Diversifying Your Dairy’s Revenue Stream

Publish date: 2.8.24

In times of low milk prices or volatile marketplaces, progressive producers look to diversify their dairy’s revenue stream. This step can be critical to ensure financial stability and an operation’s ability to weather the cyclical nature of the dairy industry. That is why we have seen a drastic uptick in domestic beef semen sales in the last several years as dairy producers look to diversify their revenue stream by implementing a beef on dairy program.  

No End in Sight for the Increasing Demand for High-Quality Beef 

As we look to the future, there are no signs of a slowdown in the creation of beef cross calves, especially with the native beef cow herd population at an all-time low and not expected to return to its full capacity. Couple low beef cow numbers with an increase in demand for high-quality beef among consumers worldwide, the beef supply chain is constantly searching for healthy, predictable, and performance-oriented cattle to keep up. This shift means dairy producers have a real opportunity to take advantage of an additional revenue stream.  

The registered Holstein cow has provided value to the beef industry for a long time, and she plays an even greater role in today’s growing beef on dairy trends.  

John Meyer, CEO of the Holstein Association USA

Dairymen have been beef producers all along when you consider cull cows and bull calves. However, by utilizing the right beef genetics on dairy cows, dairy producers can create feeder cattle that will achieve upper 2/3s Choice and Prime which can result in significant profit potential. To take it a step further, you could create a new profit center on your dairy by developing and raising the beef cross calves from birth to harvest. You can learn more about this concept from John Meyer, CEO of the Holstein Association USA by watching a recent YouTube video they released.  

The Beef Cross Works Well in the Supply Chain  

It is no secret that producing beef cross calves has grown in popularity over the last few years. Not only does this provide dairy producers with a diversified revenue option, but the beef cross works well in the beef supply chain as both breeds bring something to the table that complements the other.  

More beef cross calves are entering the supply chain every day. This has been beneficial in terms of understanding just how good or bad they are in comparison to their full-blood dairy and beef contemporaries. Data from the chain indicates that beef cross calves from the right beef genetics perform better than their dairy counterparts and similarly to native beef on beef cattle.  

Based on research performed by Dale Woerner, Professor and Cargill Endowed Professor at Texas Tech University, there are eight reasons why beef on dairy makes the perfect cross. They are listed below, but you can read more about them in this blog, originally published by Dairy Herd Management.  

Eight Reasons Why Beef on Dairy Works 

  • Feedlot growth—Average daily gain and feed-to-gain ratios of beef cross calves are significantly better than Holsteins and similar to conventional beef cattle. 
  • Quality Grade—The percentage of beef cross calves that grade Choice or higher is roughly equal to, if not better than, conventional beef animals. 
  • Carcass yield—Beef cross calves have a lower dressing percentage than native beef animals. 
  • Eating quality—While full-blood Holsteins still take first place in terms of tenderness, beef cross calves are second on the list, followed by conventional beef. 
  • Meat color—beef on dairy crossbreeding removes the dark coloring problem that originally appeared in traditional straight-bred dairy animals. 
  • Muscle shape—Beef on dairy animals’ longissimus muscles are larger and rounder than Holsteins which had customarily been a drawback for dairy beef. 
  • Consistency—Dairy animals produce a consistent supply of offspring year-round, which helps improve market stability. 
  • Traceability—Because of meticulous record-keeping and the route in which beef cross calves flow through a dairy and in the beef supply chain, dairy producers have a real advantage in leading the charge for traceability. 

Beef on Dairy Profitability Starts with a Plan and the Right Beef Genetics 

While implementing a beef on dairy program sounds simple in theory, we would be remiss if we did not stress that a strong genetic plan and using the right beef genetics are key to your success. A genetic plan ensures that you are creating the right number of heifer replacements with sexed semen and deploying the right beef genetics on the remaining pregnancies. The beef cross calves created today are drastically better in terms of quality, but that is when precise beef genetics are used to maintain dairy performance and maximize terminal profitability.  

Three trait categories drive genetic improvement and profitability on a dairy: genetics, fertility, and calving. Each of them has a significant impact on milk output and, eventually, your milk check. Knowing a dairy’s primary source of income is milk production, the goal when selecting beef genetics should be to maintain milk production while creating terminally-oriented beef cross calves. 

Succeeding in Beef on Dairy Requires a Winning Game Plan 

The right game plan always wins! That’s why we suggest dairy producers implement the Winning Game Plan to experience unbeatable genetic progress and maximize profitability from all females in the herd. So, what is the Winning Game Plan? It is a genetic plan that combines the industry’s best fertility sexed semen, Sexcel, and beef genetics proven for dairy performance with terminal profitability, Beef InFocus.  

Now that you know the strategy, we have learned over time that using the right beef genetics is critical for the success of a beef on dairy program. That’s why Beef InFocus stands out in the industry because it includes sires bred by design, validated for dairy performance, and intended for beef supply chain marketability. It is the only beef on dairy program that tests and hand-picks bulls based on dairy performance. It is the only program that provides dairies with full supply chain market access, so you can obtain your share of terminal profitability.  

Take advantage of this market opportunity by creating more valuable beef cross calves with Beef InFocus! Contact your ABS Genetic Advisor or complete the form below to learn more.  

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