Economic Impact of the Beef Cattle Industry to North Carolina

D. C. Miller
R. L. McCraw

The January 1, 1995 inventory of beef cows that have calved reached an all time high in North Carolina at 501,000 head. This number represents a 14% increase over last year's inventory and continues a trend of rapid herd building in the state. Since 1988 when cow numbers were 320,000, we have seen a 57% increase overall, or an average 8% annual increase in cow herd size. These breeding cattle are located on approximately 26,000 operations across the state. North Carolina is similar to other states in it's distribution of cattle in that most producers are small to medium sized, owning less than 50 head. Assuming the producers are small to medium sized, owning less than 50 head. Assuming the average value is approximately $225 million dollars.

If we assume that only 85% of these cows wean a live calf each year and that 15% are retained as replacements, the value of these calves (500 pound calves at $70.00/cwt = $350/hd) should gross N.C. producers over $131 million dollars. A large percentage of these calves are purchased by stocker cattle operators and backgrounders who assemble, vaccinate and feed these cattle to higher weights in preparation for shipment to Midwestern and Western feedlots. If we assume 75% of these calves remain in the state as backgrounded cattle and are later sold to feedlots at an average value of $500.00 (750 pound cattle at $67.00/cwt.), this is an additional $131 million dollars attributable to N.C. beef production. An average cow operation simply attempting to maintain a given number of cows typically has a 15 - 20 percent turnover rate on it's cows. If we assume that 15% of the cows are sold each year for various reasons (lost calves, rebreeding problems, sickness, etc.), and that the average cull cow is worth $400.00, this would gross N.C. producers an additional $30 million dollars.

A total value of the cattle types listed above; calves sold, stocker cattle sold and cull cows sold, would amount to almost $300 million dollars without consideration of breeding bulls, cow bulls or many private treaty sales. Large numbers of calves are also known to be sold several times in the same year. Chuck Lambert with the National Cattlemen's Association estimates that every dollar of cattle sales generate an additional $5 to $6 dollars of business activity in the local economy through farm supply, food or other businesses. For example, the number of cull cows slaughtered in North Carolina under Federal inspection (a segment of the industry we often overlook in this state) average over 12,000 head per month, adding another $58 million to business activity. This multiplier effect would generate $1.5 to $1.8 billion in business activity associated with cattle production in North Carolina. This effect would be much larger if cattle prices matched levels averaged for the past five years. Current prices are the lowest we have seen in 15 years.

For additional information, contact Dale Miller, 919/515-7772, or Julie Holder, 919/515-2761.
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