Calf Slaughter Changes Tied to Dairy Herd Management

In both the U.S. dairy and beef sectors, there has been lots of discussion during the last couple of years about producing crossbred calves, mostly Holstein cows bred to beef-type black bulls. Virtually all U.S. veal comes from calves that originated in the dairy sector. Dairy-origin (e.g., Holstein) calves also are inputs into the beef production system (typically entering feedlots at 350- to 450-pounds). There has been a long-term transition of Holstein bull calves away from veal and into the beef production system, which has periodically bolstered U.S. beef output. But that trend reversed in response to the September 2016 announcement by Tyson Foods that they would no longer harvest those animals. But more crossbreeding by dairy farms may cause shift-back to fewer calves going into veal production and more back toward beef.

One of the few leading indicators available of more crossbreeding in the dairy sector is the number of calves being harvested for veal production compared to that in prior years. For each of the 14 weeks that began 2019, Federally Inspected (FI) calf slaughter was above 2018’s. During the next 28-weeks of the year, it was a mixture of year-over-year changes in direction (10 weeks down and 18 weeks up). Then, the last 10-weeks of the year had fewer calves slaughtered than a year earlier. Some of that 10-week period of declines was due to fewer dairy cows in the U.S., USDA’s National Agricultural Statistics put the U.S. October 1 count down 0.4% (36,000 head), and November 1 slipped by 0.3% (down 27,000 head). During the final 10-weeks of 2019, FI calf slaughter dropped year-over-year by over 14,000 head (down 11.2%). The year-over-year slip in the dairy cow herd would represent only a 2,000 to 3,000 head drop in calf slaughter for the last 10-weeks of 2019.

So far, the crossbreeding trend has been rather short-term and modest; on an annualized basis removing 35,000 to 40,000 head from calf slaughter and adding those animals to feedlots. But it may gain momentum. Currently, the LMIC forecasts record small annual calf slaughter levels by 2022.

It is unlikely that all dairy producers will move to produce crossbred steers; some regions of the U.S. could see stronger preferences for this strategy than others. Overall, the amount of interest by dairy producers is mounting, because it pencils out nicely for those with the reproductive management skills to capitalize on higher cross-bred calf prices.

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