The dairy industry is evolving, and producers are finding new ways to diversify their operations. For Ken McCarty of McCarty Family Dairy in Kansas, one big innovation has come through the rapid rise of beef-on-dairy practices — transforming what was once considered low-value into a substantial source of income.
“We remember the days when we were trying to sell Holstein bull calves, two for $5, and you couldn’t get rid of them,” McCarty recalled on the U.S. Farm Report live taping at World Dairy Expo. “And, bull calf sales went from something that you basically ignored in your budget to something that really today accounts for, depending on the month in the market, somewhere around 50% of our overall revenue.”
A Sustainable Practice
According to Dan Basse, president of AgResource Company, beef-on-dairy is not a fleeting trend but a long-term solution in an industry seeking stability.
“I don’t think we can get enough mama beef cows to come forward,” Basse says.
He anticipates robust prices in the future, although not consistently at peak levels, still valuable for dairy operations.
“I’m not saying they’re going to stay at $1,400, but I do believe there’s somewhere north of $700 to $800, which is still a lot of money for the dairy operation,” he says.
The 2025 Farm Journal State of the Dairy Industry report echoes this view, with three-quarters of operators engaging in beef-on-dairy methods such as breeding and raising. There’s evidence in semen sales too, with figures showing a 317,000-unit increase in the U.S. by 2024, as reported by the National Association of Animal Breeders (NAAB).
Added Value
At the 2024 Milk Business Conference, Dale Woerner from Texas Tech highlighted the added value that beef-on-dairy crossbreds bring to the beef supply chain.
“Beef-on-dairy crossbreds have added enough value to the beef supply chain that we should never change what we’re doing,” he asserts, advocating for the continuation of creating crossbred cattle.
Challenges and Concerns
Despite the positive strides in diversification and value addition, the dairy industry faces significant hurdles. Labor remains a critical issue, with a consistent demand for quality and quantity — a luxury dairies can’t afford to ignore given their year-round operations. In fact, immigrant labor contributes to 79% of the U.S. milk supply, underscoring the importance of these workers in sustaining the industry.
“Labor is an ever-present issue within the dairy industry. We’re not afforded the luxury of taking Christmas day off. So, accessing the quantity and quality of labor that we need is a huge concern,” McCarty says.
Market volatility also poses a challenge. McCarty notes the worrying impact of market downturns on rural communities, which are integral to sourcing feed and maintaining vibrant local economies. There’s a growing concern about the long-term effects on communities and the dairy industry’s future prosperity in these uncertain times.
“We’re heavily dependent upon the neighbor next door to source feed from, to keep our communities vibrant,” he says. “When we’re in market downturns like this, we grow very concerned about the long-term impacts that’s going to have on our communities and our ability to have our business prosper in the future.”
The rise of beef-on-dairy practices demonstrates the dairy industry’s adaptability and resilience in the face of challenges. While the path ahead includes obstacles like labor issues and market volatility, innovation in practices such as beef-on-dairy provides a beacon of hope and stability for producers like McCarty, the 2025 Milk Business Leader in Technology winner. Embracing these changes could ensure the vitality of the dairy industry for years to come.
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