Feed Grains and Livestock: Impacts on Meat Supplies and Prices
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The Department of Economic Science was founded in 1898 to teach economic theory as a truth of industrial life, and was very much concerned with applying economics to business and industry, particularly agriculture. Between 1910 and 1967 it showed the growing influence of other social studies, such as sociology, history, and political science. Today it encompasses the majors of Agricultural Business (preparing for agricultural finance and management), Business Economics, and Economics (for advanced studies in business or economics or for careers in financing, management, insurance, etc).
History
The Department of Economic Science was founded in 1898 under the Division of Industrial Science (later College of Liberal Arts and Sciences); it became co-directed by the Division of Agriculture in 1919. In 1910 it became the Department of Economics and Political Science. In 1913 it became the Department of Applied Economics and Social Science; in 1924 it became the Department of Economics, History, and Sociology; in 1931 it became the Department of Economics and Sociology. In 1967 it became the Department of Economics, and in 2007 it became co-directed by the Colleges of Agriculture and Life Sciences, Liberal Arts and Sciences, and Business.
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1898–present
Historical Names
- Department of Economic Science (1898–1910)
- Department of Economics and Political Science (1910-1913)
- Department of Applied Economics and Social Science (1913–1924)
- Department of Economics, History and Sociology (1924–1931)
- Department of Economics and Sociology (1931–1967)
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- College of Agricultural and Life Sciences (parent college)
- College of Liberal Arts and Sciences (parent college)
- College of Business (parent college)
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Abstract
Agriculture in the United States is undergoing a significant change. Grain, oilseed, and land prices have increased significantly, creating a subsequent increase in the income and wealth of many rural Americans—unless you are in animal agriculture. Feed is the largest single cost item for livestock and poultry production, accounting for 60%– 70% of the total cost in most years. Although energy, labor, and other inputs have increased, feed costs have increased anywhere from 40%–60% (depending on the species) in the last two years. As price takers in competitive markets, animal producers cannot simply pass their higher costs on to consumers. To date, rising costs have largely been absorbed by livestock and poultry producers, often with significant financial loss. However, higher costs of production will ultimately have to be reflected in higher prices for meat, milk, and eggs at retail counters in the United States and elsewhere. This adjustment process is complex, lengthy, painful, and not without unintended consequences. In this article we attempt to explain what is happening to feed costs, including the likely consequences of the recent ethanol boom on these costs and how the different sectors—beef, dairy, pork, and poultry—are adjusting to higher costs. Importantly, speed of adjustment will vary significantly as industries with shorter production cycles, such as poultry, are able to respond in a matter of months whereas adjustments in industries with longer production cycles, such as beef, can take a period of several years.
Comments
This is an article from Choices 23 (2008): 11. Posted with permission.