The beef-on-dairy sector is booming – and it doesn’t show any signs of slowing down. What started as a trend more than a decade ago has quickly grown into a steady and reliable profit stream for dairy farmers across the country. Just ask Ted and Megan McAllister, part owners of McAllister Family Dairy, LLC., in New Vienna, Iowa.
Roughly six years ago, Ted and his brother, Rob, who co-owns the operation, decided to make a strategic investment in their herd’s reproductive program. Before this shift, the operation still relied heavily on herd bulls. Today, the farm utilizes 100% artificial insemination and has implemented genomic testing and Allflex activity monitors onto their 280-head herd of Holsteins and Jerseys. This significant shift in their breeding approach not only elevated their herd’s genetic potential, but also opened the door to using beef semen on some of their lower-performing cows
Betting on Beef-on-Dairy
With dairy bull calves fetching too little money to justify raising them, the McAllister’s saw using beef semen as a logical step to improve their operation’s profitability. By incorporating beef genetics, they could enhance the value of their bull calves, tapping into a more profitable beef market.
“But what really drove our decision to start incorporating beef semen into our breeding program was genomic testing,” Megan says. “We wanted to fully take advantage of that technology and create the best replacements possible. That meant managing our heifer inventory and not raising anything extra.”
With guidance from Dave Erf, a reproductive consultant from Zoetis, a genomic based breeding plan was put in place and today the McAllister’s use beef semen on 60% of their lactating animals and 25-30% of their heifers. This shift in their breeding strategy has made up the foundation of the farm’s current reproductive program.
Knowing Their Numbers
When the McAllister’s went all-in on beef-on-dairy, they recognized the importance of precisely managing their herd numbers. This required them to pinpoint exactly how many replacement calves were needed, determining how many first-calf heifers should join the milking herd, and calculating the ideal monthly cull rate.
“We ship our milk to Prairie Farms and operate within their base system,” Ted notes. “So, we are kind of capped on the amount of milk we can produce. That means we only need to create a few replacements each month for the herd to remain at its current size.”
Knowing they were limited on the amount of milk they could produce, the McAllister’s worked alongside Dave to create a yearly genetic audit to help give them a better snapshot of their genetic progress. Through this audit, they set targets to produce about 12 heifer calves monthly while maintaining a 30% cull rate and keeping 30% of the herd as first-calf heifers.
“We really look forward to that audit each year because it allows us to see if we are hitting our benchmarks,” Megan says. “It’s fascinating seeing those numbers and it allows us to be really picky with which animals we are choosing to make replacements from.”
In addition to tracking genetic progress, the audit and genomic results enable the team to make more precise breeding decisions. Using these insights, the McAllister’s select replacements who are expected to be the most profitable in the lactating herd. This strategy allows them to prioritize cows with strong longevity and productivity, while reserving beef semen for animals less likely to stay in the herd long-term.
“When we know an animal is going to get bred to beef, we try to pick angus beef sires that have higher fertility and better calving ease traits,” Ted adds. “We have a steady flow of elite replacements being born each month, and the beef-on-dairy calves make up the rest.”
Megan notes that no matter if the calf is a crossbred or a future replacement, every calf gets treated the same.
“Everything gets two feedings of colostrum before being switched to milk replacer,” she says. “We raise these calves for about 1-2 weeks then sell them at our local sale barn. We’ve been really happy with how these calves have turned out and what they are selling for.”
Adding Another Profit Line
For the McAllister’s, incorporating beef-on-dairy has been a financial game-changer for their operation. This has especially held true over the past 12-24 months as beef prices have seen a significant increase.
“We wouldn’t be where we are at today without these beef-on-dairy calves,” Megan says. “They’re easily our third largest source of income behind milk and cull cows. From our perspective, we have to breed cows anyway, so you might as well make more profitable calves – and it’s certainly working for us.”
Labor savings has also been a significant benefit. Raising fewer replacement heifers has reduced labor demands in the calf barn and has freed up pen space for older heifers animals.
“We only rely on a few outside people for help,” Ted notes. “Otherwise, it’s just the three of us running the ship. Having fewer calves to take care of and less overcrowded pens to manage has really helped us from a labor standpoint.”
This shift in management has allowed the McAllister’s to concentrate more on raising high-quality replacements for their future milking herd while also saving some time.
“Our time is our most valuable asset,” Megan adds. “Spending less time caring for calves has freed up some hours for other parts of our life – whether it’s focusing on a different area of the farm or having a little extra time for ourselves. That time saved is invaluable.”
A Look at the Market Ahead
From coast-to-coast, dairy producers like the McAllister’s have capitalized on the high prices beef-on-dairy calves have provided. And according to Dr. Woerner, animal and food science professor at Texas Tech University, these prices are likely to remain elevated for the foreseeable future.
“Beef-on-dairy calves have contributed tremendously to the bottom lines of the dairies producing them. And the good news is that the forecast looks really good for that trend to continue,” Woerner explains. “This is primarily because of the shortage in traditional beef cattle numbers. But beyond that, beef-on-dairy cattle have carved out a stable, respected place in the market, proving their value to both buyers and packers.”
With ongoing extreme drought conditions and feed shortages affecting various parts of the country, Woerner notes that the native cattle herd is unlikely to rebound any time soon.
“Most models suggest we’re looking at a minimum of three years before a significant rebuild begins, with some projections extending up to five years,” Woerner adds. “For dairy farmers, this means that every straw of beef semen used on a dairy cow today will likely yield calves that continue to bring premium prices over the next few years.”
Woerner also highlights that the demand for beef-on-dairy calves isn’t solely due to the shortage in traditional beef cattle. Some of their popularity also stems from their carcass quality and sustainability impacts.
“These animals are entering the market steadily and have become highly efficient in the feedlot, with nearly all grading choice or higher,” Woerner says. “Packers are paying attention to that. Additionally, the beef-on-dairy crossbred offers a unique advantage for companies committed to reducing their carbon footprint, as these animals are among the easiest options for carbon accounting and securing carbon credits. This sustainability factor is significant; in fact, it may be the very reason these cattle continue to command high prices, even as the beef cattle supply eventually rebounds.”
While it’s clear that beef-on-dairy crossbreds offer substantial benefits to both packers and dairy producers alike, Woerner points out one notable drawback: a higher incidence of liver abscesses.
“The one major downside to these crossbred cattle is still the liver abscess issue,” Woerner says. “They are a costing packers time and money for them to deal with. But there is so much research being done, so the presence of liver abscesses in these cattle should improve as time goes on. And if we’re able to get the level of liver abscesses down to that of the conventional population, then I truly believe these cattle could be in higher demand than native beef.”
A Lasting Strategy
For the McAllister’s, incorporating a beef-on-dairy into their breeding program has been a transformative aspect to their operation. From increasing profitability to cutting down on labor needs, the benefits of crossbreds have been plentiful. And when asked if they would consider discontinuing it, their answer was a definitive “no.”
“It fits into our plan so perfectly,” Megan says. “I couldn’t imagine dairy farming today without it.”
Woerner believes this sentiment rings true for dairies across the nation, as beef-on-dairy continues to prove its value in both the beef and dairy industries.
“It’s proving to be more than just a trend—it’s becoming an essential part of the model for dairies and a critical piece of the future for both sectors,” Woerner says. “I’m confident that beef-on-dairy is here to stay.”
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Follow the McAllister family’s journey by connecting with Megan on Facebook, Instagram and TikTok at @Megan_DairyGirl
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