Historically high beef prices continue to play heavily in the dairy market. For the eighth consecutive year, heifer inventories at the beginning as of January 1 were lower than they were the year before. And that will continue to incentivize dairy producers to breed for the beef market while keeping more older cows in the milk herd, according to Sarina Sharp, analyst with the Daily Dairy Report.
According to USDA’s recent Cattle report, as of January 1, the national milk herd contained 3.905 million heifers, 11,000 fewer than last year. The number of heifers ready to calve and enter the milk herd dipped by 3,000 head to 2.498 million.
“Heifer numbers are the lowest since 1978 and illustrate the continued tension producers are facing with respect to cattle sales,” Sharp said. “Astronomical beef prices are encouraging the expanded use of beef-on-dairy breeding strategies to deliver crossbred calves that can be sold for high cash value.”
For example, Sharp said, values for crossbred calves, weighing between 70 and 75 pounds, were selling for as high as $1,700 each at a recent New Holland livestock auction. “These previously unheard-of values are providing a critical cash infusion to producers, particularly during a time of weak milk margins,” she added.
Shrinking heifer numbers also shed light on the growing milking herd, which last year, expanded by 212,000 head.
“With heifer numbers down, it has become increasingly apparent that the herd grew largely through delayed culling and keeping older animals in the herd through one more calving and lactation cycle,” Sharp noted. “Ultimately the market should respond to elevated beef prices by growing supplies. But given the time required to increase inventories, this change will be slow in arriving.”
The pressure to continue breeding for crossbred calves will keep heifer supplies limited if beef prices remain at historical highs, she said.
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