The dairy industry is currently undergoing a structural transformation. What was once a singular focus on milk production has evolved into a multi-faceted agribusiness model. As Kansas dairy producer Greg Bethard puts it: “We might be more ranchers than we are dairymen now, because the uterus has more value than the mammary gland.”
The Beef-on-Dairy Revolution
The most significant shift in recent years is the black calf phenomenon. With beef prices at historic highs, the revenue generated from crossbreeding dairy cows with high-quality beef genetics has upended the traditional P&L.
“We have cows spitting out $1,400 calves now,” Bethard says. “It has changed the math for the entire operation.”
This new revenue stream provides a buffer that allows dairies to remain profitable even when milk prices are disappointing. Idaho dairy producer Hank Hafliger has embraced this by breeding a large percentage of his herd to Angus crosses, while TJ Tuls of Tuls Dairy in Nebraska, has vertically integrated by raising his own steers to 680 lb. before selling them, capturing more of the value chain.
“Angus breed on our pro-cross cow yields have been really good,” Tuls notes. “We’re producing an amazing calf, and it’s definitely been a nice injection [into the operation].”
Technology as a Management Tool
While the AI buzzword is everywhere, these producers are selective about which technologies they adopt. For Bethard, three must-haves for managing large groups are sort gates, activity collars and milk meters.
“I would never want to build a dairy without those three,” he says.
Tuls is pushing the boundaries further by testing AI-driven cameras to monitor employee performance, animal movement and milking procedures. The goal isn’t just to watch people, but to ensure that the dairy’s specific protocols are being followed consistently, which protects both animal welfare and milk quality.
“At the end of the day, though, it’s feeding you data back, and it’s what you do with that information. Having really good people who go out and act on the data that it’s giving you back really makes a difference.”
Vertical Integration and Sustainability
Diversification is the key to long-term resilience. Tuls has aggressively pursued vertical integration, building a trucking company and, most recently, a milk processing plant.
“We’re looking at how we can serve our own businesses,” Tuls says.
This includes a high-protein, low-sugar milk product that is already expanding across the Midwest and West Coast.
Sustainability has also become a revenue center rather than a cost. Tuls’ digester projects now produce enough gas to heat 6,000 houses per year. In Idaho, Hafliger is focusing on innovative manure management, working with scientists to extract micronutrients from manure to create new value-added products.
“In Idaho, manure management is going to be huge. We’re doing a lot of innovative studies, pulling out micronutrients out of our manure and utilizing it. That’s what we really need to focus on,” Hafliger shares.
The Water Constraint
Perhaps the most sobering topic during Milk Business Conference panel was the future of water. In Idaho, Hafliger notes that “water is king,” with every well metered and allocations strictly controlled by the state. Bethard, operating in the High Plains of Kansas, is already strategizing for a future with less water by transitioning his crop rotation toward wheat and soy, which requires fewer inputs than corn silage.
“We have to make sure that 30 years from now, we can still milk cows where we are,” Bethard says.
This long-term thinking — balancing immediate revenue from black calves with the existential reality of resource management — is what separates the top-performing producers from the rest of the field.
The modern dairy is no longer a single-commodity enterprise; it is a complex ecosystem of logistics, genetics and resource stewardship. By leveraging immediate windfalls like the beef-on-dairy market to fund long-term investments in technology and vertical integration, producers like Bethard, Tuls and Hafliger are doing more than just chasing margins — they are future-proofing their legacies. In an industry where water is becoming as precious as milk and data is as vital as feed, the successful producer of 2026 and beyond will be the one who balances today’s black calf revenue with the existential necessity of long-term resource management.
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