Occasionally on the news, most likely during the stock market report, you’ll hear a livestock market report. It might not be obvious how that commodity report ties in to the cattle you see as you drive down the road, and the steak on you’re plate, but they are, in fact, all inextricably linked. In this series of posts, I’ll try to stick a couple of “You Are Here” pins into the big-ass map of sectors and industries that form the beef market.

Most burgers and steaks that we eat come through two production sequences – Fed Cattle and Cow Beef. A third production sequence, Direct Marketing, isn’t as big or as common, but it’s very recognizable, and deserves some attention.

Fed Cattle – The Production Sequence We Love to Hate

Beef production throughout most of the US is largely done in three distinctive phases – usually  referred to as cow/calf, stockers, and feeders. And for simplicity’s sake, we can look at it as cow/calf being very roughly the first six months and 500 pounds on pasture, the next 6 months or 500 lb, the stockers phase, being transitioned from forage to a grain diet, and the final few months on “full feed”, as feeders. Most beef being processed as steaks and other premium cuts follow this sequence. These are three distinct business sectors, with their own requirements, risks and opportunities.

Phase 1 – Cow/Calf

It all starts with a group of cows, part of a cow/calf operation. These are the beef cows that live in managed groups, the ones you most often see if you’re driving past a herd of beef cows. (see how to tell a beef cow from a dairy cow infographic). Typically, individual, independent private operators own the cows and the bulls. The average US herd is about 40 cows. Part of the reasoning behind that is the fact that that’s about how many cows a single bull can breed in a 60 day breeding season.

North of the Mason Dixon, calves are usually born in the spring. South of the Mason-Dixon, calving season trends more towards fall. The bull will go in with the cows – the “turn-out” date, and is then removed from the group 63 days later. Roughly 283 days after the turn-out date, a group of lively, curious 70 pound calves will “hit the ground”. The entire group of cows should calve within that two month “calving window” (which corresponds with the two month breeding season.) This “tight” group of calves will all hit their age, weight, physical development and sexual maturity all about the same time. This makes it easier for management and marketing.

Cows are not typically fed any grain, relying mainly on forages (including hay) to maintain their own weight, and to provide milk for their growing calves.

These calves will stay on their mamas for about 6 months or so, until they’re about 500 pounds, and are then weaned. Ideally, they’ll be given thirty days to acclimate to being weaned, and then be sold as “fully weaned, vaccinated and co-mingled”, though the weaning process, as well as the sale or retention of the calves can vary.

Phase 2 – Stocker Operators and Backgrounders

These “preconditioned” calves becomes “stockers” eventually heading to a “backgrounder”. Stocker operations differ a little from backgrounders in management, but the goal is the same – preparing calves for the feedlot. Stocker operators and backgrounders may own the calves they’re raising, or provide a custom feeding service. They may be on pasture, and as they get older, transitioned to a diet heavier in grains and other feeds. There’s always the mental calculus about purchase prices, sale prices and feed costs, and so in this phase, the operators need to be aggressive at managing expenses, as well as be skilled livestock managers. It’s also in this phase where calves from many different farms start to be assembled into groups based on size, weight and management requirements.

And about 6 months and 500 pounds later, these animals are ready to move to the feedlot.

Feedlots, Finishers and Fats

There are few feedlots here on the east coast – there are a some in Pennsylvania – but it’s cheaper and easier to haul the livestock to the feed (rather than haul feed to the livestock),, so most cattle are finished in the Midwest, Kansas and Nebraska in particular. In addition to ready access to a wide variety of feed-stocks, the relative lack of rain, and consequential lack of mud, makes this part of the country ideal for large cattle finishing operations.

Again, operators pay a premium for uniformity, making sure that all of the animals in a pen are the same age, size, weight, and sex. If the animals in the pen are from the same farm, they’ll stay healthier, their immune systems having adapted to each other. Feedlots may not look very appealing to us, but cattle prefer this environment, well-fed, fly-free, and physically close to each other. Other species of animals would be suffering greatly if they were subjected to this – for dogs or horses this would be cruel – but cattle aren’t interested in the psychological stimulation that is so important horses or dogs. Adult cattle don’t have the same play instinct that cats, dogs, and horses have, and they’re perfectly happy being the couch potatoes of domestic animals. During their last few months, they’re fed a ration high in concentrates – grain – and put on the last 300 – 500 pound of weight. The goal is to get the animals to grow as fast as they can without compromising their health. At about 1300 pounds or so, they’re “fats”, ready for “the rail”. Sale and purchasing mechanisms vary, but the end result is the same. They’re shipped to a packing plant, and experience an instantaneous, lights-out, “Tony Soprano” moment.