Rapidly Growing Beef-on-Dairy Segment Holds Promise for All Stakeholders
While America’s dairymen are rapidly embracing beef-on-dairy breeding programs, cattle feeders are learning to embrace cope with both the opportunities and challenges the new crossbreds represent.
For instance, black-hided cattle at the bunks are a dramatic change for Arizona cattle feeder Paul Heiden.
“We have been 100 percent Holstein yard the last 20 years,” Heiden says. “Now we are feeding a growing percentage of cattle that are Angus x Holstein.”
The switch was due to both the benefits of the crossbreds and also availability.
“Over half the calves offered at the auction we use in California are beef-on-dairy crossbreds,” he says.
Future Expectations
Indeed, beef-on-dairy is arguably the most significant advancement for America’s beef industry in a generation, and many believe it has been significant enough that it may alter the cyclical impact the beef industry is experiencing from drought-forced herd reductions. For instance, Patrick Linnell, analyst for CattleFax says his group estimates the industry will produce 2.92 million beef-on-dairy calves this year and 3.22 million in 2024. (See chart.) Some industry observers believe those estimates may be conservative.
“We expect the adoption of beef genetics in dairy breeding programs will accelerate as producers capitalize on the opportunity for improved margins, particularly given the reduction in beef calf availability,” said Brian Earnest, lead animal protein economist for CoBank. “And while the impact on the overall beef supply will be relatively small, an increase in beef and dairy crossbred calves entering the beef supply chain is something cattle feeders and packers will want to keep an eye on.”
Regardless of the exact number, Dale Woerner, animal and food science professor at Texas Tech University, says, “the number will continue to grow as the beef cow herd shrinks.”
That’s due, primarily, to the growing acceptance of beef-on-dairy calves by both cattle feeders and beef packers, and the realities of empty pens and shackle space the industry faces over the next few years.
Financial Gains
“Right now, everybody needs cattle,” says Jared Wareham, North America NuEra Business Development Manager at Genus ABS. “The beef-on-dairy crosses, especially the good ones, are in high demand.”
For dairies, the financial benefits of the crossbred calves is immediate. On average, day-old beef and dairy crossbred calves sell for $100-$300 more than their 100% dairy-bred counterparts.
“Yes, they cost more,” Heiden says, “but you make it up in feedyard performance, and they are generally healthier calves.”
Heiden says the beef-on-dairy crossbreds also produce better beef yields, a key benefit as all of his yard’s cattle are sold to JBS on a carcass basis.
