America’s cow herd has shrunk to levels not seen in 75 years, falling to 86.2 million head. Weather challenges, high input costs and record cattle prices have made heifer retention a difficult decision for many beef producers, keeping numbers tight. In response, more feedlots have turned their attention toward the dairy sector, where beef-on-dairy calves are helping to fill the gap.
Can Beef-on-Dairy Help Fill Feedlot Pens?
As beef cow numbers continue to slide, beef‑on‑dairy calves have stepped up, offering feedlots a steady source of quality cattle. That growing demand is giving dairy farmers a chance to cash in on a market with lucrative returns.
A 2024 industry survey found about 72% of dairy producers are actively using beef-on-dairy breeding programs, and production numbers mirror this trend. CattleFax estimates beef-on-dairy calf production jumped from just 50,000 head in 2014 to 3.22 million in 2024, with projections likely to reach 5 to 6 million head by 2026.
These trends are reflected in the latest USDA numbers, which show just how tight beef supplies are and how the dairy herd is playing a growing role in meeting demand:
- The number of milk cows in the U.S. increased 2% to 9.57 million.
- Total Cattle and Calves Inventory: 86.2 million head (down 0.35%)
- Beef Cow Herd: 27.6 million head (down 1%)
- 2025 Calf Crop: 32.9 million head (smallest since 1941)
- Beef Replacement Heifers: 4.71 million head (up 1%)
Brad Kooima of Kooima Kooima Varilek believes the tightest supply of this entire cattle cycle could occur in the next 60 to 90 days. During a recent episode of “AgriTalk”, Kooima highlighted how beef-on-dairy has become a major component helping to keep the beef supply chain strong.
“The gorilla in the room, to me, is beef-on-dairy,” he says. “From a couple of standpoints, the dairy cow herd’s the biggest since 1993. It’s grown and grown, and why wouldn’t you if you can get $1,200 to $1,500 for a day-old calf?”
What used to be a steady stream of native beef calves is now increasingly made up of dairy-beef crosses. Feedlot managers say these cattle have helped provide something the beef industry has long struggled with — a reliable, steady supply.
Dr. Eric Belke, veterinarian and feedlot partner at Blackshirt Feeders in Nebraska, says that need for consistency is exactly why Blackshirt Feeders was designed around beef-on-dairy cattle.
“Historically, in the feedlot world, there has been a lot of seasonality. With the beef-on-dairy population, we have a very consistent flow of cattle throughout the year,” he explained during the 2025 MILK Business Conference. “We needed a very large and consistent supply chain.”
Belke’s experience highlights how some feedlots are restructuring their operations to lean heavily on beef-on-dairy cattle, designing facilities and supply chains around the predictability these animals provide.
“Our feedlot was really built for feeding beef-on-dairy animals,” Belke says. “Right now, we’re at a capacity of 100,000 head, and we’re under construction. Next year, we’ll be at 150,000 head. By the end of 2027, we’ll be at 200,000 head. Currently, we have about 87,000 head on feed, and over 90% of those are beef-on-dairy animals.”
What Impact is it Having on Packers?
That predictable pipeline isn’t just benefiting feedlots. Packers are seeing the results, too.
Each year, several hundred thousand beef-on-dairy animals are processed alongside native beef cattle. And the quality within these animals is strong, with many grading very high Choice and even Prime. That quality has helped secure their place in the market.
Nick Hardcastle, Cargill senior director of meat grading and technical specialist, explains beef-on-dairy calves are an upgrade to the traditional Holstein steer.
“Beef-on-dairy is more desirable because it helped overcome several Holstein difficulties,” he says. “Improvements include red meat yield — more meat to a consumer — as well as improved acceptance in branded programs.”
That progress comes from being more intentional with breeding and management. Since replacement females aren’t the goal for the dairy farmers producing these calves, they and their genetic partners can focus on the traits that matter most to the beef supply chain, like calving ease, feed efficiency, days to finish, carcass weight, marbling and overall yield.
Data is what makes that possible. By linking individual AI sires to feedyard performance and carcass outcomes through electronic identification and data sharing, some supply chains are reviewing sire performance every six months and making rapid adjustments. The result has been a measurable improvement in grade, efficiency and days to finish — driven by genetics and management working together.
The Other Side of a Hot Market
While the beef-on-dairy boom has been a big win for dairy farmers, not everyone is celebrating its rise in popularity. Kooima worries about the long-term effects of vertical integration and the growing control some companies now have over the supply chain.
“For the first time, you’ve got an integrator that can control an animal from its birthday and schedule it out 341 days later to slaughter,” he explains. “It’s a dream the packers chase. I watched what happened in hogs and poultry. This scares me to death. The combination of all of that is we’re losing price discovery. They’re going to try to slow it down as much as they can until they control the supply.”
That tension, between a system solving today’s supply problem and one that could reshape how cattle are marketed, is shaping much of the beef‑on‑dairy conversation.
With the U.S. native beef herd unlikely to rebound soon, beef-on-dairy is becoming an important part of keeping the supply chain steady. While the long-term market effects are still unfolding, the trend highlights how the dairy sector is helping meet the country’s ongoing demand for beef.
