The dairy industry is amazing in advancing technology to keep production profitable and consumer prices reasonable. Prior posts have covered improved milk per cow, higher levels of butterfat and protein, hybrid cows to enhance productivity, changes in fluid milk to increase consumption, transfer of butterfat from cheese makers milk and relocating it to butter churners, etc. Now, the trend is “beef on dairy”. This post will cover how “beef on dairy” works and has financial benefits.
Calf raising is an integral part of most farms. Dairy cows like Holsteins and Jerseys are great for milk, but they do not develop prime meat. It is typically ground and used in fast food restaurants for hamburgers. Meat from Angus breeds is much higher quality and commands a higher price.
The new technology uses semen from beef steers like Angus and inseminates dairy cows like Holsteins. The meat from these hybrid calves is a much higher quality and commands a much higher price. As a result, calves have a much higher value. The veal calves get significantly higher prices and cull dairy cows also get a higher price. The financial success varies as the technology is new. One of the varying factors is milk volume. For instance, the volume of milk per cow from “beef on dairy” in some cases is reported at 1% lower and in other studies it is reported as much as 50% lower milk. The dairy cows have a higher butterfat percent in their milk. Raising “beef on dairy” calves is different from regular Holstien or Jersey calves. Many things like feeding need to be managed differently. Properly managing is essential.
Supply and demand in dairy are hard to keep in balance. In a capitalistic environment, balance is achieved financially (e.g. lower inventories raise prices). Butterfat has been in short supply, and the prices have been at record highs. The balance is now improving, and butterfat prices are declining. Beef prices are very high as inventories are low. “Beef on dairy,” will provide a greater supply of quality meat and bring balance to inventories of quality meat. With “beef on dairy”, the supply and demand for quality meat may balance faster.
Because “beef-on dairy” cows can be sold at a good price, the producer is not dependent on dairy prices alone for revenue. In a sense, producers are running two businesses, meat and dairy and can take advantage of the variations in pricing. It does make the production cycle more complicated, but if managed properly, it can be financially advantageous.
Beef prices have been very high as inventories are low. With “beef-on-dairy,” the high prices of quality beef will start to decline with a greater supply of quality meat. Managing “beef on diary” as meat prices decline may alter the use.
