Dairy producers have been utilizing beef sires to take advantage of strong markets throughout the past decade. This breeding strategy increases a dairy’s value of bull calves and non-replacement heifers.
Ted McCollum, a Texas A&M AgriLife Extension agent, argues, “The strategy adds value back to the dairy with improved growth rates and increased carcass value.” It also takes advantage of the fact dairymen breed and deliver calves well.
Today, the beef industry needs animals produced on dairies to help maintain the supply stream due to high demand both domestically and internationally. Currently, about 20 percent of the beef market is filled by animals with dairy genetics.
Once the number of replacement heifers is determined, producers can focus on maximizing the value of each calf born on the dairy. Both crossbred steers and heifers have larger potential value on the beef market than straight dairy calves, but it requires strategic management including sire selection, calf care and target marketing to capitalize on the opportunity.
How to pick the right genetics
Beef semen can be used on both Holstein and Jersey animals. Typically, less-valued cows and heifers are bred to beef sires. Many dairymen select cows right above their culling criteria to serve as dams, using genomic numbers to evaluate cow and heifer quality.
Higher-quality animals will be bred to Holstein sires for replacement animals. Lower-quality animals will be ideal targets for breeding to beef bulls. First-calf heifers may be bred to beef sires for calving ease, and animals requiring multiple breedings may also be good candidates for producing crossbred calves.
“But you’re not going to find a bull at the sale barn” to accomplish the crossbreeding goals for your operation, stresses McCollum. “It takes a little bit of shopping.”
“If dairymen just buy a black bull for their dairy animals, the resulting crossbreds will eventually be hatchet-butted with no muscle in their rear end,” he describes. “They will still show the dairy head and usually be a brown color.” All those characteristics result in the dairy confirmation discount.
A terminal beef-on-dairy cross often utilizes genetics from Angus, Limousin, LimFlex, Simangus and Wagyu beef lines. These beef breeds provide the additional advantage of greater calving ease for dairy heifers and fewer stillbirths.
However, a Holstein-Angus cross, for example, often develops more dairy characteristics as they age. Those traits result in significant discounts at the feedyards. “Animals with obvious dairy genetics may be docked 13 to 16 dollars per hundredweight, resulting in a loss of 165 dollars or more per animal,” McCollum explains.
Feeders discount dairy animals because of their lower feed efficiency, lighter muscling and lower carcass merit. “You would need to pay us to come take a Jersey calf off your farm today,” he says. Holstein carcasses may also weigh out too large for packers, which is another reason for price discounts.
The goal for dairymen is to make a dairy calf look like a beef calf, and the easiest way to do that is through sire selection.
Look for a beef cross that provides a faster growth rate, good muscling and increased ribeye area on the carcass, McCollum advises. The ideal hybrid vigor essentially turns a dairy carcass with discounts into a beef carcass with better financial returns.
McCollum advises dairymen to select bulls that specifically breed out the dairy characteristics. “Average daily gain for dairy animals in the feedyard is under 2 pounds per day,” he explains. “Beef cattle average 2.8 to 3.2 pounds per day in comparison.”
The lower feeding performance affects final weight and carcass weight. “We need growth, muscling and carcass weight on dairy animals,” he concludes. Different beef sires work differently for Holsteins and Jerseys, so work with your semen company to identify the ideal genetics for your herd.
“With the right bull and the right breeding system, buyers can’t discern crossbreds out of a group,” McCollum says. That means the animals aren’t hit with a discount.
Dairymen also question whether sexed semen should be used to produce bulls rather than heifers. Does the price differential justify sexed semen? “Male calves will always trade for more than females on the light calf market of 400 to 500 pounds,” McCollum answers. “That translates into a 40- to 100-dollar-per-head drop.” Measure that lost revenue against the cost of sexed semen when making your decision.
How to manage dairy-beef-cross calves
Due to the historically low value of dairy bull calves, producers have often devoted less management effort and investment into these animals. If that approach translates into how dairymen care for crossbred feeder calves, profit will eventually take a hit.
Management of crossbred feeder calves has both similarities and key differences compared to raising replacement dairy heifers. For example, colostrum is important to both sets of animals.
But crossbred calves should be fed grain earlier, while the amount of milk replacer in their diets should be decreased sooner in order to develop their rumen quicker. They also should be fed lower amounts of forages than replacement heifer calves. This strategy is important preparation for the high-energy feedlot diet to come.
A vaccination program is also important for crossbred calves. “Respiratory viruses and the bacterial pathogens like clostridials, mannheimia and pasteurella are specifically important,” McCollum explains. Optimizing health is key to achieving good average daily gains.
“Cutting corners on calf management will ruin your reputation,” says McCollum.
How to market crossbreds
Dairy producers implementing a beef-on-dairy option should also develop a specific marketing plan for the crossbred calves.
Crossbred calves born on the dairy can either be sold immediately or grown to a specific market level such as feeder calf or full market weight. Day-old beef-cross calves can command a $75 to $100 bonus over purebred dairy animals.
Feeder calves typically go to the feedlot between 16 and 20 weeks old weighing 300 to 400 pounds. Either option can generate additional revenue for a dairy operation. Both risk, and the potential for return, increase the longer they remain in your care.
Dairy producers should consider developing a relationship with specific calf ranches, beef growers, finishers or feedyards in their area. In return for securing a premium for crossbred animals, consider offering buyers consultation on beef sire selection.
Be prepared to describe detailed management practices on the crossbreds, such as feeding colostrum, vaccination protocols and introduction to grain-based diets, to make your case for an above-market sales price.
Certain geographic areas of the U.S. have stronger demand for crossbred heifers. Consider the potential for marketing these heifers as commercial beef cows in a cow-calf operation rather than feeders. “The beef-on-dairy cross can be good ‘beef’ cows and raise good calves,” McCollum states. Implementing that strategy would help overcome the need for sexed semen.
Because Holsteins have high milk genetics, their beef-on-dairy cross will result in great carcass marbling, an important factor for the grading system and associated premiums. Packers also appreciate the lower trim required on a Holstein-cross carcass due to lower amounts of backfat.
This translates into labor savings for the packer. Dairymen who can successfully capitalize on these beneficial characteristics will receive a better return on their crossbreeding efforts.
Conclusion
Do you view beef as a byproduct of your operation or as an asset that can be strategically maximized? Does your projected calf inventory exceed your need for replacement heifers?
If market diversification is your goal, consider the revenue from beef crosses in your financial plans. Taking advantage of higher beef prices and developing an income stream not tied to the dairy markets can be a win-win strategy for both dairy producers and their cattlemen neighbors.
Beef producers buying crossbreds for the feedyards are attracted to not having the maintenance expense of a dam, while dairymen can harvest milk income from their Holstein or Jersey cow and sell black calves near beef prices. 
PHOTO: A strategic Limousin x Jersey cross can result in feeder calves without dairy discounts. Photo courtesy of Select Sires.
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Karena Elliott
- International Freelance Writer
- Amarillo, Texas
