Packer

The Packer’s Dream: How Beef-on-Dairy is Solving the $2 Billion Consistency Problem

Wed, 22 Apr 2026 13:13:05 GMT

When Brad Kooima of KKV Trading spoke to “AgriTalk” in late January, he described beef-on-dairy as the “gorilla in the room.” But it wasn’t just the volume that caught his attention; it was the control.

“For the first time, you got an integrator that has the ability to control that thing from its birthday and schedule it out 341 days later that we’re going to slaughter that thing,” Kooima said. “Once a dream that the packers chased.”

That dream is now a reality, according to data presented at this year’s High Plains Dairy Conference. For decades, the beef industry has struggled with the fragmented nature of the native cow-calf sector — thousands of small herds with different genetics, different calving seasons and massive variability at the rail.

Ending the War on Variability

Lauren Kimble, manager of ProfitSOURCE Supply Chains for Select Sires, Inc., highlighted the greatest strength of the beef-on-dairy movement is its ability to kill variability.

“I care deeply about consistency ... variability is the enemy,” said Sidney Abbot of OT Feedyard & Research Center, a sentiment echoed throughout the conference.

The data proves why. While the total U.S. fed cattle harvest is a mixed bag of quality, program-specific beef-on-dairy is hitting 40% Prime and 59% Choice. Because these calves are born on dairies that operate like clockwork, they offer the packer something the native beef industry rarely can: Year-round market supply and uniform carcasses.

The Factory Floor of Beef

In the Texas High Plains, where over 25% of the nation’s fed cattle are processed, the shift is undeniable. Data from Laphe LaRoe of Smith Cattle Company shows while native cattle inventories are plummeting, the beef-on-dairy line is climbing.

By 2026, the dairy barn has effectively become the factory floor for the beef industry. Because a dairy cow calves every day of the year, the integrator (the dairy producer) can provide a steady, predictable stream of high-quality protein to the packer every single week. There is no calf crop season. There is only a continuous, scheduled flow.

This isn’t just a marginal gain; it is a fundamental shift in the dairy business model that allows for this factory-like precision. Ken McCarty of McCarty Family Dairy in Kansas says the transition from Holstein bull calves to high-value beef-on-dairy crosses has rewritten their balance sheet. McCarty Family Farms was recognized as the 2025 Milk Business Leader in Technology Award winner for transforming their operation into a high-tech, 20,000-cow operation driven by innovation, data and bold decision-making.

“Bull calf sales went from something that you basically ignored in your budget to something that really today accounts for, depending on the month in the market, somewhere around 50% of our overall revenue,” McCarty says.

When half of a dairy’s revenue is tied to the beef side of the barn, the producer is no longer just a milk man — they are a high-stakes beef integrator with every incentive to meet the packer’s demand for perfection.

Systems Capture Value

As Troy Marshall of the American Angus Association notes: “Genetics create potential. Systems capture value.”

The system is the ability to track a calf from its specific beef-sire breeding date through a standardized calf-raising program, into a professional feedyard, and onto a rail where it hits Certified Angus Beef (CAB) specs with surgical precision.

By 2026, the industry isn’t just selling cattle; it’s selling predictability. For the packer, a beef-on-dairy calf isn’t a gamble — it’s a scheduled delivery of a high-marbling, consistent product that meets the consumer’s demand every time. The gorilla in the room isn’t just big; it’s incredibly disciplined.

Cargill Announces Closing of Milwaukee Ground Beef Facility

Thu, 12 Feb 2026 22:25:15 GMT

Cargill Meat Solutions Corporation announced it will permanently close its protein processing facility in Milwaukee, Wis. This closing is expected to result in the permanent elimination of approximately 221 positions.

A Cargill representative reports the company made the difficult decision to close its Milwaukee ground beef facility to better align its portfolio with current customer demand and prioritize investments where they are needed most for the future.

“We recognize the impact this decision has on our 221 employees, and our focus is on supporting them with respect, care and assistance as they navigate this transition. Moving forward, we will shift ground beef production volume to our other North American beef processing facilities, including the nearby Butler, Wis., plant, to continue reliably serving our customers.”

The Milwaukee plant specializes in producing ground beef patties, loaves and chubs. The plant came under Cargill’s ownership with the 2001 acquisition of Emmpak Foods Inc.

According to the WARN notice , Cargill expects to begin the process of winding down operations soon, with production stopping on or around April 17 and the plant fully closed on or around May 31. Separations will happen in phases, based on customer and operational needs. The first employee separations are expected to be April 11.

Impacted employees may apply for open jobs at other Cargill facilities. Employees who exit the Company through this plant closing will be eligible for a severance package.

Are We Seeing Signs of Herd Rebuilding?

Mon, 15 Sep 2025 16:41:54 GMT

The U.S. beef cow inventory has reached its lowest point since 1962, marking what appears to be the bottom of the current cattle cycle. Tight supply is driving the strong pricing environment beef producers are enjoying today.

“For cow-calf producers right now, things are as good as they’ve probably ever been,” says Troy Rowan, University of Tennessee assistant professor. “Even though things are really good, producers are conscientious and vigilant about potential challenges,” Rowan summarizes.

Agreeing with Rowan, South Dakota cattleman Ken Odde adds while profits are currently strong, inflation quickly erodes economic gains. He stresses the importance of risk management and diversification.

Early Signs of Herd Rebuilding?

This is the million-dollar question: Are there encouraging signs of expansion?

“The beef industry is not currently in herd expansion mode, with producers hesitant to retain heifers due to high costs and economic uncertainties,” says Dave Weaber, Terrain senior animal protein analyst.

In Drovers State of Industry Report to be released the week of Sept. 15, we breakdown the July USDA cattle inventory and cattle on feed reports. While the USDA reports showed the smallest U.S. herd in history and continuing tightening numbers on feed, analysts predict producers have not experienced the highest cattle prices, yet.

“Our national herd size has the industry at an interesting point,” Rowan says. “Prices are at all-time highs, inputs are reasonable and more cow-calf enterprises are profitable than ever. When the industrywide rebuild will happen remains up in the air, but producers are keeping in mind that the high-flying industry right now is not going to stick around forever. They’re starting to adopt new technologies, leveling up their crossbreeding programs and expand opportunities for non-cattle related income on their ranches.”

Weaber adds producers need to be intentional about herd expansion, understanding the financial implications of adding new cattle.

Beef-on-Dairy Fills the Beef Supply Gap

“The current dynamics of supply is going to be a challenge,” says Jarrod Gillig, Cargill senior vice president, managing director for beef.

Gillig summarizes the cattle industry is experiencing a critical period of transition. He doesn’t expect the cow herd to return to previous peak levels of 32 million head. Instead, he predicts the gap in supply will be filled by beef-on-dairy calves.

Nick Hardcastle, Cargill senior director of meat grading and technical specialist, explains how the beef-on-dairy calves are an upgrade to the traditional Holstein steer and the positive impact they are making on beef supply.

“Beef-on-dairy is more desirable because it helped overcome several Holstein difficulties,” he says. “Improvements include red meat yield — more meat to a consumer — as well as improved acceptance in branded programs.”

Hardcastle says the beef-on-dairy cattle are filling the supply gap by filling pens in the Plains states where feeders are needed, and they are widely accepted by feeders and packers.

Defining Future Beef Producer Success

Odde says the beef industry is not just surviving but positioning itself for significant transformation.

“Producers who remain flexible, technologically savvy and strategic in their approach will be best positioned to thrive in this changing environment,” he says.

Weaber agrees saying successful producers will be those who can adapt, manage costs effectively and align themselves with evolving market trends.

“Don’t let cost get away from you,” Weaber warns, emphasizing that “being a low-cost, high-productivity producer means you get to make money seven, eight or nine years of the cycle.”

He stresses the importance of understanding financial implications, particularly during market transitions.

“If we’re not working on the business, we can’t work in the business,” Weaber adds, summarizing his philosophy regarding producers’ need to adopt more strategic, data-driven approaches.

The State of the Beef Industry Report includes input from nearly 500 beef producers. The annual report provides information to help producers when making decisions. Click here to download the full report.

Your Next Read: 47% of Beef Producers Plan to Increase Herd Numbers

Why Aren't High Beef Prices Causing Sticker Shock With Consumers?

Wed, 23 Jul 2025 17:10:10 GMT

Gound beef prices across the U.S. continue to reach new highs. Retail prices for ground beef hit its highest level in history in June climbing above $6 per pound, while steaks were up 8% at $11.49 per pound.

(Bureau of Labor Statistics )

“The record high retail beef price reported by the most recent Consumer Price Index (CPI) has prompted a lot of calls about why prices are record high and whether there is any relief in sight,” says David Anderson, Texas A&M Extension economist for livestock and food product marketing. “While we often write about the great cattle prices for producers who are selling, there is a flip side, and that is consumers who are buying beef.”

Anderson explains reduced slaughter and beef production, especially in the second quarter of the year, cut supplies just as grilling season heated up for seasonal beef demand. The combination led to a spike in wholesale prices and retail beef prices.

Don Close, Terrain senior animal protein analyst, says: “What we have seen so far is consumers have been incredibly loyal to protein collectively, but they have been especially loyal to beef, and beef is actually continuing to gain market there, even at the current prices at the expense of the other protein.”

Wages Are Keeping Pace With Beef Prices

Close says when he correlates the monthly all fresh beef price to hourly wages he found they are in lock step.

“Yes, beef prices have escalated, but beef prices have not risen any faster than the improvement in overall hourly wage,” he explains. “So from the consumer’s perspective, their share of their paycheck committed to beef is essentially the same as it’s been on a comparative basis for years.”

(Don Close, Terrain )

Other contributing factors to beef demand include consumers’ craze for protein and the impact of GLP-1 diets on protein consumption.

Scott Varilek, Kooima Kooima Varilek, says: “I think beef demand has just proven time and time again — hey, consumers want it. It’s a great healthy protein, and I think it’s got a lot of good traction here over the last year of being a good quality source of food.”

High Quality Attracts Consumer Spending

Plus, with 82% to 84% of the beef produced grading Choice or better, the high quality of beef is pushing demand.

“I don’t see any weakness really in the consumers or their spending habits,” says Mike Minor, professional ag marketing. “We actually are eating more Prime meat today than Choice for the first time ever. So, people like their expensive meat still.”

How Long Will High Cattle and Beef Prices Last?

Last week USDA reported average fed cash cattle prices hit the second-highest level in history at $237.78, up 57¢ from the average the prior week.

The high cattle and beef prices continue to be driven by tight cattle numbers, the Mexican boarder closing due to New World screwworm and looming import challenges.

Yet, Close says the role of strong demand can’t be ignored and is likely to continue.

“I think it’s certainly through 2026 and really more realistic somewhere deep into 2027,” he adds.

Anderson explains normal seasonal production and demand would suggest prices falling from recent highs. Evidence from the wholesale beef market over the last couple of weeks indicates lower prices.

“Seasonal price patterns would suggest that there is a chance for a little bit of relief from record high beef prices,” Anderson says. “But, only if we compare to the peak price this summer. Wholesale beef prices are already declining.”

He adds there is a time lag from lower wholesale prices showing up at retail, but lower wholesale prices combined with normal seasonality of various cut prices should lead to the expectation of falling prices in the coming months.

“But, it’s not likely that prices will decline below year-ago levels,” Anderson emphasizes.

Inventory Reports Release on July 25

Close says more will be known about supply levels after the USDA Cattle on Feed and Cattle Inventory reports on Friday.

“While market analysts expect lower placements, marketings and cattle in feedyards than a year ago, the really interesting number will be the number of heifers on feed on July 1,” Anderson summarizes. “The heifers on feed will provide some insight into heifer retention. Also, look for placements in Texas due to the ban on Mexican feeder cattle. The lack of spayed heifers coming from Mexico is important in evaluating the number of heifers on feed.”

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Liver Abscesses in Beef-on-Dairy Cattle are Costing Packers Big Money

Mon, 22 Apr 2024 14:54:48 GMT

The beef-on-dairy phenomenon has seen explosive growth, especially as dairy producers look to diversify their operations and capitalize on high beef prices. However, no rose grows without a few thorns. And the thorn in the side of this new sector of the dairy industry has been the prolific amount of liver abscesses found in these crossbred cattle.

For dairy producers, this common health issue amongst beef-on-dairy animals does not necessarily have a big impact on their bottom line. But according to Dr. Blake Foraker, an assistant professor and meat scientist at Washington State University, this growing problem is costing packers two main things – time and money.

Time

“Liver abscesses are a big nuisance for packers because it really slows them down,” Foraker says. “In our beef-on-dairy population, we’re seeing liver abscess prevalence in 50% or more of animals. And this is holding up the production line.”

Carcasses with liver abscesses must have the organ removed manually by workers. Additionally, it must be inspected to see if the abscess has adhered to any other surrounding tissues. In turn, the extra time needed for the removal of tissue and further inspections adds up, slowing down the production line and potentially reducing the number of animals that can be processed through the facility each day.

“Time is of high importance to these packing plants,” Foraker says. “And liver abscesses, especially the severe cases, can cause a lot of rail-outs and cost packers a lot of additional time. So, this issue is something that they would really like to have resolved.”

Money

With the number of native beef animals in limited supply due to ongoing pressure with persistent drought, dairy farmers have been able to help keep meat cases full with the help of these beef-on-dairy cross animals. And while the meat from these cross animals is similar, and in some cases, more valuable than conventional beef, liver abscesses have been tainting one of the most valuable cuts of meat – the skirt steak.

“What will happen is a liver abscess will become so severe that the outside skirt muscle will adhere to the liver. In 2023, that skirt steak muscle was listed as the second most valuable cut of meat on a per-pound basis, coming in behind the tenderloin. So if packers have to cut this portion of meat out, then they are throwing away a high-dollar product,” Foraker says.

According to the beef-on-dairy specialist, dairy producers may only notice a small dock in price on the final hanging weight for their beef-on-dairy animal that had a liver abscess. However, the packers are seeing a much larger loss if additional meat needs to be trimmed.

“The outside skirt muscle, even though it only comprises about five pounds of a carcass, is worth around $12 a pound. If we have to remove that muscle because it’s adhered to the liver because of a liver abscess, then that’s about $60 per animal, which is rather significant,” Foraker says. “Now if you’re paid on a carcass weight basis, that’s only $14 to you for losing five pounds because this trimming has to occur before the pay scale at the packing point. But if you’re a packer, you’ve just lost $45 because there is now no longer an outside skirt steak from that carcass.”

According to Michigan State Extension Beef Specialist, Jerad Jaborek, livers condemned at slaughter represent an annual loss to the U.S. beef industry of more than $60 million. And that does not take into account the approximately 5-15% ding to average daily gain, and the 9.7% reduction in feed efficiency they also actuate.

“Packers are working to identify producers that are doing a good job at minimizing the prevalence of liver abscesses in their beef-on-dairy animals,” Foraker says. “Once those producers are identified, the packers are more likely to want to do business with them over a producer who is known to supply animals with this issue. So this liver abscess problem is something dairy producers certainly need to keep their eye on.”

For more on Beef-on-Dairy, read:

Packer Lawsuits Will Be Consolidated Into One

Fri, 20 Nov 2020 05:49:55 GMT

Three lawsuits filed against America’s largest beef packers can be consolidated, a Minnesota federal court ruled last week (July 10, 2019).

U.S. Magistrate Judge Hildy Bowbeer said in a nine-page order the court will oversee three proposed class actions filed by ranchers and industry groups that claim beef packers colluded to suppress prices and violated federal antitrust laws.

On April 23, 2019, R-CALF USA filed suit in Chicago against Tyson Foods, Inc., JBS S.A., Cargill, Inc., and National Beef Packing Company, LLC, and certain of their affiliates alleging that from at least January 1, 2015 through the present, the packers conspired to depress the price of fed cattle they purchased from American ranchers, thereby inflating their own margins and profits.

Three days later in a Minneapolis court the same packing companies were accused in a consumer class action lawsuit of a similar price-fixing scheme. That suit, Wright et al. v. Tyson Foods Inc. et al., claims all consumers who bought any fresh or frozen beef products may be entitled to reimbursement. The suit alleges the packers forced consumers to pay inflated prices for steak, hamburger and other beef products.

A third lawsuit was filed May 9, 2019, by Michael Sevy, who claims that, as a live cattle futures trader, he “suffered damages from a manipulated live cattle futures and options market.” The suit alleges, “Plaintiff suffered monetary losses by transacting in live cattle futures and options at artificial prices directly resulting from packing defendants’ conduct, including their suppression of fed cattle prices.”

Sevy’s lawsuit alleges the companies’ conduct had the effect of “manipulating the prices of live cattle futures and/or option contracts traded on the CME” in violation of the Sherman Act.

All three of the lawsuits allege beef packers colluded to suppress beef prices in part by agreeing to reduce slaughter volumes and curtailing purchases. The plaintiffs said the collusion caused an unprecedented drop in fed cattle prices in 2015.

Other price suppression tactics the meatpackers allegedly have deployed include importing large numbers of foreign cattle, purchasing cattle during a narrow 30- to 60-minute window on Fridays and slashing slaughter volumes.

Previously, Tyson spokesman Gary Mickelson said in a statement, “We’re disappointed this baseless case was filed. As with similar lawsuits concerning chicken and pork, there’s simply no merit to the allegations that Tyson colluded with competitors.”

A previous statement from Cargill said: “For many years, Cargill has served as a trusted partner to American cattle ranchers, committed to supporting their family farms and livelihoods. We believe the claims lack merit, and we are confident in our efforts to maintain market integrity and conduct ethical business.”

An obstacle to the success of these lawsuits is previous packer investigations, including a 2016 U.S. Senate Judiciary Committee review of the decline in cattle prices. The committee said it found no evidence of collusion.

And just last year the U.S. Government Accountability Office looked into the matter at the behest of the Judiciary Committee. The office reported that its analysis of the data “indicated that competition levels among packers that slaughter and process fed cattle did not appear to affect the national price changes in the fed cattle market.”

Related stories:

R-CALF Sues Tyson, Cargill, JBS And National

Consumers Sue Beef Packers, Allege ‘Price Fixing’

Cull Cows: More Than Hamburger

Fri, 20 Nov 2020 05:42:12 GMT

Cull cows have been somewhat overlooked in the grand scheme of beef production. While seen mostly as walking hamburger, cull cows are contributors in other ways.

“An awful lot of people think that cows are a by-product of our industry and that most of the carcass is made into ground beef. Pont of fact, that’s not actually correct,” says Keith Belk, meat scientist for Colorado State University.

Belk spoke about the various uses of cow beef during the Cattlemen’s College at the Cattle Industry Convention in San Antonio, Texas.

Arby’s roast beef is an excellent example of the type of lean beef consumers can get from cows. The roast is considered a sub-primal and is completely diluted of all fat before being brined, cooked and sold.

“These products are hugely valuable to the industry, so it is important for everyone to realize how much of the carcass is used as whole muscle cuts,” Belk relates.

In an audit performed at 19 plants specializing in processing cows, more than 43% of the product marketed came in the form of whole muscle products.

Recently there has been a shortage on cow beef with producers holding back females in an effort to increase herd numbers. This has led to increased price pressure on cull cows.

This type of situation makes it appealing to feed cull cows on a higher plane of nutrition that will fall into the white cow classification at packers. “The idea is you feed that high concentrate ration and basically turn the fat color from yellow to white,” Belk adds.

There is also an opportunity to improve the growth of cows through the use of implants and other growth promotants that increase compensatory gain.

Belk says cows should be in good condition before being sold. A body condition score of from 3 to 5 would be ideal.

Cows also need time to replenish their muscle supply, so don’t market them right after calving.

Other notes from Belks presentation:

Cow carcass prices are seasonal and spike around the holidays, typically around days like 4th of July, Labor Day and Thanksgiving.
38.1% of market cows and bulls are purchased directly from the farm or ranch, while 61.9% come from sale barns.
Cuts from the round carry a lot of value in cows because of the leanness.
Think about branding on areas of the hide that won’t ruin the leather which is of high value. For instance branding up high on the hip would be better than on the ribs.
Bruising is the #1 quality challenge Caviness Beef Packers in Amarillo, Texas, faces.

FDA Issues Warning Letter To JBS USA

Fri, 20 Nov 2020 05:24:47 GMT

The U.S. Food and Drug Administration has issued a warning letter to JBS USA concerning its Souderton, Pennsylvania, rendering facility. The FDA urges JBS, which does business as MOPAC, to take corrective actions to stop continued production and sale of beef tallow contaminated with pentobarbital, used by veterinarians to euthanize animals, including companion animals, horses and cattle.

FDA issued the letter after multiple investigations at the JBS Souderton facility. According to the FDA, pet foods containing even a trace amount of pentobarbital are considered adulterated. It is against federal law to release “adulterated” products into the stream of commerce.

FDA alleges that MOPAC continued to sell adulterated products after receiving formal notification of pentobarbital contamination from a customer on Feb. 13, 2018, and after formal notification of positive pentobarbital samples from the Pennsylvania Department of Agriculture on or about April 5, 2018.

According to FDA, MOPAC said that as of May 2018 it had made several changes to try to correct the problems, including requiring suppliers to sign guarantees that they do not pick up euthanized animals to extensive tank cleaning to random testing of tallow. But the agency collected a sample on August 2018 from a tank that was positive with trace levels of pentobarbital, indicating the company’s efforts were not sufficient. Samples taken at customers’ facilities also indicated levels of pentobarbital, FDA said.

MOPAC was given 15 days from receipt of the April 23 letter to respond with a list of steps the company has taken to correct the issues.

The company said it is cooperating with FDA.

Related stories:

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Trusteed IRAs: why they are popular, who should consider them, what benefits they offer

Fri, 23 Sep 2022 20:01:45 GMT

Q: I’ve heard a lot about trusteed IRAs. How do they differ from traditional IRAs?

A: Simply put, trusteed IRAs offer potential tax benefits of traditional or Roth IRAs with the protection and control of a trust. They provide tax advantages that stretch into the future and offer the ability to control how, when and in what amounts assets are distributed. Trusteed IRAs have become more popular given some of the inherent limits of traditional IRAs and the growing prevalence of self-directed retirement accounts combined with the decline of pension plans. They also are more cost-effective than setting up a trust and are generally more compliant with tax laws.

Q: Who should consider a trusteed IRA?

A: There are several reasons why someone should consider a trusteed IRA, the most consequential of which is if an owner has an interest in controlling assets and realizing tax benefits beyond their lifetime. This can mean an owner is concerned with the financial discipline or sophistication of heirs.

Other reasons include if an owner remarries and wants to provide for a current spouse as well as children from a previous relationship and/or is concerned about IRA management in the event of incapacitation.

Q: I’m in the middle of estate planning. How can a trusteed IRA help with the process?

A: They can help process if only to preserve the potential tax-advantaged accumulation of IRA benefits to pass on to heirs. Under traditional or custodial IRAs, a beneficiary is required to withdraw at least the Required Minimum Distribution (RMD) each year. However, a beneficiary may withdraw additional amounts, for any reason, at any time—and incur possible fees or tax penalties.

Additionally, owners can restrict payouts to a beneficiary to the RMD, enabling it to operate as a spendthrift trust. At the owner’s death, the trusteed IRA would be automatically split into separate accounts for individual beneficiaries, with distribution terms defined for each account.

Another benefit is that estate plans don’t need to be rewritten or updated; trusteed IRAs can be added independent of an estate plan to protect IRA assets which legally pass outside of wills.

Q: Is a trusteed IRA better suited to farmers or owners of farm assets?

A: Not expressly, but a trusteed IRA can play an important role in legacy planning and preservation of farm assets over multiple generations. Given the growing generation gap among farming families, trusteed IRAs could be a way help preserve farm family values over generations from beyond the grave. Moreover, as farm economics continues to change, farmers may find value in the highly customizable nature of trusteed IRAs. In the event of a divorce in the family, for example, assets can be made to not leave the family’s bloodlines.

Q: Are there any downsides to trusteed IRAs?

A: Given that a trusteed IRA requires a corporate trustee, it’s harder to change ownership and family members cannot be named as trustees. Not all financial institutions offer trusteed IRAs so they may not be widely available to interested clients. Additionally, while they offer greater customization and more control, trusteed IRAs carry some limits. To have the highest level of customization and control, a trust would need to be created.

Please send questions, comments or requests to address a topic or issue to Rees Mason at rees.mason@ml.com.