Dairy Cattle Effect On Beef Supplies

Dairy cattle slaughter is a vital contributor to US beef supplies, said Jared Geiser, research assistant, and Brenda Boetel, extension agricultural economist at the University of Wisconsin-River Falls.

The pair made their comments in the “In The Cattle Markets” newsletter for the Livestock Marketing Information Center.

With fluctuating beef cow inventories over the past decade, the US dairy herd has offered a stable source of feeder cattle and cull cows to fill beef demand, Geiser and Boetel said.  In 2016, the dairy sector contributed 5.7 billion pounds, or 22.7%, of beef through cull cows and finished dairy steers and heifers to the US beef supply chain.

The percent contributed by the dairy industry has grown since 2002 when beef from dairy cattle contributed 17.9% of US beef supplies to 2016’s 22.7%, they said.  While growth in the amount of beef produced from dairy steers and cull cows has not been steady, it has less variability than beef from beef breeds.

US commercial beef production peaked in 2002 at 27 billion pounds, of which 4.8 billion was from dairy cattle.  Beef production in 2016 was 25.2 billion pounds, of which 5.7 billion was from dairy cattle.

 

STEERS CONTRIBUTE MORE THAN COWS

 

Finished dairy steers contribute more to US beef supplies than culled dairy cows, the economists said.  Finished dairy steers contributed 2.9 billion pounds, or 10.8%, of total pounds harvested in 2002 and 3.5 billion pounds, or 13.8%, in 2016.

Continued contributions from dairy steers can be expected with the dairy herd surpassing 2015 levels and reaching a new high since 2002.

Cull dairy cows contributed 1.6 billion pounds, or 5.8%, in 2002 and 1.9 billion, or 7.5%, in 2016.  Dairy heifers provided 349 million pounds, or 1.3%, of beef in 2002 and 356 million pounds, or 1.41%, of beef in 2016.

 

PRIME BEEF OVERLOOKED

 

Often overlooked is the amount of prime beef contributed by dairy animals, particularly dairy steers, they said.  With 85% to 90% of dairy animals being Holstein, Holstein steers contribute the largest portion of dairy beef.

While traditionally discounted, Holsteins, particularly when managed as calf feds, have the potential for quality and yield premiums.  Due to more predictability in feeding and genetics, finished Holsteins, when compared to beef breeds, will produce a larger percentage grading prime or choice.

Between 2002 and 2016, Holstein steers have contributed 32% to 60% (depending on the year) of prime beef harvested in the US.

Since 2002, the dairy industry has remained vital to beef supply and prices.  Dairy steers, heifers and cull cows provide a significant percentage of the US commercial beef production, and as such have an effect on market prices.

 

CATTLE, BEEF RECAP

 

No fed cattle sales were reported from the Livestock Exchange video auction last Wednesday.  The previous week, light sales were reported at $109 per cwt on a live basis.

Late Friday, cash trading took place at $116 to $119 with some at $119.50 per cwt on a live basis and $182 to $186 dressed.  Cattle traded the previous week was at $110 to $112 live and $174 to $175 dressed.

The USDA’s choice cutout Tuesday was up $3.12 per cwt at $206.44, while select was up 0.26 at $193.90.  The choice/select spread widened to $12.54 from $9.38 with 109 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Monday was $156.92 per cwt, up $1.99.  This compares with Tuesday’s Nov settlement of $159.42, up $1.10.