Beef on dairy becoming more common
DENVER — As the US cattle herd shrinks to the lowest inventory since 1951 due to prolonged drought and poor grazing conditions, feedlots are pulling from whatever source of cattle they can find, according to a recent CoBank Knowledge Exchange report.
The practice of using beef genetics in dairy reproductive programs — commonly referred to as “beef on dairy” — has steadily increased in correlation with the contraction of US beef cattle.
New data from the US Department of Agriculture’s Agricultural Marketing Service suggests the growing number of beef-on-dairy animals is contributing to higher cattle prices for producers and delivering added value to feedlots and processors.
In March 2024, USDA began tracking beef-on-dairy animals sold at public auctions. With the new pricing data, CoBank was able to provide an analysis to quantify the impact of beef-on-dairy on the cattle market.
CoBank’s report found that slaughter auction prices for beef-on-dairy cattle were slightly higher than for beef cattle and significantly higher than dairy cattle. The weight of beef-on-dairy animals fell between the ends of the beef and dairy cattle spectrum.
“The data also showed that beef-on-dairy cattle maintained the largest proportion of their value from feeder price to slaughter cattle auction price on a per hundredweight basis,” said Abbi Prins, livestock analyst with CoBank. “That’s an important financial metric for feedlots. We’ll have to see if these patterns hold over time as additional data becomes available. But preliminarily, it reaffirms the value proposition beef-on-dairy brings to the wider beef sector.”
While the beef supply is tight, demand remains robust, pushing cattle prices to record highs. Taking advantage of this opportunity, dairy producers are capitalizing on the higher prices and creating an additional revenue source by bringing more beef-on-dairy calves into the market.
Demand for quality beef
Perhaps, as Prins points out, the reason demand is so high is in part due to an emphasis on quality over the past decade. Prime beef production increased 140% over the past 10 years to reach more than 2 billion lbs produced annually as of 2024. Meanwhile, production of Choice grade beef, which makes up over three-quarters of the market, grew 20%, with nearly 16 billion lbs produced in 2024. Lower-grade meat like Select decreased 37% since 2014 to yield 3.17 billion lbs in 2024.
Many of the animals from dairy programs that utilize native beef genetics such as Angus can now qualify for branded premium programs. The specific contributions of dairy cattle to meat quality cannot be discerned from current publicly sourced data, CoBank’s report noted.
“Purebred beef cattle will remain the dominant source of the US beef supply, and that’s not going to change,” Prins said. “But considering the added value crossbred dairy-beef animals are bringing to market for all participants in the supply chain, it is unlikely the trend will slow any time soon.”