Among those who participated in a “speed dating” session for Colorado producers and food buyers at the recent Colorado Food Summit was Luke Larson, owner of Centennial Cuts, a branded beef business near Keenesburg.
Larson sources calves from family owned dairies across the state and finishes them out in what he joked was his own version of a “Save the Jerseys” program.
In fact, the idea of blending beef and dairy enterprises in new ways is becoming a hot new trend across the nation.
Interest in the use of beef sires on dairy cows to increase calf value in particular is rapidly gaining momentum across the dairy industry, according to two Texas A&M Extension service specialists.
Jason Smith, an extension beef cattle specialist based at Amarillo, covered the topic recently at Southwest Dairy Day.
It’s estimated traditional dairy cattle make up approximately 20 percent of the beef market from finished cattle through cull cows. Traditionally, the best heifers are kept as replacement females, while the remaining dairy heifers and bull calves enter the beef supply chain.
Changes in packer demand for finished straight-bred dairy calves have driven a decline in their value, Smith said. A beef-on-dairy breeding program can add value to these calves by improving traits that directly impact the cost of gain and carcass value.
“It’s a hot topic right now in both the dairy and beef industry,” he said according to a report from Texas A&M. “With tight milk margins, dairy producers are looking for a way to add value and generate additional income in their system. With tight feeding margins, the beef industry is looking to determine exactly how and where these cattle fit into the production chain, and what their value is.
As adoption of the practice grows, we expect a greater number of these cattle to enter the supply chain in the very near future.”
Juan Piñeiro, a veterinarian and extension dairy specialist in Amarillo, said most progressive dairy farmers have already adopted the practice.
“They are using sexed dairy semen to build their heifer supply and beef semen to add value to the rest of the calf crop,” Piñeiro said. “The use of sexed semen and improvements in reproductive efficiency have led to a surplus of replacement heifers. Since dairymen have more dairy heifers than needed, they started utilizing the beef semen with a proportion of the herd to capture added value.”
As the interest grows, basically two things are happening, according to Texas A&M.
“The dairy industry is trying to figure out how to strategically use the practice, and the beef industry is in the process of determining the value of these cattle,” Smith said.
Dairymen say there is currently a substantial price differential between straight-bred and beef-on-dairy calves; beef-on-dairy calves typically have a price advantage of up to seven to 10 times that of straight-bred Holstein calves, Piñeiro said. The crossbred calves require less time on feed than straight-bred dairy cattle to reach a target end-point, thus reducing the use of natural resources and improving the sustainability of the production system.
Feeders are evaluating these cattle for health, growth and efficiency, while packers are looking at carcass quality, yield and cutout.
“These experiences will dictate the calves’ value, which is being determined as we speak,” Smith said. “There are already beef-on-dairy cattle in the supply chain, and there have been for a long time. But we certainly expect that number to grow substantially in the future, especially in regions where large dairies, calf ranches, backgrounders and feed yards coexist.”
“This presents a great opportunity to build relationships across the production sectors,” he added.
Researchers are hoping to identify which beef breeds work best in a dairy-beef crossbreeding system, he said, with emphasis being placed on trait complementarity.
For example, the introduction of beef traits is expected to address issues with mature size, growth performance, average daily gain, feed efficiency, carcass muscularity and yield among dairy breeds.
On the flip side, one of the positive attributes of dairy genetics is that retail products from dairy carcasses tend to be very uniform, whereas traditional beef cattle tend to be more variable, he said.
“The uniformity and predictability of retail product characteristics and cutout add value,” Smith said. “The dairy production system also provides a good opportunity for age and source verification.”
Typically, the dairy sells male calves to a calf ranch, which later sells them to a backgrounding yard, and finally they go on to a feed yard before the calves are sold to a packer.
“Dairies could consider retaining ownership of the calves throughout the live production chain,” he said. “There is certainly some economic risk involved, but if handled properly, that would allow a dairy to realize the added value of their beef-on-dairy calves and diversify the operation.”
Smith said while some beef-on-dairy calves have sold near the top of recent feeder calf markets, others have sold toward the bottom of the market.
“Genetics and calf care, as well as other value-added attributes, such as age and source verification, seem to be driving that difference,” he said