The Diverse Structure and Organization of U.S. Beef Cow-Calf Farms
by William McBride
and Kenneth Mathews
Economic Information Bulletin No. (EIB-73) 48 pp, March 2011
What is the issue?
Beef cow-calf farms operate in an industry characterized by
large numbers of small farms. Manyof these farms specialize in beef
cattle production, but farm households on these operations tend to
generate more income from off-farm sources, such as wages and
salaries or retirement income, than from the farm businesses
themselves. Large farms account for most beef cow-calf production
in the United States, but on many of these farms, cow-calf
production is not the primary enterprise. These findings suggest
that operators of beef cow-calf farms, large and small, have
varying goals for their cattle enterprises, of which farming as a
lifestyle choice is not uncommon.
What did the study find?
• About 60 percent of U.S. beef cow-calf farms produce calves
that are sold at or shortly afterweaning. These are usually small
farms, and most are located in the Southeast and SouthernPlains.
Many of the farm households on these operations generate most of
their income fromoff-farm sources.
• More than a third of beef cow-calf farms retain ownership of
calves after weaning and continue grazing, or backgrounding, the
calves from 30 to 90 days before selling. These farms are generally
larger, have more beef cows, and are distributed throughout the
United States, with many in the Northern Plains and West
• The majority of U.S. beef cows are located in the South,
including the Southern Plains (primarily Texas) and the Southeast.
These regions have the advantage of a longer grazing season and
less need for supplemental forage to support beef cattle during the
winter, which results in lower feed costs. Despite higher feed
costs in the Northern Plains, large beef cow-calf producers in this
region are able to compete with those in the South due to
production efficiencies and economies of size.
• Economies of size in beef cow-calf production suggest that
farms have an incentive to become larger. However, the significant
land area required for large-scale beef cow-calf production
inhibits many producers from expanding. In most areas of the United
States, beef cow-calf production is the residual user of land. As
the opportunity cost of pasture and range land increases for uses
such as crop production or recreational activities, the size of
operations may be limited or fragmented into smaller units.
• Most farms with beef cows do not specialize in beef cow-calf
production. In 2008, cattle production accounted for less than 40
percent of the average farm product value on U.S. beef cow-calf
farms. Regionally, cattle production accounted for about two-thirds
of farm product value on beef cow-calf farms in the Southern Plains
and West regions but less than 40 percent in other regions.
Specialization in cattle production increased with farm size and
peaked at 60 percent of farm product value for operations with
250-499 beef cows. Among the largest operations, those with 500 or
more cows, less than 50 percent of farm product value was from
• Operators of more than a third of beef cow-calf farms worked
off-farm in 2008, and half of beef cow-calf farms are classified as
rural residence farms. These farms are small operations that
specialize in beef cow-calf production but report off-farm earnings
as the primary source of household income. Commercial farms with
beef cow-calf enterprises are mostly diversified farm operations on
which cattle are a secondary enterprise that accounts for about a
fourth of farm product value. On intermediate farms, which have
annual farm sales under $250,000 and report farming as the main
occupation, the beef cattle enterprise accounts for over half of
farm product value. Intermediate farms are among the most
financially vulnerable to the input and output price variations of
beef cattle production.
• In 2008, more than 80 percent of beef cow-calf producers had
some type of animal identification system in place, such as
branding or ear tagging. But, nearly a quarter of beef cow-calf
producers with 20 or more cows reported a lack of familiarity with
the National Animal Identification System (NAIS), and only about a
quarter had their premises registered with the system. This lack of
participation among the Nation's nearly 765,000 beef cow-calf
producers appears to be related to concerns about liability and
costs associated with the program. Because beef cow-calf production
is a secondary farm enterprise and a secondary household income
source for most farms with beef cows, there may be little incentive
for these farms to risk any perceived liability or to incur program
participation costs. This may create a challenge for Federal or
State efforts to enhance product traceability through animal
identification on beef-cow calf farms.
How was the study conducted?
In this report, ERS summarizes information from a 2008 survey of
U.S. beef cow-calf producers included as part of USDA's annual
Agricultural Resource Management Survey, which is administered by
ERS and USDA's National beef cows on the operation during 2008.
Data from participating producers were weighted for analysis such
that they represent 96 percent of U.S beef cow-calf farms in the
target population. Surveyed producers were divided into
by type of operation (cow-calf only, cow-calf/stocker, or
cow-calf/feedlot), region, size, and farm typology, through which
structural and economic differences among producers in each group
were statistically evaluated. Beef cow-calf producers were also
grouped according to their familiarity and participation with the
NAIS. Program participants were statistically contrasted with other
producers to identify characteristics that distinguish those who
participated in animal
identification and product traceability programs.