We can all agree that the year 2020 has been full of unexpected change in nearly all aspects of our lives. Specifically, in the dairy industry, the word “beef” is being used now more than ever before! The more extensive utilization of sexed semen by the dairy industry and the economic value of a Holstein steer are two of the major factors that led to the supply chain for beef-on-dairy (BxD) calves that we are seeing today.
According to Dr. Larry Corah, Ph.D., supply chain consultant, “As the beef cow herd returned to normal levels, following the drought, packers were able to fill slaughter capacity with fed native cattle which led to three of the four major packers stating they would not slaughter Holstein steers (except in unusual circumstances). Besides the supply of native cattle, other factors included the undesirable carcass length of the Holstein carcasses resulting in plant issues – which coupled with the high level of liver abscesses – resulted in the packers saying ‘no thanks’. Net result is, the market value of the Holstein steers declined.”
“Dairy producers reacted as you would expect,” continued Corah. “With all these available uteruses why not use beef semen if the calves will be worth more? So, how many BxD crosses could we see? Select Sires Beef Vice President of Beef Genetics, Lorna Marshall, has projected this number could reach 2.75 million in three to five years. Others have speculated that could even exceed 3 million. Bottom line is there will be a lot.”
Select Sires proactively began working to build a supply chain for these calves, with the goal of helping our customers create additional profits and greater sustainability. The first and most obvious benefit to the producer is that the BxD cross calf is worth more than the traditional Holstein calf. Further down the supply chain, at the feedlot and packing level, the greatest value of superior genetics is seen, hence the need to build a supply chain to capture added semen value and create additional market value for the dairy producer.
What does “superior genetics” mean? Dr. Corah answered, “To create this added value at the feedlot level the calves must have the ability to grow and grade. At the packing level they must have top tier muscling to change the ribeye shape and fabrication potential (red meat yields) while also grading at or above plant averages. Done correctly, these calves, sold on a grid, can come close (and in some cases exceed) native steer value. The net result is increased economic returns for all parts of the supply chain. Still to be determined is the ideal breed to use; Angus, Sim-Angus, Charolais and Limousin all are being considered. My bias is Angus and Sim-Angus will likely be the larger volume breeds.”
So where can dairy producers get these “superior genetics”? The Select Sires ProfitSOURCE Program! The dynamic trio of Lorna Marshall, Lyle Kruse (Select Sires Inc. Vice President of US Market Development) and Dr. Larry Corah helped launch the ProfitSOURCE effort and it has already seen growth as sire acquisitions now include bulls specifically for BxD breeding. Select Sires’ ProfitSOURCE sires have been selected for crossbreeding on Holsteins and Jerseys. These sires excel for calving ease, growth performance, carcass merit, and they offer elite terminal beef bulls designed to meet specific genetic criteria. ProfitSOURCE sires can significantly impact our customer’s bottom line by increasing the revenue from their herd’s lower genetic value females.
All West California Sales Manager Greg Collins predicts, “As long as dairy herd reproductive performance remains good, utilization of BxD semen will continue.” He continues, “Quality is very important when it comes to BxD calves. High quality genetics along with traceability are the keys to success when it comes to creating value in these calves. Large calf groups with these characteristics will perform best through each segment of the supply chain.”
As you can see, there are many ways to make profit in the BxD business, but producers must make decisions while keeping long-term marketing in mind. Will they sell day olds, keep calves until 300 pounds, take them to a heavier weight, or even retain ownership? Although the BxD arena is relatively new to our industry and ever-changing, the All West/Select Sires team is prepared to help our customers navigate all possible avenues to determine your best opportunities.