America’s Dairy Cattle Supply Continues To Slide To Two-Decade Low, As Farmers Breed Hybrids To Make Beefier Cows

Earlier this year, the United States Department of Agriculture (USDA) revealed that U.S. beef cattle supplies are at their lowest since 1961. Now Bloomberg is reporting that ranchers are shifting their breeding habits to hybridize their dairy cows to be beefier and heftier, capitalizing on the beef lulls and 2023’s debilitating milk glut.

Bloomberg noted: ‘Those hybrid calves — created by artificially inseminating a dairy cow with semen from a beef bull — are beefier than a pure dairy animal and can fetch the seller hundreds or even thousands of dollars apiece. That’s a big payday in an industry that last summer faced such a pronounced milk glut that farmers were forced to dump it down the drain.’

Milk prices are up and down and so farmers are always looking for a way to offset costs to be as efficient as possible.

said Amy Penterman, the owner of Dutch Dairy, which breeds approximately 70% of its 900-cow milking herd for beef.

Penterman added that the new revenue stream is “rewarding because the beef supply has diminished over the last few years. We’re able to add that extra supply into the market to keep the cost down for our consumers.”

Bloomberg went on to note:

Given the depleted beef supply, a week-old hybrid calf can now fetch between $400 to $800, up from $200 a few years ago, Penterman said. Farmers who raise the calves to adulthood can charge even more. Krent Frauhiger, a dairy manager in Indiana, rears the so-called “beef-on-dairy calves” for around 16 months until they are about 1,400 pounds. Those livestock can fetch about $2,500 each, nearing what farmers receive for an actual beef animal, he said. That’s far more profitable than raising replacement milking cows, which CoBank estimates in recent years actually lost farmers as much as $900 a heifer.

The diversified income stream is a welcome addition for America’s dairy producers, who struggled when demand — and in turn, prices — fell at the start of the pandemic. Although anxious shoppers were clearing out the milk aisle at grocery stores, that didn’t offset the drop in demand from closed restaurants and schools. Farmers had so much excess that they poured milk down the drain, a supply-management tool they’ve had to use again more recently.

The breakdown in the supply chain only added to the woes of the US dairy sector, which even before Covid-19 suffered a wave of closures and consolidations following years of low milk prices. The number of dairy farms in the US plummeted about 39% from 2017 to 2022, according to the government’s most recent agricultural census.

As the dairy industry teeters, demand for red meat remains strong. US consumers eat close to 60 pounds of beef a year. Milk and cheese prices are virtually unchanged from a decade ago, US Department of Agriculture data show, while ground beef prices have climbed more than 35%, touching a record high in November…