TABLE 2-1 U.S. Per Capita Consumption of Meat, Dairy Products, and Eggs in 2001

Product

Retail weight per year (kilograms)

Broiler chicken

34.7

Beef

30.0

Pork

22.8

Turkey

7.9

Milk and products

264.4a

Eggs

252.6b

 

a1998, kilograms of milk equivalent on a milk fat basis (USDA, 1999b).

bNumber rather than kilograms.

SOURCE: USDA (2002c, p.11)

and products are unrestricted. Producers respond to market prices for livestock and their products and to prices of feed ingredients by increasing production following periods of high profit and decreasing production following periods of losses. Biological lags in production response are a fundamental characteristic of livestock agriculture. The gestation or hatching periods of livestock and poultry plus the period from birth to market weight or to milk or egg production impose minimum times in which livestock and poultry farmers can respond to price or profit signals. This period approaches one year for swine and two to three years for cattle. Broiler producers are able to respond within a few months, while egg and turkey producers may require 6 to 18 months to respond. The result of the lagged response is a cycle in production, prices, and profits as producers are constantly adjusting output by expanding or exiting production. Prices and profits in any single year may not be representative of the equilibrium price and profit of a livestock sector due to the length of cycles in prices and profits. Volatility in prices is evident. Feed cost is generally the largest component of total cost and varies directly with ingredient (corn, soybean meal, hay) prices. Recent U.S. Department of Agriculture (USDA) benchmark cost series show feed to be about 60 percent of the cost of broilers, turkeys, table eggs, and pigs. Feed is more than 70 percent of the benchmark cost of weight gain in high plains cattle feeding operations. Volatile prices for feed ingredients and market animals, combined with biological lags in production response, result in extremely volatile profit margins. Extended periods of losses (sometimes severe) and profits are common in the livestock sector.

Confined animal feeding operations have a large share of the nation’s livestock and account for an equal or larger share of the products. For example, beef cattle feedlots with more than 1000 head of cattle, which sold an average of



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