Economic Tidbits

Nebraska’s Feeding Sector

Estimated 2017 Cattle on Feed Density by County

A couple weeks ago, Tidbits highlighted Nebraska’s cow/calf sector. This week Tidbits turns its focus to the state’s feedlot sector and how it compares to other states with large cattle feeding sectors. USDA’s November cattle on feed report showed Nebraska feedlots with greater than 1,000 head held 2.50 million cattle, third behind Texas with 2.91 million head and Kansas with 2.52 million.

However, while the three states share large feedlot sectors, the structure of the sectors differ markedly. The density and geographical breadth of cattle feeding in Nebraska is much more widespread than the other states (Figure 2). Feeding in Texas, Kansas, Colorado, and Oklahoma occurs in large feedlots, concentrated geographically in a few counties. Cattle feeding in Nebraska is more diverse and widespread in size, scale, and geographic location.

Texas and Nebraska provide excellent examples of the structural differences between major cattle feeding states. While both states typically feed between 2.5 to 3.0 million cattle at any given time, they differ in total number and size of feedlots. The 2017 Census of Agriculture reported Texas had 360 farms with cattle on feed with a total 2.65 million head. In turn, Nebraska had 1,737 farms and 2.91 million head. The Census also reported Texas had 91 farms, 25 percent, with inventories over 2,500 head accounting for 99 percent of cattle fed. Nebraska had 236 farms, 13 percent, with inventories over 2,500 head, accounting for 80 percent of the cattle fed.

Figure 2. Estimated 2017 Cattle Feeding Density by County

Estimated 2017 Cattle on Feed Density by County

Source: Feasibility Assessment of Reporting Negotiated Slaughter Cattle Purchases in Separate Delivery Window Categories, Ted. C. Schroeder, Lee L. Schultz, and Glynn T. Tonsor, prepared for the USDA-AMS, November 4, 2019

The structural differences manifest themselves in how cattle are marketed in the states. The USDA Agricultural Marketing Service reported negotiated transactions in Nebraska during the second quarter of this year averaged 40 percent of total purchases and 35 percent during the third quarter. Formula purchases averaged between 50-55 percent over the same periods. In contrast, cash purchases in the Texas/Oklahoma/New Mexico reporting region accounted for 8 percent of sales in the second quarter and 14 percent in the third. Formula sales averaged around 82 percent over both quarters. Negotiated purchases in Kansas ranged between 14-22 percent of transactions, and formula purchases between 71-76 percent. These transaction breakdowns are typical. Nebraska typically has a higher share of cattle purchased through cash sales, while the southern plains have higher formula purchases.

The great plains region is the epicenter for cattle feeding in the U.S. The states in the region have that in common, but the structure of the feeding sectors in the states and the means of marketing cattle are markedly different. This certainly makes for interesting discussions when it comes to policies affecting the nation’s cattle feeding sector.

What is your reaction?

Approve
0
Not Sure
0
Disapprove
0

You may also like