The shortage of beef cows is an area where some dairy farmers are cashing in. Beef-on-dairy is a concept that has been around for years. However, when the beef cattle herd began to shrink, dairy producers saw it as an even bigger revenue stream.
Dan Basse, President of AgResource Company, thinks the beef market will continue to make record highs into next year. And as that happens, black calves from the dairy side of the equation will also be in high demand.
“Our problem is as we model out the beef herd, we only see modest expansion as [beef producers] keep back some cows. But the beef herd has a long way to go,” Basse says. “So as we think about it, this will take three to four years at a minimum [to build back the beef herd.] Dairy producers are still not retaining heifers to a degree that gives us the opportunity to really accelerate beef production anytime soon.”
Basse adds that the only real concern for beef prices is demand as foot traffic at higher end restaurants has tapered off over the last several weeks.
