Livestock Production Practices

In recent years, the number of livestock operations has fallen and production has shifted to larger and more specialized operations. These structural changes have been accompanied by a movement towards cost-saving production technologies and practices. The changes in livestock production have had important implications for economic efficiency, final product prices, water and air pollution, food safety, and rural development. ERS research uses information from Agricultural Resource Management Survey (ARMS) to describe and document changes in hog, dairy, cow-calf, and broiler production practices. ERS research also explores how government policies and evolving economic conditions influence livestock production practices, farm productivity, and environmental outcomes.

• Dairy farm structure and policy. Congress reorganized dairy policy in the Agricultural Act of 2014 when it eliminated three programs and created the Dairy Margin Protection Program. The new program aims to provide farmers with financial protection against risks from increasing volatility in milk and feed prices. These developments occurred amid ongoing structural change toward larger dairy farms, as well as ongoing change in dairy product demand, away from fluid milk, and toward manufactured products sold in domestic and export markets. The ERS report, Changing Structure, Financial Risks, and Government Policy for the U.S. Dairy Industry (ERR-205, March 2016), focuses on the interrelated topics of structural change in dairy production, changes in dairy product markets, growing price volatility, and dairy policy. It details the major developments in each, traces the linkages among them, and identifies the challenges that structural change, evolving product markets, and price volatility pose for policy.

• Antibiotic use on livestock operations. Farmers use antibiotics to treat, prevent, and control animal diseases and increase the productivity of animals and operations. However, there is concern that routine antibiotic use in livestock will contribute to antimicrobial-resistant pathogens, with repercussions for human and animal health. Given these concerns, pressure to limit antibiotic uses for purposes other than disease treatment is mounting. Changes in use will lead to a series of adjustments in animal agriculture as producers change production practices, with potential repercussions for prices and volumes in livestock markets. ERS research, see for example Economics of Antibiotic Use in U.S. Livestock Production (ERR-200, November 2015), addresses the following questions: How widely are antibiotics used in the livestock industries? How could the current structure of the livestock industry influence the effects of restrictions on certain uses of antibiotics? How might the restriction of antibiotics affect production and costs at the animal and farm levels? How might those impacts affect production and prices in markets?

• Climate change and dairy productivity. In the United States, climate change is likely to increase average daily temperatures and the frequency of heat waves, which can reduce meat and milk production in animals. Methods that livestock producers use to deal with heat stress—including modifications to animal management or housing—tend to increase production costs and capital expenditures. Dairy cows are particularly sensitive to heat stress, and the dairy sector has been estimated to bear over half of the costs of current heat stress to the livestock industry. In Climate Change, Heat Stress, and U.S. Dairy Production (ERR-175, September 2014), ERS researchers estimate how the local climate affects U.S. dairies’ effectiveness at producing outputs with a given level of inputs. This information is used to estimate the potential decline in milk production in 2030 resulting from climate change-induced heat stress. Results indicate modest heat stress-related production declines over the next 20 years, with the largest declines occurring in the South.

• Hog farm structure and productivity. The number of U.S. hog farms declined by more than 70 percent over the past two decades while hog production rose by more than 30 percent. The result has been an industry with larger hog enterprises, increased specialization in a single phase of production, greater reliance on purchased feed rather than feed grown on the farm, and an increased reliance on formal contracts that connect farmers, hog owners, and packers to coordinate production. ERS research, see for example U.S. Hog Production From 1992 to 2009: Technology, Restructuring, and Productivity Growth (ERR-158, October 2013), documents how the hog sector changed during the last two decades and measure hog farm productivity gains and its sources.