs than any other reported region of the country, whereas the Eastern Upland had lower total costs than any other reported region of the country.

Value of Production Less Total Costs (Section D of table 2.1.8-1)
Deducting the total listed costs from the value of production provides a net basis by which to compare production systems. Missouri’s Eastern Upland region ranked as the third most profitable reported region in the country. Missouri’s Heartland region ranked second to last.

The Heartland region could be described as a system managed for top production, in which overhead costs were allowed to get out of line. In contrast, the Eastern Upland region could be described as a system managed for least cost that did not achieve a level of production sufficient for competitive levels of profitability.

Weaning Percentage (Section E of table 2.1.8-1)
In the Heartland region, the average herd size was 51 bred cows producing 45 weaned calves. Weaning percentage was equal to 88%. In the Eastern Upland region, the average herd size was 50 bred cows, which produced 38 weaned calves. Weaning percentage there was 76%. The Eastern Upland region had the lowest weaning percentage of the reported regions surveyed in the U.S.

Calving Season (Section E of table 2.1.8-1)
In the Heartland region, 65% of the operations had a single calving season, 9% had two calving seasons, and 26% had no set calving season. In the Eastern Uplands region, however, 19% of the operations had one calving season, 23% had two calving seasons, and 58% had no set calving season.

2.1.10 Beef Cow Potential Annual Stocking Rate

Beef cow-calf operations are typically very capital intensive due primarily to land costs. One of the key determinants of investment efficiency is the amount of pastureland needed per cow. Using data from the most recent Census of Agriculture (2002), table 2.1.10-1 ranks selected states in terms of the land investment needed per cow. An average potential annual stocking rate for each of these states was determined by dividing the state’s total pastureland by its total beef cow inventory.

Iowa pastures are potentially stocked at an average rate of 3.69 acres per cow per year, earning it the top rank among leading beef states for potential annual stocking rate Missouri ranks sixth in potential annual stocking rate, with an average of 5.49 acres per cow per year in the state.

Table 2.1.10-1 Potential Annual Stocking Rates for the Top Ten Beef Cow States and Surrounding States of Missouri³⁹

2002	Cropland Used Only For Pasture or Grazing	Woodland Pastured	Pastureland And Rangeland Other Than Cropland and Woodland Pastured	Pastureland, All Types	Beef Cow Inventory	Cropland Pastured Acres Stocking Rate (acres/cow/year)	Woodland Acres Stocking Rate (acres/cow/year)	Pastureland and Rangeland Other Than Cropland and Woodland Pastured Stocking Rate (acres/cow/year)	Total Stocking Rate (acres/cow/year)	Rank
IA	1,355,161	548,815	1,735,421	3,639,397	985,000	1.38	0.56	1.76	3.69	1
IL	528,275	374,571	770,995	1,673,841	445,000	1.19	0.84	1.73	3.76	2
TN	2,066,097	850,513	1,948,445	4,865,055	1,060,000	1.95	0.80	1.84	1.84	3
KY	2,580,719	903,863	1,613,681	5,098,293	1,075,000	2.40	0.84	1.50	4.74	4
AR	1,705,723	909,796	1,977,177	4,592,696	927,000	1.84	0.98	2.13	4.95	5
MO	4,178,574	2,281,064	4,854,438	11,314,076	2,060,000	2.03	1.11	2.36	5.49	6
OK	5,050,399	1,638,323	15,732,765	22,421,487	1,936,000	2.61	0.85	8.13	11.58	7
KS	2,401,459	356,223	15,504,008	18,261,690	1,504,000	1.60	0.24	10.31	12.14	8
ND	1,285,642	125,487	10,984,441	12,395,570	1,008,000	1.28	0.12	10.90	12.30	9
NE	1,881,599	233,765	21,940,679	24,056,043	1,932,000	0.97	0.12	11.36	12.45	10
SD	2,351,951	165,652	22,025,971	24,543,574	1,803,000	1.30	0.09	12.22	13.61	11
TX	12,937,991	4,202,337	83,402,865	100,543,193	5,435,000	2.38	0.77	15.35	18.50	12
MT	1,726,012	1,698,879	38,241,382	41,666,273	1,471,000	1.17	1.15	26.00	28.33	13

³⁹2002 Census of Agriculture and USDA, NASS

2.1.11 Land Investment per Cow

Average pasture values from the 2002 Census of Agriculture were used to derive the typical land investment per cow for selected states. The potential annual average stocking rate multiplied by the average pasture value equals land investment per cow in this analysis.

In table 2.1.11-1, the land investment per cow was estimated for all of the major beef cow states and all of the states neighboring Missouri. North Dakota ranked first, requiring the lowest land investment per cow. This was the result of the state’s moderate potential annual stocking rate and low average pasture cost. Missouri ranked eighth among the states considered. Interestingly, the state with the most cattle, Texas, ranks last of the states considered in terms of land investment per cow, due to its relatively low potential annual stocking density and high per acre land cost.

Table 2.1.11-1 Land Investment per Cow for the Top 10 Beef Cow States and Surrounding States of Missouri⁴⁰

State	Overall Stocking Rates	Pasture Value	Land Investment Per Cow	Rank for Land Investment
ND	12.30	$165	$2,030	1
IA	3.69	$760	$2,804	2
SD	13.61	$210	$2,858	3
NE	12.45	$245	$3,050	4
IL	3.76	$1,030	$4,587	5
KS	12.14	$400	$4,856	6
OK	11.58	$435	$5,037	7
MO	5.49	$980	$5,380	8
AR	4.95	$1,150	$5,693	9
KY	4.74	$1,440	$6,826	10
MT	28.33	$255	$7,224	11
TN	4.59	$2,250	$10,327	12
TX	18.50	$600	$11,100	13

⁴⁰2002 Census of Agriculture and USDA, Agricultural Land Values 2002 (Pasture: Average Value per Acre)

2.2 Missouri Farmland Appreciation

A prime motivation for maintaining a beef herd in Missouri is land appreciation. Beef cows may be seen as a way to pay operating expenses while owning land for appreciation purposes. A prime motivator behind many of the 58,000 beef cow operations in Missouri may be to store and build wealth over time from the compounding annual appreciation on land. Profits from part-time beef cattle operations may be used to pay operating expenses for a farm but long-term compound land appreciation is what justifies the decision to invest family assets into a beef operation. A review of land price appreciation in Missouri during the twentieth century demonstrates the wisdom of that particular investment (table 2.2-1). Although there were times during the century when land prices declined, land values appreciated at a compound rate of about 6% per year over the last 90 years. A 6% compounded return results in land values doubling every 12 years.

Whenever beef cattle producers are challenged about low returns in the cow-calf business, many respond, "farmers live poor and die rich." Land appreciation and the enforced savings from a low profit enterprise may be two key explanations behind this response. Several studies of small business owners have shown that they typically build more wealth over their lives than wage earners. Business owners often set their living expenses lower than their expected earnings to account for the variability in their expected earnings. Over time, this enforced savings builds wealth through long term compounding. Missouri beef cow operations may be a special case of this small business phenomenon where the enforced savings is the capital appreciation on land.

Table 2.2-1 Appreciation of Missouri Farmland this Century

Look-back Period	Period in Time	Starting Value Land Price: $/Acre	Ending Value Land Price: $/Acre	Compound Annual % Return
10 years	1992-2002	734	1,520	7.6
20 years	1982-2002	945	1,520	2.4
30 years	1972-2002	261	1,520	6.0
40 years	1962-2002	127	1,520	6.4
50 years	1952-2002	85	1,520	5.9
60 years	1942-2002	35	1,520	6.5
70 years	1932-2002	39	1,520	5.4
80 years	1922-2002	71	1,520	3.9
90 years	1912-2002	53	1,520	3.8

2.3 Regional Cattle Price Relationships

When comparing average feeder calf prices across the U.S., regional price differentials are clearly evident. While prices vary due to quality and weight differences in the cattle, most regional price differentials reflect transportation cost to major feedlot areas (figure 2.3-1). Eighty percent of the cattle on feed in the United States are finished in Texas, Oklahoma, Kansas, Colorado, and Nebraska.

Figure 2.3-1 Feeder Steer Prices in Major Feeding Areas, October 2001⁴¹

⁴¹USDA, Agricultural Marketing Service. National Feeder Cattle Summary (report no SJ LS650) 700-800 pound steers, medium and large, No. 1. Weekly data averaged for month of October 2001.

2.4 Marketing Channels for Cattle

Cattle Moving to Slaughter
The majority of fed cattle moving to slaughter do not go through public markets. The longterm trend toward direct and negotiated purchases of slaughter cattle continues. In 1980, 77.1% of the slaughter steers, heifers, cows, and bulls went through non-public markets. By 2000, this figure was up to 87.1% of the slaughter steers, heifers, cows, and bulls.⁴²

Feeder Cattle
Feeder cattle moving to stocker operations or to feedlots continue to be purchased predominately through livestock markets and other commission sales channels. In 1983, there were 1,786 livestock auctions selling cattle in the U.S. By 1999, the number of livestock auctions selling cattle in the U.S. dropped 29% to 1,267 (table 2.4-1). The number of livestock auction markets in Missouri dropped at a rate of 41%.

Table 2.4-1 Number of Livestock Auctions in U.S. and Missouri⁴³

	Year
	1983	1993	1995	1997	1999
United States	1,786	1,450	1,386	1,333	1,267
Missouri	120	85	79	78	71
Missouri as a % of US	7%	6%	6%	6%	6%

The number of cattle (all classes) sold on commission in Missouri averaged 125% of Missouri’s calf crop from 1996 to 2000. This number was higher than the annual calf crop because of the sale of cull cows, the sale of a given animal more than once through the auction system, and cattle sold on commission in Missouri that originated in other states. Auction markets have traditionally been the most cost effective way to market feeder calves from a large number of small producers.

Table 2.4-2 Commission Sales in Missouri Compared to Calf Crop

	Year
	1996	1998	2000
Head Sold on Commission44	2,735,000	2,450,000	2,550,000
Calf Crop45	2,170,000	2,070,000	2,060,000
Commission Sales as % of Calf Crop	126%	118%	124%
Commission sales include all auctions, terminal markets, video auctions and country commission firms

⁴²USDA, Grain Inspection, Packers and Stockyards Administration (GIPSA), Packers and Stockyards Statistical Reports, various issues.
⁴³USDA, GIPSA, Packers and Stockyards Statistical Report, various issues.
⁴⁴USDA, GIPSA. Packers and Stockyards Statistical Report, various issues.
⁴⁵Missouri Agricultural Statistics Service

2.5 Purebred Industry

Missouri purebred producers are an important part of the U.S. seedstock industry. There are 21 mainstream breed associations in the U.S. In eight of these associations, Missouri producers ranked among the top five states in the nation in terms of animal registrations in 2002 according to the National Pedigreed Livestock Council. Missouri ranks second in Angus registrations; third in Charolais, Simmental, and Limousin registrations; fourth in Gelbvieh, Salers, and Braunvieh registrations; and fifth in Shorthorn registrations. Table 2.5-1 lists the number of animal registrations per breed.

Table 2.5-1 Cattle Purebred Registrations for the U.S.⁴⁶

Breed	Breed Registrations
Angus	271,222
Hereford	80,976
Limousin	49,036
Charolais	45,354
Simmental	44,159
Red Angus	41,900
Gelbvieh	32,323
Beefmaster	30,416
Brangus	25,500
Shorthorn	21,608
Brahman	15,000
Maine-Anjou	12,267
Santa Gertrudis	11,500
Salers	10,286
Chianina	6,679
Braunvieh	6,235
Longhorn	6,200
Tarentaise	1,900
Highland	1,500
Pinzgauer	664
Blonde d’Aquitaine	625
Total	715,350

⁴⁶2002 National Pedigreed Livestock Council Report

2.6 Economic Impact of the Missouri Beef Industry

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.⁴⁷ As those farm level revenues were spent for goods and services, more than $1.5 billion dollars in economic activity was generated in the state. Most of this activity was in rural areas.⁴⁸

Table 2.6-1 records the distribution of cattle sales by county throughout the state of Missouri during 2002. The number of beef cattle sold in each county is estimated as a percentage of the state’s total cattle production. Gross income by county for sales of cattle and calves is also presented. This income is spent to purchase agricultural inputs and pay family living expenses in rural communities throughout Missouri. The multiplier effect supports thousands of additional jobs in the state and provides an additional $710 million annual impact on Missouri’s economy.

Table 2.6-1 Farm Level Economic Impact of Missouri’s Beef Industry⁴⁹

County	Estimated Total head of Cattle Sold in 2002	Percentage of Total Cattle Marketed in Missouri	Cattle and Calf Sales in 2002	Total Annual Economic Impact
Adair	15,224	0.9	$7,118,757	$10,270,259
Andrew	9,743	0.6	$4,563,306	$6,692,973
Atchison	6,617	0.4	$3,103,048	$4,660,275
Audrain	17,457	1.0	$8,031,418	$11,687,849
Barry	36,538	2.1	$16,975,497	$24,802,372
Barton	17,863	1.0	$8,305,216	$12,259,313
Bates	33,087	1.9	$15,332,707	$22,759,808
Benton	15,833	0.9	$7,301,289	$10,766,167
Bollinger	13,397	0.8	$6,297,362	$8,811,684
Boone	15,630	0.9	$7,210,023	$10,424,857
Buchanan	7,511	0.4	$3,468,112	$4,780,668
Butler	6,293	0.4	$2,920,516	$4,442,720
Caldwell	10,352	0.6	$4,837,104	$7,107,776
Callaway	19,649	1.1	$9,126,611	$13,575,679
Camden	11,773	0.7	$5,384,701	$7,844,545
Cape Girardeau	18,269	1.0	$8,487,748	$13,749,550
Carroll	12,585	0.7	$5,932,297	$8,790,935
Carter	3,857	0.2	$1,825,322	$2,361,038
Cass	18,878	1.1	$8,761,547	$13,415,286
Cedar	18,472	1.0	$8,579,014	$12,488,308
Chariton	20,908	1.2	$9,856,740	$15,105,631
Christian	21,923	1.2	$10,130,538	$14,645,304
Clark	8,323	0.5	$3,924,443	$5,891,067
Clay	8,323	0.5	$3,833,177	$6,059,279
Clinton	13,925	0.8	$6,479,894	$10,095,934
Cole	15,630	0.9	$7,301,289	$10,517,258
Cooper	18,269	1.0	$8,579,014	$12,705,803
Crawford	10,555	0.6	$4,837,104	$6,487,088
Dade	24,765	1.4	$11,499,530	$16,833,483
Dallas	23,141	1.3	$10,951,933	$15,805,994
Daviess	13,397	0.8	$6,114,829	$8,865,145
DeKalb	13,519	0.8	$6,297,362	$9,454,185
Dent	14,615	0.8	$6,844,958	$9,509,974
Douglas	24,765	1.4	$11,590,796	$16,409,693
Dunklin	1,015	0.1	$474,584	$696,892
Franklin	19,690	1.1	$9,126,611	$13,673,690
Gasconade	13,194	0.7	$6,023,563	$8,662,402
Gentry	14,615	0.8	$6,844,958	$9,754,490
Grundy	8,931	0.5	$4,198,241	$6,176,041
Harrison	20,908	1.2	$9,674,208	$14,982,997
Henry	25,374	1.4	$11,682,062	$17,145,319
Hickory	13,803	0.8	$6,388,628	$8,963,123
Holt	4,100	0.2	$1,916,588	$2,671,962
Howard	12,585	0.7	$5,841,031	$8,598,950
Howell	39,380	2.2	$18,344,488	$27,006,077
Iron	3,938	0.2	$1,825,322	$2,381,978
Jackson	5,481	0.3	$2,464,185	$3,719,367
Jasper	21,517	1.2	$10,039,272	$15,535,934
Jefferson	5,684	0.3	$2,646,717	$3,784,575
Johnson	30,042	1.7	$13,963,715	$20,612,496
Knox	13,600	0.8	$6,297,362	$8,874,557
Laclede	27,606	1.6	$12,959,788	$19,160,657
Lafayette	19,690	1.1	$9,126,611	$14,515,419
Lawrence	43,034	2.4	$19,804,746	$29,579,735
Lewis	11,570	0.7	$5,384,701	$7,544,332
Lincoln	10,352	0.6	$4,837,104	$7,237,942
Linn	23,953	1.4	$11,043,199	$15,986,003
Livingston	9,134	0.5	$4,289,507	$6,913,935
Macon	19,081	1.1	$8,852,813	$12,778,823
Madison	7,511	0.4	$3,559,378	$4,845,556
Maries	18,107	1.0	$8,305,216	$11,532,158
Marion	9,540	0.5	$4,472,039	$6,655,987
McDonald	21,923	1.2	$10,130,538	$14,783,191
Mercer	10,555	0.6	$4,928,370	$7,070,939
Miller	22,532	1.3	$10,221,804	$15,223,006
Mississippi	1,015	0.1	$474,584	$691,552
Moniteau	23,953	1.4	$11,316,998	$16,480,061
Monroe	17,457	1.0	$8,122,684	$11,810,675
Montgomery	8,729	0.5	$4,088,722	$5,980,377
Morgan	18,472	1.0	$8,579,014	$13,028,640
New Madrid	609	0.0	$273,798	$371,660
Newton	29,230	1.7	$13,689,917	$19,995,136
Nodaway	28,215	1.6	$13,142,320	$19,581,308
Oregon	21,720	1.2	$10,130,538	$14,315,008
Osage	27,200	1.5	$12,777,256	$17,699,438
Ozark	20,502	1.2	$9,582,942	$13,426,142
Pemiscot	203	0.0	$91,266	$122,576
Perry	15,427	0.9	$7,118,757	$10,015,471
Pettis	23,547	1.3	$10,951,933	$17,103,656
Phelps	12,585	0.7	$5,841,031	$8,104,933
Pike	14,006	0.8	$6,479,894	$9,719,063
Platte	5,684	0.3	$2,646,717	$4,205,832
Polk	39,786	2.3	$18,070,690	$27,086,609
Pulaski	10,555	0.6	$4,837,104	$6,429,890
Putnam	19,081	1.1	$8,852,813	$13,269,809
Ralls	8,120	0.5	$3,741,911	$5,362,027
Randolph	10,555	0.6	$4,928,370	$7,841,268
Ray	12,585	0.7	$5,841,031	$8,774,052
Reynolds	4,385	0.2	$2,099,121	$2,568,211
Ripley	8,323	0.5	$3,924,443	$5,359,973
Saline	15,021	0.9	$6,936,224	$8,674,116
Schuyler	10,555	0.6	$4,928,370	$6,946,991
Scotland	9,946	0.6	$4,654,572	$6,650,042
Scott	3,857	0.2	$1,788,816	$2,879,671
Shannon	8,931	0.5	$4,198,241	$5,389,551
Shelby	11,773	0.7	$5,475,967	$7,709,822
St Charles	4,263	0.2	$2,007,854	$2,894,180
St Clair	20,502	1.2	$9,491,676	$13,888,561
St Francois	9,743	0.6	$4,563,306	$6,583,951
St Louis	609	0.0	$292,052	$408,039
Ste Genevieve	10,555	0.6	$5,019,636	$6,985,265
Stoddard	5,278	0.3	$2,464,185	$3,763,274
Stone	12,585	0.7	$5,841,031	$8,100,535
Sullivan	22,126	1.3	$10,313,071	$14,132,155
Taney	9,540	0.5	$4,472,039	$6,506,258
Texas	37,756	2.1	$17,614,359	$24,951,797
Vernon	23,344	1.3	$10,951,933	$16,058,535
Warren	5,075	0.3	$2,372,919	$3,467,945
Washington	7,917	0.4	$3,650,644	$4,770,863
Wayne	5,278	0.3	$2,464,185	$3,177,714
Webster	29,027	1.6	$13,689,917	$20,282,241
Worth	9,134	0.5	$4,289,507	$6,062,236
Wright	31,260	1.8	$14,785,110	$21,356,500
State Total	1,766,000	100.0%	$821,395,000	$1,191,463,976
Missouri as a whole			$821,395,000	$1,532,005,992
Additional economic impact for the state not directly attributable to a county				$340,542,016

⁴⁷Missouri Agricultural Statistics Service, Farm Facts 2003, http://agebb.missouri.edu/mass/index.htm
⁴⁸Economic analysis using cash receipts estimates from USDA ERS and multipliers specific to Missouri’s cattle industry derived from IMPLAN social accounting software.
⁴⁹Data derived from Missouri Agricultural Statistics Service published estimates.