The American dairy sector is facing a scarcity of replacement heifers, which is the technique of crossbreeding dairy cows with beef cattle to produce progeny for both milk and meat. This approach has gained favor among dairy producers looking to diversify their income sources, but it may have unexpected effects, such as the depletion of replacement heifers in the dairy herd.
A 1,000-cow dairy that produces crossbred bull calves can expect to earn about $100,000 more in 2024 than it would sell 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.
For six consecutive years, dairy heifer inventories have declined. The USDA cut its previous estimate for the number of dairy heifers available on January 1, 2023, to 8.3% fewer than it had at the start of 2022. On January 1, 2023, there were 4.059 million dairy heifers, the smallest heifer inventory in 20 years. The USDA also slashed its estimate of heifers expected to calve and enter the milk-cow herd in 2023, with 7% fewer heifers ready to enter the milk herd at the start of last year. Mature heifer inventories are also expected to decline 1% this year.
Dairy herd expansion is unlikely to accelerate owing to high demand for young animals and a dairy heifer shortage. For at least 18 months, the cattle industry will be without young animals. High beef calf prices are driving the dairy industry to produce more beef calves and fewer dairy heifers.
Addressing the heifer deficit in the American dairy sector requires a diversified strategy. While beef-on-dairy may increase variety and profitability, dairy producers must carefully evaluate the long-term effects on herd genetics and sustainability. Collaboration among dairy farmers, breed organizations, and industry stakeholders is critical in developing policies that balance the need for milk and meat production while guaranteeing the dairy sector’s sustainability for future generations.
