More and More Dairies Diversify to Survive

Tue, 04 Jun 2024 20:42:12 GMT

Editor’s Note: This is one article in a series that is included in the 2024 Farm Journal’s State of the Dairy Industry report. The full 16-page report will appear in the May/June issues of Dairy Herd Management and Milk Business Quarterly and will be published in this space over the next several weeks. To download the full report for free click here.

(Farm Journal)

With the current economy producing low milk prices and consequently little to no income, more and more dairies are exploring options to add alternative profit sources to cushion their bottom line.

According to Marin Bozic, assistant professor in dairy foods marketing economics at the University of Minnesota, many traditional dairy farms, whose incomes were based almost exclusively on milk and meat, will expand to enterprises with a multitude of revenue streams.

“We already are seeing elements of this conversion on some farms, and innovation will allow more to follow,” he says.

We asked surveyors what avenues they are exploring to generate added profit to help with their farm’s overall profitability, and the results showed that branded beef and agritourism are leading the way. The results also illustrated that just 18% of respondents currently capture revenue from on-farm milk bottling, cheesemaking, or ice cream production. All told, a substantial portion of producers do plan to begin these activities, with a fourth of respondents’ sharing they are aiming to add branded beef in the coming years.

With super strong beef markets, it is no surprise that nearly 60% of respondents say they are currently breeding dairy cattle to beef. Diversification appears to be an essential ingredient to the modern dairy. Of all the respondents, only 20% designated their operation as dairy-only, while others described their operations by including growing crops and using beef for revenue.

Interestingly enough, dairies with beef-on-dairy operations are more likely than dairy-only operations to say they are planning to grow or expand in some way.

Jacob Larson of Larson Dairy in Florida, says as the next generation of Larsons return to the family’s 5,500-cow dairy, they’ll have to explore what makes economic sense.

“The level of return on investment in this industry is tough,” he says. “The next generation is going to need some clues as to whether this is a good return for the investment or not.”

How Can I Make Money with Beef-on-Dairy?

Wed, 29 Mar 2023 20:17:16 GMT

With drought and production costs pushing the native beef population to a record low, beef-on-dairy has a huge opportunity to keep the feedlots and processors at full capacity. This also means the demand – and prices – for beef calves are at a high. Lauren Kimble, manager of ProfitSOURCE and LCT Supply Chains with Select Sires, offers five tips on how producers can capitalize on these prices.

Know Your Buyer

Building a relationship with your calf buyer is a great way to gain visibility and make some noise for your high-quality beef-on-dairy calves. Get to know them – where are these calves headed? What does that system want? Use beef genetics that not only allow for easy calving, but also address the specific beef supply chain needs.

Calf Care

One of the perks of beef-on-dairy is that the calves are born in controlled environments – and we know that dairy producers are experts at rearing newborns. Colostrum management at birth is vital as these calves, unlike native beef calves, undergo serious change within the first few weeks of life, adjusting to the stresses of transport and new home(s).

Trace It

Offering some level of traceability demonstrates the added value of both your genetics and calf care by making it possible to validate lifetime performance. While calf prices are high at the moment, the beef-on-dairy market is rapidly evolving – and many buyers feel that a high quality, traceable ‘program’-type calf will become the norm, with everything else being discounted.

Advanced Repro Technologies

Got repro success? Using sexed male semen or even transferring full beef embryos into your lower genetic merit females are both opportunities to capture value – especially if your market is discounting heifer calves, or your Jersey crossbreds are not worth as much as they once were.

Different Marketing Streams

If you’re able to retain and raise your calves to a higher weight, marketing direct-to-feedlot can maximize on all the above tips.

Advice from a Calf Ranch

Amanda Arata, general manager with Kansas Dairy Development (KDD) in southwest Kan., oversees more than 65,000 heifers in a custom facility. She says the following is vital for the calf—whether it is a dairy or beef cross to make a good start before it is transported to the calf ranch.

The calf is born in a clean calving area.
The calf receives high-quality colostrum.
A solid vaccination program was used on the dam.
Ensure the calf is warm and dry.
Make sure it has had several feedings in it before being transported.

With beef calf prices hot, it’s time to not only capitalize on them now, but set yourself up for success in the future.