Animal Production Industry Trends

Increased Concentration, Specialization

Large commercial animal feeding operations have become so efficient at raising animals that smaller operators can't compete based solely on price. Just 10,000 large farms now hold 30 percent of all beef cattle; only 2,000 farms hold 50 percent of all hogs. Large hog farms increasingly specialize in a single stage of production, lowering operating costs and making it difficult for independent farrow-to-finish operations to compete.

More Vertical IntegrationWith ongoing livestock industry consolidation, market access is a serious problem for smaller producers. Close alliances with meatpacking and feedlot segments enable larger farms to negotiate better prices and contracts. Small producers contend that such vertical integration of producing and packing depresses meat prices.

Milk Production Increases; Farms Decline

The number of US dairy operations has fallen from 225,000 two decades ago to 70,000 today, but total milk production is higher than ever. Milking rates per cow have increased dramatically over the past 20 years. Compared to the 1960s, the US has half the number of milk cows but produces nearly three times the amount of milk. Production is shifting to large dairy farms with advanced milking technologies: half of all farms now manage 500 or more head.

Immigrants Lower Labor Costs

Foreign labor, mostly from Mexico, make up an increasing share of US hired farm labor. The movement of Mexican workers to the US provides farms with less expensive available labor. Farmers can hire seasonal agricultural workers under H-2A visa programs.

Contract Farming Helps, Hurts

One-third of US hogs raised on large farms (more than 2,000 head) are under contract to meatpackers. Farmers get a more stable income and less volatile sales prices under contracts with meatpackers. Farm activists claim that a handful of packers will soon dominate hog raising, making it impossible for the independent family farmer to get a fair price for hogs.