As I wrote my previous article (“Rebuilding the herd: Who is going to own them?” Progressive Cattle December 2024), I asked multiple people to review, edit and make suggestions. There was one universal comment about how I didn’t answer or address what happens “if we lose the small producer.” I wrote in the last article that “the latest USDA Census of Agriculture, taken in 2022 and released this year, shows that the number of producers with beef cows fell by 14.7% while the overall beef cow herd shrank 7.9% since the previous data was released in 2017. If you take the Census beef herd size in 2022 and divide it by the number of producers, and compare those same numbers to 2017, the average producer’s herd grew by 6.8%. It’s the smaller producers that have gotten out.”
That really got me thinking about the impact of the small producer. After much thought and a little research, I felt I needed to discuss the role a small producer plays in the beef industry’s economic impact, both directly and indirectly, in shaping the future of the beef business and the industries that support it – and, maybe more importantly, how the small producer provides a social and cultural fabric for many Americans.
Economic impact
There are many different economic studies looking at the impact of the beef business. An economic impact study from 2014 showed that beef cattle contributed $165 billion to the U.S. economy. This number reflects the direct and indirect impact of the beef industry. With 29.042 million beef cows, according to the 2014 USDA biannual cattle inventory report released in January of that year, that is $5,681.42 per cow. Adjusted for inflation and all things the same, that is $7,668.29 today.
It is easy to get lost in the large national numbers, but what about numbers closer to home? When I worked for the state of South Dakota as the director of ag development, I was introduced to a study by South Dakota State University that showed the combined direct and indirect economic impact of the beef industry to the state. At the time, South Dakota was reported to have 1.6 million beef cows. The study from 2012 showed that each beef cow contributed $2,785.28 annually to the state. All things the same and adjusted for inflation, that is $3,878.91 per cow annually in today’s money.
The beef industry has an impact nationally, but it is felt harder locally. It can be a little daunting to think about the industries supported by beef producers – banks, feed manufacturing and sales, sale barns, commodities, real estate, grain farming, trucking and transportation, utilities, processing, distribution, retail and many more. What would be the impact to your community if they lost the small producers?
What about the future?
The loss of small producers would undoubtedly benefit the larger producers and corporations by consolidating market power, with broader implications for the U.S. beef industry. Economic consolidation and the loss of rural communities would contribute to a less resilient and sustainable beef industry. Eighty percent of the packing industry is currently controlled by four major packers. The 2022 USDA Census of Agriculture shows that of the 1.9 million farms in the U.S., 32.7% of them had beef cows. Further breakdown of operation size shows that 79% of farms with beef cows have 49 or fewer cows. In the end, small producers are more than just suppliers; they are integral to the overall health and longevity of the U.S. beef industry. Losing the small producer would be a loss not just for the industry but for rural America.
Social and cultural impact
It should come as no surprise that consumers are getting further from their food. As operations across all agriculture sectors have gotten bigger, the number of ag kids coming from them has dramatically declined. Even in small rural communities, the number of kids in school with a direct ag background is likely the minority. That means there are fewer ag kids to help educate their peers about not only production practices but also where their food comes from.
A 2017 scholarly report in the Journal of Agricultural Education reported that 40% of Californian fourth-, fifth- and sixth-graders did not know that a hamburger came from a beef animal, and 30% didn’t know that cheese was made from milk. I am not certain, but I do not think those numbers have gone down. Given that almost one-third of farming operations are in beef production, small beef producers are likely the last visible opportunity for people outside of agriculture to experience and start to understand where their food comes from.
Conclusion
The economic impact of small beef producers on the U.S. economy is diverse and significant. These producers are not just suppliers of beef but integral parts of rural economies, ag supply chains and local job markets. By contributing to local economies, maintaining agricultural diversity and creating jobs, small beef producers help sustain a resilient and dynamic beef industry.
If small producers disappear, the U.S. economy and the beef industry would likely suffer from further economic concentration, reduced competition and the loss of the cultural and social benefits of educating others as to where their food comes from. Maintaining small beef operations is crucial to the sustainability of the beef industry and for the broader economic well-being of rural America.
