In December 2019, the Amarillo Chamber of Commerce released the 5th Edition of ‘The Impact of Agribusiness in the High Plains Trade Area’. The publication was authored by Texas A&M AgriLife Extension and WTAMU faculty. Today in High Plains Ag Week we discuss select material from that publication; the impact of beef cattle on the High Plains Trade Area economy. You can find digital copies of the publication on the homepage of Texas AgriLife Extension in Amarillo, and printed copies at the Amarillo Texas A&M AgriLife Research & Extension Center.
Local Market Conditions
The Impact of Beef Cattle on the Texas High Plains
Fed cattle remains the driving force of Texas High Plains agriculture. If measured as a single state, this 26-county area would rank in the top three states for cattle-on-feed production at any time, and regularly takes the top spot. The region averages 2.2 million head of cattle on feed, leading to approximately 4.9 million head marketed annually. Cattle fed in the High Plains account for approximately 90% of the state’s total cattle fed and marketed each year.
Average Annual Cattle Fed, High Plains Trade Area (Thousand Head)
Between the 1970s and late 1990s, the fed cattle industry saw a significant amount of growth. This increase in livestock, a temperate climate, and the availability of water in the Ogallala Aquifer are the primary reasons for the substantial increase in grain acreage. Since 2000, the number of fed cattle marketed has stabilized. Fed cattle declined from 2013-2017 compared to 2009-2012. However, this decline can be attributed to heavier slaughter weights resulting in longer feeding periods. As the industry increases in efficiency, more beef is produced per head using fewer inputs. This increase in beef produced per cow means a stable inventory that continues to drive economic growth.
In addition to several million head of cattle on feed at any given time other sectors have a significant presence in the panhandle. For example, over a quarter of a million cows were in the 26-county area annually from 2013-2017. Additionally, there were approximately three quarters of a million stockers in the 26-county area during the same time. Almost a million acres of winter wheat planted each year provide forage for calves and stockers prior to feeding.
The economic impact of cattle goes well beyond the value added in the feedlot and receipts from calf sales. The livestock processing sector also has a significant economic footprint. Industry leaders like Cargill, Tyson, and JBS, along with family-owned operators like Caviness Beef packers produce beef. There is capacity for processing of calves and cows on the Texas High Plains. Feedlots and processors employ a signifiant number of panhandle residents. For example, JBS’ beef production plant in Cactus employs more than 3,000 workers. Caviness Beef Packers, which has a planned expansion, will soon be able to process 2,600 head per day. In addition to their beef harvest facility, Caviness produces approximately 900,000 pounds of ground beef annually.
Each sector contributes a significant amount to the local economy. The cow-calf and stocker sectors are responsible for approximately $409 million in annual cash receipts each year. These cash receipts result in a regional economic impact of $723 million. Value added from fed beef contributes more to the High Plains economy than any other sector. In fact, value added from fed beef accounts for almost half of all cash receipts from agriculture on the Texas High Plains. Each year, value added from fed beef account for $2.4 billion in value-added, resulting in a regional economic impact of $4.2 billion.