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America's Heifer Shortage is Preventing Expansion. Is the Big Money for Beef-on-Dairy a Factor?

Dairy herd expansion is unlikely to occur quickly as the beef industry continues to bid up for young stock and dairy heifers remain in short supply. Dairy producers can make more money breeding for beef operations than they can producing heifers for their own farms or their neighbor’s operation, according to Sarina Sharp, analyst with the Daily Dairy Report.

At a late-January livestock auction in New Holland, Pennsylvania, cattle feeders paid an average of just over $414 for newborn Holstein bull calves, the highest price in eight years. But dairy-beef crossbred calves brought a whopping $675/head at the same auction and crossbred heifer calves commanded a similar price.

“The beef industry is short of young stock, and it will remain so for at least another 18 months. If this margin holds, a 1,000-cow dairy that produces crossbred bull calves can expect to earn about $100,000 more in 2024 than it would selling Holstein bull calves. High beef calf prices are sending a clear signal to the dairy industry to make more beef calves and fewer dairy heifers,” Sharp said. “And the industry is listening.”

February 16, 2024


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