Key Takeaways
- New USDA and CoBank data reveal that beef-on-dairy cattle are contributing to higher cattle prices for producers and greater value for feedlots and processors.
- Beef-on-dairy animals are selling at higher prices than dairy cattle and slightly higher than beef cattle at slaughter auctions.
- The U.S. beef cow herd is at historically low levels, driving increased demand for crossbred cattle in the beef supply chain.
- Beef quality has improved significantly, with Prime beef production up 140% and Choice beef making up over 75% of the market.
- CoBank’s analysis suggests that beef-on-dairy will remain a growing trend, strengthening efficiencies across the cattle industry.
New USDA Data Sheds Light on Beef-on-Dairy Market Impact
Tracking Beef-on-Dairy Sales for the First Time
New data from the USDA Agricultural Marketing Service provides insights into the impact of beef-on-dairy crossbreeding on the beef supply chain. While still limited in scope, early findings suggest that beef-on-dairy cattle are contributing to stronger cattle prices and improved value for feedlots and processors.
Historically, industry analysts had no clear pricing data for beef-on-dairy animals. That changed in March 2024, when the USDA began tracking beef-on-dairy cattle sold at public auctions.
CoBank Analysis: Key Findings on Beef-on-Dairy Pricing
An analysis from CoBank’s Knowledge Exchange report highlights that:
- Beef-on-dairy cattle sold for higher prices than dairy cattle and slightly higher than beef cattle at slaughter.
- Their weight range falls between traditional beef and dairy cattle.
- They retain a greater proportion of their value from feeder price to slaughter price per hundredweight, making them more profitable for feedlots.
“We’ll have to see if these patterns hold over time as more data becomes available, but preliminarily, it reaffirms the value proposition of beef-on-dairy in the wider beef sector,” said Abbi Prins, livestock analyst with CoBank.
CoBank: Beef-on-Dairy Gains Popularity Amid Tight Cattle Supplies
Drought and Market Conditions Driving Change
The U.S. beef cow herd remains at historically low levels due to prolonged drought and poor grazing conditions. Meanwhile, consumer demand for beef remains strong, leading to record-high cattle prices.
To capitalize on this demand, dairy producers are using beef genetics to produce higher-value calves that can enter the beef market at a premium.
Long-Term Potential for Beef-on-Dairy Crossbreeding
While crossbreeding dairy cows with beef bulls is not a new practice, enhanced tracking and performance data will allow for:
- Greater market transparency for pricing and performance.
- More efficient feedlot management with predictable cattle weights.
- Improved profitability across the supply chain.
“Purebred beef cattle will remain the dominant source of the U.S. beef supply, and that’s not going to change,” said Prins. “But considering the added value crossbred dairy-beef animals bring to market, it is unlikely the trend will slow any time soon.”
CoBank Reports U.S. Beef Quality is Surging
Shift Toward Higher-Quality Beef
The quality of U.S. beef has seen dramatic improvements over the past decade, driven by higher consumer demand for premium cuts.
- Prime beef production has increased 140%, reaching over 2 billion pounds annually.
- Choice grade beef, now making up over 75% of the market, has grown 20%, with 16 billion pounds produced in 2024.
- Select grade beef production has declined 37% since 2014, landing at 3.17 billion pounds in 2024.
The Role of Dairy Genetics in Premium Beef Programs
While it is difficult to track the exact contributions of dairy cattle to beef quality, crossbred dairy-beef animals—especially those bred with Angus or other premium beef genetics—are increasingly qualifying for branded premium beef programs.
This shift is expected to continue as data collection improves, allowing for better analysis of beef-on-dairy cattle performance.
Read the entire report here.
