Beef supplies are tight and will remain so, but does that mean you should finish out your own steers on your dairy operation?

Iowa State University Extension Beef Specialist Denise Schwab says there are many things to take into consideration before making that decision. “It can be profitable,” she says, “but it needs to be an individual farm decision.”

“Retaining ownership and finishing out dairy steers can be a profitable enterprise to add to an existing dairy operation, but serious thought and budgeting is needed before making that decision,” she says. In addition to crunching the numbers, producers need to determine if they have the feed, labor, facilities and market opportunities needed to raise dairy steers.

Schwab says retaining dairy steers will impact both short- and long-term cash flow on your operation. The income from the sale of bull calves will be delayed 14 to 18 months, and there will be an immediate impact on the feed needs of the operation.

“If you have adequate feed and labor to finish the steer calves, then adding that enterprise is a good way to add extra value to your operation by selling the fed steer instead of the baby calf,” Schwab says.

“However, if you need to purchase feed, you need to make the effort to find cheap feed to meet the finishing animal’s needs. When purchased feeds are cheap, finishing the steers will probably be profitable, but when feed prices are high, you might be better off to just sell the calves instead since it is less risky. It is all a matter of risk management.”

Holsteins have not been bred for fast weight gain. They will consume 8 to 15 percent more feed and need 8 to 12 percent more energy for maintenance than beef breeds. They also consume more water compared to beef breeds and therefore require more bedding.

The different types of feeding systems commonly used for dairy beef will have an effect on the amount of feed needed.

With the High Plains system, light-weight calves are fed a single high-concentrate diet until harvest (85 to 92 percent concentrate). They are marketed at 1,300 to 1,500 pounds. This system is the most predictable, and the low levels of roughage reduce the amount of rumen problems.

The two-phase feeding system feeds high roughage diets followed by a 70 to 90 percent concentrate diet. The roughage phase can utilize pasture, 40 to 60 percent corn silage or a 30 to 50 percent hay or haylage diet. This system has heavier finished weights, which delays income during startup, but tends to be more profitable when grain prices are high.

Both of these systems utilize roughage, which aides in rumen pH and health.

The third system utilizes steer stuffers or self-feeders. Cattle are usually grown on a high roughage system and then put on a self-feeder for finishing. This system does save feeding time, Schwab notes, but it also requires good stockmanship and diligent health checks. She recommends using it for shorter time periods and marketing cattle at lighter weights to reduce the time it is used. Many cattle on this system experience stall outs for weight gain, but there is general good feed conversion.

There are only a few packers who regularly accept dairy beef, so be sure to check market opportunities in your area.

When calculating cash flow of raising dairy beef, Schwab says to look at the current and futures beef markets and use about a $10 per hundredweight discount to the beef prices.

There are several biological reasons why dairy breeds are less desirable. When compared with beef breeds, they tend to have lighter muscle, smaller ribeyes, lower dressing percentage, lower muscle-to-bone ratio, more internal and seam fat, and less external fat. All of that aside, Schwab notes dairy steers usually have excellent quality grades.

Schwab recommends using the budget worksheet available on the University of Wisconsin Extension website to calculate the possible profits and costs associated with dairy beef finishing systems.

She says dairy beef tend to have a higher incidence of bullers, bloat, feet and leg problems, and death loss than beef cattle. “All of this needs to be accounted for in the budgeting process,” she says.

Using sexed semen can provide opportunities for farms finishing their steer calves. Breeding the top producing cows with heifer-sexed dairy semen and the lower half of the herd with bull-sexed beef semen could help genetically make up for the less desirable traits Holsteins and other dairy breeds have when raised for beef.

Labor can also be an issue. In addition to the time for daily feeding, bedding and cleaning, remember that there are usually increased health issues and more time and labor is needed for moving and handling.

When considering your facilities, Schwab says to look at more than just the available space. Dairy beef breeds are less cold tolerant than beef breeds, and some protection from winter cold and wind is a must.

Beef cow numbers nationwide are at a 70-year low. Schwab and others predict a slow turnaround. “2015 looks good; 2016 looks pretty good; and 2017 I’m not willing to predict at this point,” she says. PD

Kelli Boylen is a freelance writer in Waterville, Iowa.