General Farms, Primarily Livestock and Animal Specialties

SIC 0291

Industry report:

This classification includes establishments deriving 50 percent or more of their total value of sales of agricultural products from livestock and animal specialties and their products, but less than 50 percent from products of any single three-digit industry group.

Industry Snapshot

According to the U.S. Department of Agriculture, a total of 2.2 million farms were in operation in 2009, a number unchanged from the previous year. Total land in farms constituted 919.8 million acres, as compared to 945 million at the start of the decade. The average farm size remained the same from 2007 to 2009 at 418 acres, with a large range from state to state. For example, the average farm size in 2009 in Wyoming was 2,745 acres, whereas in Iowa it was 333 acres and in Massachusetts, 68 acres.

General livestock farms account for only a very limited number of livestock and poultry farms, as most sales in this category come from farms specializing in a specific animal. General livestock farms tend to be small, with fewer than 50 employees and modest sales, but others, such as Euribrid BV, a subsidiary of Nutreco Holding N.V., and Nevada Nile Ranch Inc., registered multimillion-dollar sales volumes. Farmers in this category mostly maintain traditional livestock, such as sheep, cattle, hogs, turkeys, and chickens, though many diversify into more specialty animals, such as elk, bison, and llamas. In addition, most general livestock farmers harvest traditional crops as well, either for feed or for retail.

Background and Development

The roots of general farming in the United States go back many years. A period of specialization occurred in the nineteenth century; general farming, however, remained ubiquitous but was concentrated particularly in the Appalachians. Farm wisdom has always advised against "putting all your eggs in one basket," and there were many beneficial combinations of different types of livestock and crops.

General livestock farmers faced a challenge at the beginning of the twenty-first century due to the severe lull in agricultural commodity prices, caused in large part by the massive production levels generated by large-scale factory farming. Factory farms, generating an increasing share of national agricultural output, were able to produce their goods at lower costs, further exacerbating the pricing crisis. The net result was to squeeze small and mid-sized farmers, who had the bulk of the general livestock farms in the United States, out of the marketplace if they were unable to find an appropriate niche allowing them to create economies of scale. The average size of farms between 1997 and 2002 grew from 431 acres to 441 acres, and the number of farms with 2,000 acres or more grew from 74,426 to 78,037.

In response, many livestock farmers found success in the growing organic foods industry. Targeting customers concerned with the health and environmental risks associated with chemicals, pesticides, and genetically modified foods, the organic sector emerged from specialty health stores and a fringe customer base to assume a significant position in the mainstream consumer market. Organic agricultural products constituted the fastest-growing sector of the farming industry during the 1990s, with sales of $5 billion in the United States by the early years of the first decade of the 2000s. A typical use of livestock in conjunction with raising organic crops involved grazing cattle through rotations of oat and soybean fields, thereby improving soil conditions and helping to control weeds.

Organic farmers eschew the synthetic chemicals and gene-tampering technologies many farmers use to boost yields and create more productive livestock. Both the animals themselves and all the feed they consume must be completely free of such chemicals in order to be labeled organic, a fact that demands organic farmers plan carefully far in advance to ensure appropriate feed supplies and access. Organic livestock must be maintained on land that is free from any chemical infiltration, including soil and water supplies. Moreover, animals themselves must be carefully monitored for illnesses, to which they are more susceptible than their non-organic cousins since organic animals cannot be administered antibiotics used to stave off disease. Thus, an animal discovered with a communicable disease must immediately be removed from the herd lest it affect the remaining supply. Because of the greater risk and investment required, organic farming is a more costly undertaking than non-organic farming, and its consequent products fetch a higher price at the market.

The health and safety concerns related to livestock farming also assumed increasing prominence on the national scene. The Environmental Protection Agency (EPA), in conjunction with the National Pork Producers Council, addressed environmentalists' protests over on-farm odors and waste disposal, particularly on pork farms, with the development in 1997 of the On-Farm Odor/Environmental Assistance Program (OFO/EAP), whereby risk factors are identified and assessed. This environmental-management program was designed to reduce odors and prevent contamination of surface or ground water. It calls for periodic governmental inspection (with the cooperation of farmers) of farming sites, buildings, manure-handling systems, deceased-animal disposal methods, and land application. The OFO/EAP's checklist includes questions about seepage in the building's foundation, cleanliness of animal-storage facilities, pipe conditions, and drainage facilities and equipment. As a cooperative program rather than a mandate, farmers are encouraged to consider the financial benefits afforded by implementing sanitary, environmentally sound waste-management systems.

Chickens, longtime barnyard fixtures, did their part to clean up the farm environment. For years they have been used as scavengers, feeding on spilled feed and insects around barns and rabbitries, resulting in savings in feed costs and improved sanitation of the animals' living areas. However, the type of environment must be carefully matched with the right type of chicken. For example, only non-flying chickens typically are used near rabbit cages; otherwise, they fly on top of the cages and contaminate them with their droppings. Other types of scavengers have filled similar roles. Earthworms, for example, have been kept under rabbit cages with success, for they can process the rabbit droppings and can themselves be sold as bait.

Other symbiotic relationships have been successfully fostered in livestock farming. Hogs have been kept with cattle to feed on waste grain. Goats have a rather hardy digestive system, but they are usually kept alone due to their differences from cattle in size and temperament. Horses seem to act as catalysts to tetanus in goats; these two species, therefore, are not usually kept together, or tetanus shots are used as a precaution. Goats, meanwhile, are not usually stored with sheep, due to the high susceptibility of both to parasites. Cattle, sheep, and goats, though, have grazed open pastures together successfully, because each feeds on different levels of vegetation.

Other concerns during the first and into the second decades of the 2000s included food-born illnesses, such as E. coli, salmonella, listeria, and others. In California, 1.5 million pounds of low-heat processed milk were withheld from the market in 1999 when it was learned that 140 cows on a California ranch had died from exposure to botulism; this was only thirteen months after some 400 cows had met a similar fate at another California dairy farm. The disease was tracked to large bales of hay, suggesting that the attempts by some farmers to cut costs by packaging hay in larger bales was creating compromised feed allotments. In 2002, Pilgrim's Pride instituted the largest meat recall in U.S. corporate history when it removed 27 million pounds of poultry from shelves due to suspected contamination with listeria.

Unlike most of the emerging focus on food-borne illness in the farming industry, concern over tuberculosis infection was targeted more at small farms and "homesteads" than at factory farms, since the former's birds tend to be free-ranging and are kept longer. Chickens more than two years old are more likely to spread the disease, which can be transmitted to humans either directly from the birds or through cattle or swine. The U.S. Department of Agriculture (USDA) regulations prohibit fowl from dairy barns, due to the birds' susceptibility to tuberculosis. Soil contamination is also a threat that can persist even after the affected birds are destroyed.

Another major disease concern in the first and early years of the second decade of the 2000s was an outbreak of bovine spongiform encephalopathy (BSE), also known as "mad cow" disease. This disease, which had plagued the United Kingdom's beef industry since the mid-1980s, causes a fatal, degenerate brain disease in cattle and was caused by sheep material infected with transmittable spongiform encephalopathies (TSEs) used in cattle feed. In December of 2003, an animal infected with mad cow was discovered at the Sunny Dene Ranch in Mabton, Washington. As a result, the U.S. government slaughtered hundreds of cattle with possible ties to the infected cow and also recalled about 10,400 pounds of raw beef. Shortly thereafter, roughly 30 countries, including Japan and Mexico, banned all imports of U.S. beef and many others imposed restrictions. Japan, which accounted for 32 percent of total U.S. beef exports at the time, removed the ban in December 2005 but reinstated it a month later. Such actions caused a severe drop in beef exports into the late years of the first decade of the 2000s. In early 2010, talks were scheduled in an attempt to reach an agreement regarding U.S. beef exports into Japan. At that time, Japan did not allow imports of beef from cattle aged over 20 months.

To accommodate public outcry against these increasing tendencies, the Food and Drug Administration (FDA) placed limits on the amount of aflatoxin, which results from mold growth on livestock feed, that can appear in human or livestock items for consumption. Meanwhile, the EPA took regulatory steps aimed at imposing pollution-discharge permits on the nation's larger farms, affecting everything from feed supplies to equipment. These and similar developments caused an increase in costs to farmers in the form of testing and prevention systems and other expenses relating to staving off food-born illnesses and livestock contamination.

More broadly, however, factory farms themselves have come under fire, even from the Department of Agriculture, for the perception that they inherently lend themselves to pollution and food contamination. While the trend in all agricultural sectors has been toward larger, more centralized farming, such farms have been found to be fertile ground for manure spills that contaminate water and kill fish, as well as for high levels of nitrogen- and phosphorous-based water contamination. This has focused attention on the comparative benefits of small-scale farming, which has been gradually displaced by factory farms. After years of protests from small farmers and environmentalists, the prominence of food-born illnesses and contamination has led the Department of Agriculture to investigate the possibilities of reversing the long shift toward factory farming. While most industries have experienced a tightening concentration of ownership and production, the immediate negative consequences of this pattern in the agricultural industry have forced regulatory bodies to reconsider traditional policies. Federal tax programs, for instance, have long been tilted in favor of large agribusiness, offering incentives for capital-intensive expansion of operations, as well as exemptions from federal labor laws for large farms dependent on hired labor. For general livestock farmers, the majority of whom are relatively small, these developments offered some hope.

Current Conditions

According to the USDA, 950,000 cattle farms operated in the United States in 2009. An estimated 753,000 farms raised beef cows, and 65,000 focused on milk cows. These figures represented only about a 1 percent decrease from 2008. The number of sheep farms also decreased about 1 percent, to 82,000. The number of hog farms was down 2 percent in 2009, to 71,450, and most were large: 86 percent had more than 2,000 animals. In terms of number of general farms, Texas had the most in 2009, due in part to its size, with 247,500; Missouri was second with 108,000, and Iowa was third with 92,600. Texas also had the most land in farms, with 130,400 acres. Montana had 60,800 acres in farms and Kansas, 46,200.

Despite the hopes for a trend toward smaller farms, the number of farms continued to decline as size of farms increased. Still, as the second decade of the twenty-first century began, only 6 percent of all U.S. farms earned more than $250,000 annually.

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