The Effect of Increasing Transportation Costs on Florida's Cattle Feeding Industry: An Extension Application

Abstract

Rapid fuel price increases in 1979 and early 1980, along with concern about further rises, have led to speculation that Florida, a net calf exporter but net importer of finished cattle and beef, will be increasingly competitive in finishing cattle to slaughter weight. This hypothesis is strengthened by recognition of significant structural changes in the Florida cattle feeding industry since the late 1960s, as large-scale feedlots were developed and smaller-scale feeders declined in importance (Simpson and Baker). Furthermore, yield improvements and new techniques, such as the use of bagasse for silage and feeding of high-moisture corn, have been adopted in the production of Florida feedstuff s. There is no crucial evidence showing differences in investment or operating costs between Florida and the major cattle feeding areas because of the relatively large size feedlots in Florida that allow them to take advantage of substantial economies of size (Simpson, et al.). This paper evaluates the potential effect that increased transportation costs, as a result of higher fuel prices, might have on Florida's competitive cattle feeding position.