Dairy-beef crossbreeds could help tap higher value meat market

SAN ANTONIO, Texas — There is a growing trend to cross dairy cows with beef bulls to add value to calves that might otherwise be considered a liability.

A new study from Rabobank shows these calves will not add to an already large beef supply but will shift the crossbreds to a higher value market.

“It is amazing how much they are changing that animal with crossbreeding,” said Rabobank protein analyst Don Close.

Both the dairy and beef sectors have something to offer.

The dairy industry has pursued the technologies of genomic testing and sexed semen to select the top-end replacement cattle, while the beef side can offer high grading carcasses that fit in well with domestic and export programs, he said at the National Cattlemen’s Beef Association convention held in San Antonio, Texas Feb. 4-7.

From 2012-16, tight cattle supplies in the United States encouraged feedlots to feed more Holstein calves. At the same time, low milk prices spurred dairy producers to find ways to add value to calves by breeding as much as 70 percent of a herd to beef bulls.

Additionally, by 2017 packers announced they would discontinue processing them for logistical reasons. The cattle were on feed for nearly a year and grew too large to be handled safely on the rails. Liver abscesses were too common, resulting in condemnations.

“One plant in particular that was killing Holsteins, about every fourth carcass, they were having to stop the chain and clean up a liver abscess or rail out a carcass,” he said.

On the dairy side, the 9.5 million cows continued to have calves and there was no demand for males.

Close said only about 30 percent of calves born on a dairy were potential replacements.

When various factors were calculated, including calf death loss, the result was about 3.46 million calves were available for the beef market, or about 13 percent of the American feeder calf supply.

About 82 percent of cattle fed in the U.S are home grown. About 4.3 percent come from Mexico and less than one percent arrive from Canada. The remainder are dairy based with the majority being Holstein.

Producers have experimented with the best cross. In the early days various breeds were used with inconsistent results. Continental breeds provide muscling and a smaller percentage of British cattle like Angus can be added to help them grade well.

Some Jersey producers used Limousin to add muscling but more seem to have selected a LimFlex bull, which includes 25 percent Angus breeding.

On the Holstein side, the most success was found with Simmental-Angus cross bulls, said Close.

Grading results show these crossbreds nearly always grade USDA Choice or Prime and if they have a black hide, they may qualify as Certified Angus Beef. The Holstein crosses have a red meat yield from 62.3 to 63.5 percent while a purebred is 59 to 61 percent.

The crossbreds also reach market weight sooner than straight-bred dairy calves.

Adding these calves to the mix could lead to new business models where they are raised on special sites after they leave the dairy. It is important to ensure they receive adequate colostrum at birth so they stay healthy. They need a milk-based diet and then should be slowly eased into a roughage-based diet before going on a feedlot ration.

Feeders experienced with these cattle told Rabobank the treatment of these calves in the first three months of life is critical to their survival and later carcass quality.

Pricing remains an issue.

The beef-dairy crosses bring a premium over straight-bred Holstein calves but setting prices is still being worked out, particularly when establishing prices for heifers, said Close.

Some dairies have offered to sell them all at a flat price per head.

“Typically, these calves will provide that dairy with a $100 to $150 premium compared to what a straight dairy calf would bring,” he said.

He sees growth for this sector.

“Through my years in business we have struggled with what to do with the dairy calf. We had a window of time between 2012 and 2016 when we thought we had the answer but with the time on feed, there were inherent problems,” he said.

“I think we have finally found a way to break down barriers between dairy production and fed beef production that is mutually beneficial.”

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