The Impact of Beef x Dairy Calves

Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist

 

The most common question I get at market outlook presentations is “What is the market impact of all these beef on dairy calves?”  There seems to be a perception that these calves represent an additional number of cattle beyond the traditionally available cattle inventory data.    

 

Historically the dairy industry bred all cows to dairy genetics, using the 50 percent heifer calf crop to ensure sufficient heifers from which to select the best genetics for the milking herd. The male calves and culled females became part of the beef industry.  The growing production of beef x dairy crossbred calves in recent years is the result of increased commercial feasibility of sexed-semen technology.  With sexed-semen, dairy producers can target the production of dairy replacement heifers in a subset of genetically superior cows.  This frees up the remaining dairy cows to utilize beef genetics and produce crossbred calves.      

 

Straightbred dairy steers and heifers are heavily discounted in beef markets because the light muscled animals produce carcasses with less desirable muscle conformation.  Beef x dairy crossbred calves are significantly more valuable because the resulting carcasses have improved muscling and carcass conformation. Straightbred dairy calves not used for milk replacements previously entered the beef market simply as a residual, with limited or, sometimes no, value in the beef industry.  In contrast, beef x dairy cross calves are a significant source of revenue for dairy producers and are subject to management choices regarding genetics and production.  Numbers are uncertain but a significant percentage of potential non-replacement dairy calf production today are beef x dairy crosses.

 

USDA-NASS estimated the January 1, 2024 inventory of dairy cows at 9.36 million head.  The dairy herd is relatively stable and has only varied by 130 thousand head, or 1.4 percent, from maximum to minimum in the last ten years.  The dairy industry contributes an average of roughly 26 percent of the total U.S. calf crop each year.  The contribution of the dairy industry to beef production does not change significantly year to year although the relative share of dairy in beef production increases slightly when the beef industry declines cyclically.  Growth in production of beef x dairy crossbred calves does not represent any net additional production of cattle but rather a change in the genetic composition of dairy calf production.  

 

Dairy production, including beef x dairy calves, are included in the cattle inventory and production data that are routinely available.  Calf crop, cattle on feed, and slaughter data and other data include beef and dairy sectors and therefore already account for the beef x dairy calves now being produced in the dairy sector.  Beef x dairy calf production is not having much impact on total beef production and market prices beyond what is already considered in market analysis. There are some impacts in specific meat markets because the beef cuts from beef x dairy carcasses may have access to markets previously closed to dairy beef.  Arguably, the biggest impact of beef x dairy production is the blurring of the historical demarcation between beef and dairy sectors in the U.S.

 

  

Positive Impact of Beef Quality Assurance  

Mark Z. Johnson, Oklahoma State University Extension Beef Cattle Breeding Specialist 

 

Consumer market research conducted by the National Cattlemen’s Beef Association reveals great information about the positive impact of Beef Quality Assurance (BQA) certification. Did you know?

 

• 71% of consumers say they consider how the food was raised or grown when making purchasing decisions, however only 26% say they know a lot about how cattle are raised for food. The primary consumer concern is animal welfare.
• Farmers and ranchers are viewed as the most credible sources of information when it comes to US meat production practices with a 62% level of trust expressed by consumers. Veterinarians (60%) and government officials (57%) finished 2nd and 3rd in credibility in the eyes of consumers.
• Fitness professionals and dieticians (41%), conservation groups (39%), animal rights organizations (such as PETA or HSUS) (37%), celebrity chefs (36%), google search (36%), newspapers and magazines (28%), and large media outlets (such as The New York Times or Fox News (26%) ranked below farmers and ranchers in credibility. 
• Learning about BQA made consumers more confident in beef safety and animal welfare. Because BQA is nationwide, consumers understand that it represents the beef they are buying. Positive perceptions among consumers improved by 26 points after exposure to basic BQA information.
• Consumers perception of how cattle are raised for food changed dramatically in response to viewing the Beef. It’s What’s For Dinner video titled “It Takes and Industry.”  31% of consumers had a positive perception before of how cattle are raised for food prior to watching the video, the positive perception jumped to 74% after watching the video.
• “clicks equals transparency” in today’s connected world, so BQA fits well since it can provide more information through additional clicks, all the way through the BQA program website, if consumers are interested.
• Most farmers and ranchers don’t want to do consumer outreach and beef promotion. 
   

Bottomline: GET BQA CERTIFIED AND STAY CERTIFIED – it’s the closest thing you can do as a rancher to standing in a grocery store and saying, “I take pride in how I raise cattle so that you (the consumer) can enjoy a safe and delicious steak tonight.”

 

Reference

Consumer Market Research done by NCBA and funded by the Beef Checkoff

 

 

Fall Finance Chores

Scott Clawson, Oklahoma State University NE Oklahoma Cooperative Extension Agricultural Economics Specialist

 

The scorching sun is setting on August quickly.  As we transition from running hay equipment to preparing for the winter-feeding season it provides a great opportunity to catch our breath and glance at our financial condition.  

 

Why now?

The August to September period is a prime time for a spring calving cow-calf operation to experience a cash flow issue. This can be attributed to a collection of timing and seasonal ranch operations.  The first potential cause is our calving and marketing season.  Most operations are spring calving and then market calves in the fall.  This results in most operations receiving the largest portion of their annual revenue in the fall of the previous year.  We then funded any debt obligations due and purchased supplement for the cowherd last winter. We then moved into hay season.  Capital expenditures along with diesel, fertility, net wrap, repairs and maybe labor are all consuming cash.    

 

What should we do?

The easiest step would be to sit down and estimate ranch expenses from now until we intend to sell calves.  Then take our cash balances, room on our revolving credit line, any anticipated cash inflows and add them together.  Subtract the anticipated expenses from the anticipated inflows.  If positive, our short-term cash position is likely adequate.  If not, we need to consider how to meet that cash need.     

 

Calculating working capital at this point would also be helpful.  Working capital is a liquidity measure and shows us how effectively we will be able to cover our short-term obligations.  This includes any operating costs we have on the horizon and any upcoming debt obligations we need to be ready for.  AGEC-790 Evaluating Financial Performance and Position is a great OSU fact sheet that discusses this in more depth.

 

A strong cash or working capital position allows us to be opportunistic.  We may be able to purchase assets (cattle, equipment, etc.) that are undervalued in the market.  Furthermore, we could make investments that may yield greater profits later.  Items like pasture fertility for stockpiling forage, backgrounding, or retaining ownership on calves could be examples to explore.  For more information on farm business management issues, contact your local OSU Extension Educator. 

 

 

Five-State Beef Conference Dates and Locations Set for 2024 

Paul Beck, State Extension Beef Nutrition Specialist

 

The Beef Extension teams of Oklahoma, Kansas, Colorado, New Mexico, and Texas have announced the dates and locations for the upcoming 5 State Beef Conference. The annual conferences cover topics important to beef cattle producers with locations rotating among the states each year.

 

This year the meeting series will kick off at the Cimarron County Fair Building in Boise City, Oklahoma on Monday September 30. For more information about registering for the Boise City meeting contact Kierra Ortega (Cimarron County Ag Educatory) at 580-544-3399 or Britt Hicks (OSU Panhandle Area Livestock Specialist) at 580-338-7300.

 

The meeting will also be held at the Coldwater Veteran’s Building/City Building (239 East Main) in Coldwater, Kansas on Tuesday October 1. For more information about registering for the Coldwater, Kansas meeting contact Levi Miller (Camanche County Kansas Ag Educator) at 620-582-2411 or Britt Hicks (OSU Panhandle Area Livestock Specialist) at 580-338-7300.

 

Experts from across the region will present on a range of topics with registration starting at 1:30 pm and the program ending at 7 pm with a beef dinner at each location. There will be a registration fee of $20 with a preregistration deadline by September 23.

 

 

5 State Beef Conference

Boise City, OK (Cimarron County Fair Building) 

Monday, September 30, 2024: 2:00 PM - 7:00 PM

 

Coldwater, KS (Coldwater Veteran's/City Building, 239 East Main) 

Tuesday, October 1, 2024: 2:00 PM - 7:00 PM

For both locations registration at 1 :30 PM

 

Program

• Market Update
  Glynn Tensor, Kansas State University
• Dairy x Beef: Understanding Feedlot Performance and Carcass Characteristics
  Casey Maxwell, Cactus Feeders
• Optimizing Forage Efficiency: Enhancing Reproductive Performance & Development in Cattle
  Emma Briggs, Kansas State University
• Building Your Beef Herd: How Trace Minerals can improve profitability
  Ddee Haynes, Technical Sale Representative, Axiota® Animal Health
• Research Updates
  • Justin Waggoner, Kansas State University
  • Paul Beck, Oklahoma State University
  • Glenn Duff, Clayton Livestock Research Center, New Mexico State University (only at Basie City)
  • Corey Moffet, USDA/ARS Southern Plains Range Research Station; Woodward, OK (only at Coldwater)

 

Beef Dinner and Proceedings Will Be Provided

 

Registration fee: $20/individual.

Registration Deadline: Monday, September 23

 

For more information about registration, call Kierra Ortega (Cimarron County OK

AG Educator) at 580-544-3399, Levi Miller (Comanche County, KS) at 620-582-

2411 or Britt Hicks (OSU Area Livestock Specialist) at 580-338-7300.

 

 

2024-2025 OQBN Market Partners & Sale Schedule