Where’s the Beef ? Still in Omaha : Despite Pared-Down Volume, Stockyards Set National Trend

Although the city stockyards are merely a shadow of what they used to be, Omaha remains the capital of America’s meat industry.

Sales are made in the alleyways and in the 2,000 pens at the Omaha stockyards, or in auction arenas where auctioneers with rapid-fire, sing-song chants cry out the bids received for livestock.

As sales take place, eight U.S. Department of Agriculture market reporters jot down prices paid for cattle, hogs and sheep. Average daily prices are computed and sent over the wires to newspapers and radio and television stations throughout the nation as a daily barometer of the U.S. livestock market.

Even though the stockyards are a hectic place, the activity is substantially less than it used to be. During the 1940s and 1950s, it wasn’t unusual for the Omaha stockyards to have as many as 45,000 head of cattle, hogs and sheep in its pens on any given day. Today, 10,000 head is considered a peak day.

Despite massive changes in U.S. meatpacking, however, the industry still looks to Omaha to set the pattern for meat prices from Los Angeles to Bangor, Me.

“The Omaha livestock market has the dominant position in the whole scheme of things,” explained Virgil Mulligan, 50, a USDA market reporter here.

Until the mid-1950s, 95% of all livestock in the country was shipped to central stockyards, such as those in Omaha, for sale to packing houses. But then, many packing plants moved out of urban areas, and the meatpackers began buying directly from farmers and ranchers and from feedlots, which proliferated in the Midwest and Southwest. Only about 16% of U.S. livestock is sold at stockyards today.

“During the past 30 years the whole industry has gone through a dramatic change,” said James L. Smith, 55, president of the Omaha Livestock Market.

Vital Function

But despite all the changes, the stockyards that have survived continue to serve a vital function in the industry.

“Farmers still need a central market where they can sell all kinds of livestock,” said By Phillips, 56, spokesman for the Omaha stockyards. “A stockyard provides a great service to surrounding livestock producers because it offers buying power for a wide variety of livestock, not always easily sold in other places.”

And because Omaha is by far the biggest livestock market, it influences the industry from coast to coast. Cattle, hogs and sheep are shipped to the Omaha stockyards by truck from as far away as Montana, Utah, Arizona and Colorado. And the value of livestock sold at the Omaha market last year totaled $550 million--making the stockyards No. 1 in the nation in gross value paid to livestock producers.

In addition, Omaha is the country’s largest beef slaughtering center. Eight meatpacking plants located within two miles of the stockyards accounted for more than $1 billion in sales last year.

Omaha meatpackers slaughter an average of 7,500 head of cattle a day, livestock bought at the Omaha stockyards and directly from farmers, ranchers and feedlot operators throughout the country. (Omaha is strictly a beef packers’ town, however. Hogs and sheep sold at the Omaha stockyards are slaughtered at packing plants elsewhere.)

New York-based United Stockyards Corp. owns and operates the stockyards in Omaha and 10 other cities, thus handling 30% of all livestock marketed through central public stockyards in the United States. Its other major stockyards include Sioux City, Indianapolis, Stockton, Calif., and Portland, Ore.

Raymond French, president and chairman of United Stockyards, said the value of livestock sales through the company’s 11 stockyards during 1984 was about $2.1 billion.

“A stockyard company is like the New York Stock Exchange. It merely represents the place where the buyer meets the seller,” Phillips explained. “The company owns the real estate and facilities--pens, alleys, scales, loading and unloading docks, feed, water. In essence, it operates a livestock hotel. The employees move livestock in and out of the yards, move animals to and from pens and scales, operate auction arenas.”

At the Omaha stockyards, 24 independent firms handle the sale of livestock for farmers and ranchers, selling the livestock for a commission to buyers who represent packing companies, individuals, traders or farmers purchasing feeder livestock to sell later.

Towering over the 124-acre Omaha stockyards is the 11-story Livestock Exchange building, considered the nerve center of America’s livestock industry.

Within the huge H-shaped structure are offices for commission firms, commodity futures trading companies, livestock trucking firms, livestock transit insurance companies, feedlot firms, livestock traders and the Department of Agriculture.

The building also contains attorney offices, farm supply company headquarters, two banks, a printing company, a post office, the Nebraska Department of Veterinary Inspection Service, meeting rooms and a large dance hall.

And nearby are some of the finest steak houses in America.