In recent years, the beef-on-dairy segment has undergone significant changes, illustrating a growing confidence among cattle producers and market stakeholders. Just three years ago, beef-on-dairy calves were sold at steep discounts compared to native beef cattle. However, times have changed and now this pricing gap has narrowed remarkably, indicating a positive shift in market perception and valuation.
The Role of Genetics and Breeding
According to Laurence Williams, dairy-beef cross development lead at Purina, beef-on-dairy calf prices averaged about $650 three years ago compared to today’s average price of $1,400 for day-old, beef-on-dairy calves.
In fact, Patrick Linnel, director of market research for CattleFax, highlights the ongoing transformation in a recent beef-on-dairy report from Purina. The report underscores that these changes are largely thanks to advancements in genetics and smarter breeding decisions.
“Genetic suppliers have zeroed in on beef sires that are well suited for dairy cows,” he says. “And producers are making more targeted selections. The result? Stronger, more consistent cattle in which feedlots and packers are increasingly confident in. While there’s still a small discount compared to native beef cattle in some weight classes, it’s far less dramatic and often offset by the reliability and feedlot performance of these crossbred cattle.”
Strategic Innovation and Market Maturity
As the beef-on-dairy segment continues to mature, Linnel says the next phase for this market will necessitate strategic thinking and adaptability from producers.
“While market growth may be slowing, the focus has shifted from volume to value. The future of this market will be shaped by those who can produce high-quality, efficient animals that align with the evolving needs of packers, feedlots and consumers,” he says.
When asked if beef-on-dairy revenue is going to be available to help producers bottom line for the next one to three years, Phil Plourd, president of Ever.Ag Insights nods his head.
“Yes. It’s certainly possible that beef and cattle prices will retreat at some point over the next couple of years,” he says. “History says that the cattle cycle resets eventually.”
Although, Plourd says prices are so high now that even a major retreat would still leave dairy producers with much more beef income than they enjoyed seven or 10 years ago.
“We think financial incentives will continue to lean toward beef-on-dairy activity, even if it’s not quite as lucrative as today,” he says.
Dan Basse, president of AgResource Company, strikes the importance that beef-on-dairy is not a fad but instead a structural change that was made possible by sexed semen and IVF’s.
“The U.S. and beef industries are intricately intertwined by the need for calves with the U.S. beef cow herd at its lowest level since the 1960’s and the cow/calf operation being difficult to scale,” he says. “The U.S. and world need the reproductive capacity of the U.S. dairy herd to bridge the supply gap in the U.S beef cow herd. It will always be cheaper to produce dairy crosses than feed, breed and winter a beef cow. This does not suggest that non-cross beef animals will end their price premiums, but that dairy beef is a new opportunity for dairymen that no longer need all their replacement animals that are produced due to sexed semen. And the packer has come to better understand dairy beef crosses, the length of the carcasses and the accommodations that are needed at plants. I expect the U.S. dairy beef will be profitable and persist for years to come.”
Premier Kansas Dairy Weighs in
For the past five years, the McCarty Family Farm in Colby, Kan., have participated in beef-on-dairy.
McCarty Farms, who recently were named Farm Journal’s 2025 Milk Business Leader in Technology award winner has tested more than 75,000 females since they began genomic testing in 2018 and continue to submit samples weekly.
“All animals are ranked from a genomic perspective, and the top half of the breeding herd creates the next generation, and the bottom half goes to beef, regardless of age or stage,” says Ken McCarty, one of the owners.
McCarty eagerly anticipates new genomic results each month, which provide valuable perspectives on their progress and future direction.
“The value of genomic testing has evolved over time,” he says. Currently, McCarty markets beef cross calves as day olds. The McCarty’s recognize there might be some additional value in retaining ownership; however, their preference is to take away the burden on their employees.
“When we have an opportunity in front of us, our attitude is, we’re going to take it, and that’s really our approach when it comes to the beef-on-dairy side of things,” McCarty says, noting that the market analysis that they have observed, including beef herd trends, heifer retention rates and rancher and cow-calf operator retirement all lead them to expect these prices to maintain strength through 2026 and into the first half of 2027.
“Of course, there is nothing certain in the ag economy, and black swan events seem to be occurring more often, but we are optimistic that values will remain strong for the foreseeable future,” he says.
McCarty says beef-on-dairy has become a substantial part of their operation’s non-milk income stream.
“This certainly has helped bolster profitability while also enhancing the long-term productivity and profitability of our farms through increased genetic selection intensity,” he says. “We don’t see tremendous downside risk in the beef-on-dairy market anytime soon.”
The beef-on-dairy segment has become a substantial part of non-milk income streams for dairy operations like McCarty Family Farms. By enhancing genetic selection intensity, these strategies bolster profitability while minimizing downside risk. As the market continues to evolve, those who embrace strategic innovation and adaptability will likely reap the benefits over the next few years.
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