Dairy Herds Expected to Have Decreasing Effect on U.S Beef Production

03:27PM Jul 07, 2016
( Wyatt Bechtel )

By: Donald Stotts, Oklahoma State University

Although beef, as a by-product of the dairy industry, rarely exhibits a major influence on dairy industry production decisions, it is important to note that dairy animals contribute a significant portion of total animal slaughter and beef supply.

“The impact of dairy on beef markets varies over time depending on long-term trends and short-term market conditions in both beef and dairy markets,” said Derrell Peel, Oklahoma State University Cooperative Extension livestock marketing specialist.

Peel expects increased beef cattle inventories as the U.S. beef herd rebuilds to reduce the impact of the dairy industry on beef production to more historically typical levels in the coming years.

America’s dairy cow herd has been relatively stable over the last 20 years, varying less than 4 percent from 9 million to 9.3 million head. By contrast, the U.S. beef cow herd has varied by more than 18 percent, 29.0 to 34.5 million head over the same period.

“Dairy cows as a percent of all cows have averaged 22.3 percent but have been at a record high of 24 percent in 2014 and 2015 as a result of low beef cow inventories,” Peel said.

The nature of dairy production means that basic herd dynamics are very different for dairy compared to beef. Dairy cows are culled more quickly so dairy herd turnover happens much faster.

“Dairy cow slaughter averages 30 percent of the January 1 inventory of dairy cows each year compared to less than 10 percent for beef cows,” Peel said. “On average, the number of dairy replacements held each year is about 47 percent of the cow inventory. This represents about 48 percent of the estimated dairy calf crop and is nearly all the heifers born to dairy cows.”

This compares to beef herds where replacement heifers are approximately 18 percent of the cow inventory. About 64 percent of replacement dairy heifers enter the herd, which implies that overall about 30 percent of the estimated dairy calf crop is used for breeding. For beef herds, an average of 10 percent of the estimated beef calf crop is used for breeding females. 

Peel said the primary contributions of the dairy industry to beef production are male calves and cull cows, along with some cull heifers.

Also, most veal slaughter is from dairy calves. Adjusting for veal slaughter, male dairy calves average about 10 percent of the total beef-plus-dairy calf crop. In 2015, the percentage was a record large 12.1 percent. Peel said the cause was a low beef calf crop compared to a stable dairy calf crop and low veal slaughter.

“Veal slaughter has trended down for many years but reached record low levels in recent years thanks to the high value of feeder cattle,” he said.

In addition, new technology provides the dairy industry other ways to adjust relative to beef markets.

“Sexed semen and genomic testing are being used to target some dairy cows for production of replacement heifers,” Peel said. “Conversely, cows not used to produce replacements are, in some cases, being crossbred to beef breeds to produce a better feeder animal.”

Typically, dairy feeder cattle are discounted compared to beef breeds because of differences in productivity, efficiency and yield. However, dairy animals exhibit some advantages in feedlot situations.

“These animals are very predictable in finishing because of the uniformity of dairy genetics, though dairy calves are often placed on feed at very light weights and may take a year to finish,” Peel said. “Dairy cattle also tend to produce carcasses of consistent quality.”

For example, dairy cattle typically produce Prime carcasses at two to three times the rate for beef breeds.

Although dairy cows only represent about 22 percent of all cows, they represent an average of 47 percent of total cow slaughter. In 2015, dairy cow slaughter represented a record level of 57 percent of total cow slaughter.

“Dairy cows typically have heavier carcass weights, though increased beef cow weights over time has closed the gap somewhat,” Peel said. “Reported cow carcass weights are an average across both beef and dairy cow slaughter and changes in cow carcass weights are sometimes more of a reflection of changing proportions of dairy and beef cows being slaughtered than actual changes in animal weights.”

Oklahoma is the nation’s fifth-leading producer of total cattle and calves, fourth-leading producer of cows and third-leading producer of beef cows, according to data from the USDA National Agricultural Statistics Service.