June 28, 2007

Report indicates fragmentary nature of US beef industry

While 80 percent of America's poultry industry is concentrated in the five top companies, the 50 largest operators in the beef industry hold less than two percent of the market, showing the highly fragmentary nature of the US beef industry, a report showed.

The report, Beef Cattle Ranching - Industry Profile, by Research And Markets, noted that the industry, which involved 750,000 operators, has a combined annual revenue of US$50 billion.

Of the 750,000 operations, only about 5,000 operations have more than 500 head of cattle. Each year, about 45 million cattle and 10 million calves are sold in the US.

Besides prices, beef demand in the US is driven by population growth and global trade. The profitability of each operation would depend on efficiency and anticipating demand.

While large operators benefit from volume purchasing and efficient use of labour, small operators can compete successfully in niche areas such as production of special grades of beef cattle, the report said.