Beef- Dairy Crossbred Cattle Keeping Both Industries Afloat
Beef cattle numbers are down and milk prices have been on a wild ride. Between droughts, increased operational costs, and HPAI fears, cows and their caretakers have had to face quite a combination of obstacles. While the two cow industries have always crossed paths, now more than ever they have found stability in each other. Small beef herds have pushed cattle buyers to go looking for options in the dairy sector and the dairy industry has risen to meet beef demands by crossing Holsteins with angus.
Are these Holstein-Angus crossbred cattle simply what we have to work with amid current dynamics or is there something more long term being built here?
How Much Are Crossbred Cattle Worth?
In 2020 a Holstein calf was valued at $50 while a Holstein-Angus crossbred calf could be purchased for $200. By 2023 the same crossbred calves were being sold for $600 and in the spring of 2024 farmers reported buying calves for $800 and selling them at weight for $1,600 a head.
It’s a pretty big jump to make in market value, but not entirely surprising given the fact that cattle herds haven’t been this small since the 1950s. We need more beef, yet, ranchers are hesitant to expand herds with the cost of feed and fuel so high. Similarly, dairy farms have been struggling to stay afloat as milk prices fluctuate. The strategy seems to be, maximize what we’ve got to work with rather than take a risk that could stretch us too thin.
Dairy calves are considered a byproduct of the industry. Farmers have to replenish their herds, but typically only need 40% of their calves to keep the herd strong. The remaining 60% are sold. Heifers might be sold to another dairy facility, but steers make their way into the beef industry and are sold at cheaper prices than cattle specifically raised for meat. Holsteins need twice the amount of feed and end up producing smaller beef cuts than beef cattle. They don’t hold a high place of value.
And traditionally, packers don’t want to purchase Holsteins. They grow to be larger and bigger boned than beef cattle breeds. Processing plant equipment has to be calibrated to accommodate their size. One accommodation difficulty during processing can equal a $200 dollar loss per animal. A Holstein- angus bred cow is the happy medium. Steers that would otherwise be considered a byproduct are now valuable, processing plants can accommodate the smaller crossbred size, and the beef industry is bolstered by a new supply of cows raised for meat.
Thriving in the Short Term
Dairy farms that have been quick to pivot are thriving. Selling a crossbred steer for $800 is nearly seven times the going rate for a Holstein steer. The additional income is allowing dairy farmers to maintain operations at a time when these costs could have forced farms out of business. Instead, it's become another method for building an increasingly sustainable sector of agriculture.
The question is, how long will the intersection of Holstein and angus be such a prime location? Reports show dairy farms devoting upwards of 70% of their herds for crossbred cattle. While those same calves won’t have a home in the dairy industry, it’s highly unlikely they will maintain such a high value in the beef industry for the long haul. Eventually beef will rebound and the demand for crossbred cows coming out of the dairy sector will diminish.
So far the Holstein-Angus combo has yielded flavorful and aesthetically appealing cuts of meat. Consumers like the marbling and butchers are happy with the size of the cuts. When the beef market rebounds, these calves will still be valued higher than a Holstein calf. Even at a lesser price point the general consensus is that this is a win for an industry that seems to face more obstacles than others.
Will the Holstein-Angus Breed Keep Growing?
The sweeping shift has put replacement heifer numbers at their lowest in two decades. Prices at 2023 fall auctions were much higher than anticipated due to a 15% decrease in supply. The numbers are concerning since it would take several years to build back dairy cow herds to what they were before crossbred cows were in such high demand. Yet, with average operational costs hovering around $2,034 and sale prices ranging from $1,411 to $2,301the only hope of a dairy herd rebuild is if farmers can maintain operations. Crossbred cattle are making that possible.
Speculating on the growth of these crossbred cattle is nuanced. They are a new breed with their very own set of market obstacles. Color and size have been variables that affect market price. If the calf is born black it is more likely to be awarded the black angus brand which means it will sell at a higher price. If not, price points have been lower. It takes time to build the genetics but that is something that breeders are hoping to do so that more calves receive the angus brand.
The combo has also produced lung issues, liver abscess issues and meat contamination issues in some cases where premature lactation has occurred. In order for the market to grow these genetic issues would need to be significantly bred out of the Holstein-Angus combo. If it can be done then the crossbred market might have a more stable future.
Breeders also hope to appeal to sustainability focused consumers. Holstein calves raised for meat are a larger drain on resources than crossbred calves. Time to market is far shorter for a crossbred steer than it is for a Holstein. If the calves will be born anyway, is it better to continue breeding them to go to market faster?
At the end of the day, packers won’t buy the dairy on beef calves if they don’t have to. Necessity has fueled this unique demand and it may not last. A dairy farmer building a breeding program that includes crossbreeding for beef could build another leg of business and stabilize existing operations. On the other hand, putting too many calves in this program could make for a lack of options going forward if dairy herds continue to dwindle and the beef cattle industry rebounds.
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