But crossbred calves, from a Holstein heifer and beef breed bull, are commanding a premium. “Why wouldn’t you do this? Even if it’s a one-degree premium. The price per head is what you’re interested in.”
Unlike the dairy sector, which has set endpoints, the beef market is more fluid. Dairy farmers looking to enter the crossbred beef market have options for doing so and can raise the calves and enter the market at many weights and ages.
Depending on the market, beef cattle can be sold at different ages and weights. Newborn calves under 3 days old can go directly to growers; calves of 300 pounds can be sold to grazing operations, primarily in the Midwest; older calves can be sold to stockers, and the potential is there to sell directly to the feedlots for finishing or to the packinghouse.
It all depends on market demands and what best fits your existing dairy operation. Raising the beef calf from newborn to about 250 pounds costs the most. The cost of gain decreases as the animals move into higher weight categories, Baker explained.
Determining exactly where crossbred beef is going, and the economics of entering the sales market at different weights, is still an unknown. The challenge is that crossbred dairy beef is a new market and is still in its infancy, so “it’s still being invented,” Baker said. “There’s not as much play with crossbreds, but there is play. There’s indication that there’s some profitability there.”
Developing the market
If dairy producers want to raise or market crossbred calves, they should familiarize themselves with beef cattle logistics. It seems the crossbred market is “financially competitive to what beef is doing,” Baker said. The market follows the same seasonal pattern, with high prices in spring and low points in September and December, based on auction numbers from the Finger Lakes region of New York.
The beef market is about large numbers of calves being sold together rather than individual sales. In New York, as well as other dairy-centric regions, marketing calves is typically done a few at a time. However, the beef world demands a consistent supply of high-quality calves, and marketing is done in larger groups. Commingling calves is a realistic possibility, particularly if the genetics for crossbred beef are standardized.
Attempting to sell black Holstein calves into the feedlot beef market is one thing dairy producers who want to enter the beef market should not do.
“We need to complement the Holstein cow. We need animals that will pack on muscle in the feedlot,” Baker said. “If we can’t produce these crossbreds that are feed-efficient, then we cannot convince these feedlots to buy them other than at a discount.”
Feed efficiency is the name of the calf-fed beef game. Even a half-pound difference in gain per day significantly reduces feed efficiency, so getting the most gain is a priority. Using bulls to address the growth issues demanded by the beef cattle market will play an important role in establishing crossbred dairy beef as viable.
Baker encouraged dairy producers to work with a company specifically developing suitable genetics for crossbred beef, with the right mix of traits to partner with the Holstein cow. Using calving ease bulls will achieve better results than focusing on lighter calf weights, he said. The goal for producing beef calves which are successful is to have good growth and good yearling weight.
The Western regions of the U.S. already have the beef market cornered. However, the potential for the Northeast to develop the crossbred Holstein/beef calf market is already emerging. There is enough dairy cattle inventory – 675,000 dairy cows in the state of New York, with 100,000 feeder calves produced each year – that the potential exists to breed 30,000 dairy cows to the same bull. This consistency of breed quality would go a long way to legitimizing the crossbred beef market.
The crossbred calf presents real opportunities for dairy producers seeking to diversify and to capture value from an emerging market. The beef market offers several models – cow-calf, backgrounding and finishing – where calves can be sold at a variety of weights into various market streams.
Work out of Penn State on calf-fed dairy beef, where dairy calves are fed grain from day 1 to perform in the feedlot environment, translates readily to crossbred calves. In the feedlot, performance is everything, and adapting the rumen to a total grain diet, with minimal or no forages from day 1, helps to increase feed efficiency, the key trait in profitably raising beef.
However, not all crossbred calves will need to go directly into a feedlot. It is likely some will find themselves being sold into stocker operations and raised on grass. While a straight Holstein dairy calf wouldn’t work well in this environment, “this crossbred animal, using the right kind of beef bull ... so that it’s not a black Holstein ... could probably go into a stocker operation” successfully, Baker said. Although they’d be less likely to finish on grass, they’d be suited to a grass-fed operation until a year old.
A few larger dairies in New York have recently brought their first several dozen crossbred calves to market. Some early adaptors don’t have growers lined up and are selling at auction. Others are opting to put that piece of the puzzle in place before embarking on this new enterprise.
Although the market is in its infancy, the potential for dairy farmers to develop a crossbred Holstein beef calf that meets all the requirements for high-quality beef is a promising one.
The real key to success in crossbred dairy beef, according to Baker: “Use the right genetics.”
Tamara Scully, a freelance writer based in northwestern New Jersey, specializes in agricultural and food system topics.