USDA Reports

Will Beef-on-Dairy Help Rebuild America’s Record-Low Cattle Numbers?

Tue, 03 Feb 2026 21:10:39 GMT

America’s cow herd has shrunk to levels not seen in 75 years, falling to 86.2 million head. Weather challenges, high input costs and record cattle prices have made heifer retention a difficult decision for many beef producers, keeping numbers tight. In response, more feedlots have turned their attention toward the dairy sector, where beef-on-dairy calves are helping to fill the gap.

Can Beef-on-Dairy Help Fill Feedlot Pens?

As beef cow numbers continue to slide, beef‑on‑dairy calves have stepped up, offering feedlots a steady source of quality cattle. That growing demand is giving dairy farmers a chance to cash in on a market with lucrative returns.

A 2024 industry survey found about 72% of dairy producers are actively using beef-on-dairy breeding programs, and production numbers mirror this trend. CattleFax estimates beef-on-dairy calf production jumped from just 50,000 head in 2014 to 3.22 million in 2024, with projections likely to reach 5 to 6 million head by 2026.

These trends are reflected in the latest USDA numbers, which show just how tight beef supplies are and how the dairy herd is playing a growing role in meeting demand:

The number of milk cows in the U.S. increased 2% to 9.57 million.

Total Cattle and Calves Inventory: 86.2 million head (down 0.35%)
Beef Cow Herd: 27.6 million head (down 1%)
2025 Calf Crop: 32.9 million head (smallest since 1941)
Beef Replacement Heifers: 4.71 million head (up 1%)

(USDA Data)

Brad Kooima of Kooima Kooima Varilek believes the tightest supply of this entire cattle cycle could occur in the next 60 to 90 days. During a recent episode of “AgriTalk”, Kooima highlighted how beef-on-dairy has become a major component helping to keep the beef supply chain strong.

“The gorilla in the room, to me, is beef-on-dairy,” he says. “From a couple of standpoints, the dairy cow herd’s the biggest since 1993. It’s grown and grown, and why wouldn’t you if you can get $1,200 to $1,500 for a day-old calf?”

What used to be a steady stream of native beef calves is now increasingly made up of dairy-beef crosses. Feedlot managers say these cattle have helped provide something the beef industry has long struggled with — a reliable, steady supply.

Dr. Eric Belke, veterinarian and feedlot partner at Blackshirt Feeders in Nebraska, says that need for consistency is exactly why Blackshirt Feeders was designed around beef-on-dairy cattle.

“Historically, in the feedlot world, there has been a lot of seasonality. With the beef-on-dairy population, we have a very consistent flow of cattle throughout the year,” he explained during the 2025 MILK Business Conference. “We needed a very large and consistent supply chain.”

Belke’s experience highlights how some feedlots are restructuring their operations to lean heavily on beef-on-dairy cattle, designing facilities and supply chains around the predictability these animals provide.

“Our feedlot was really built for feeding beef-on-dairy animals,” Belke says. “Right now, we’re at a capacity of 100,000 head, and we’re under construction. Next year, we’ll be at 150,000 head. By the end of 2027, we’ll be at 200,000 head. Currently, we have about 87,000 head on feed, and over 90% of those are beef-on-dairy animals.”

What Impact is it Having on Packers?

That predictable pipeline isn’t just benefiting feedlots. Packers are seeing the results, too.

Each year, several hundred thousand beef-on-dairy animals are processed alongside native beef cattle. And the quality within these animals is strong, with many grading very high Choice and even Prime. That quality has helped secure their place in the market.

Nick Hardcastle, Cargill senior director of meat grading and technical specialist, explains beef-on-dairy calves are an upgrade to the traditional Holstein steer.

“Beef-on-dairy is more desirable because it helped overcome several Holstein difficulties,” he says. “Improvements include red meat yield — more meat to a consumer — as well as improved acceptance in branded programs.”

That progress comes from being more intentional with breeding and management. Since replacement females aren’t the goal for the dairy farmers producing these calves, they and their genetic partners can focus on the traits that matter most to the beef supply chain, like calving ease, feed efficiency, days to finish, carcass weight, marbling and overall yield.

Data is what makes that possible. By linking individual AI sires to feedyard performance and carcass outcomes through electronic identification and data sharing, some supply chains are reviewing sire performance every six months and making rapid adjustments. The result has been a measurable improvement in grade, efficiency and days to finish — driven by genetics and management working together.

The Other Side of a Hot Market

While the beef-on-dairy boom has been a big win for dairy farmers, not everyone is celebrating its rise in popularity. Kooima worries about the long-term effects of vertical integration and the growing control some companies now have over the supply chain.

“For the first time, you’ve got an integrator that can control an animal from its birthday and schedule it out 341 days later to slaughter,” he explains. “It’s a dream the packers chase. I watched what happened in hogs and poultry. This scares me to death. The combination of all of that is we’re losing price discovery. They’re going to try to slow it down as much as they can until they control the supply.”

That tension, between a system solving today’s supply problem and one that could reshape how cattle are marketed, is shaping much of the beef‑on‑dairy conversation.

With the U.S. native beef herd unlikely to rebound soon, beef-on-dairy is becoming an important part of keeping the supply chain steady. While the long-term market effects are still unfolding, the trend highlights how the dairy sector is helping meet the country’s ongoing demand for beef.

Beef-on-Dairy: A Critical Solution to the Shrinking U.S. Cattle Herd

Wed, 05 Feb 2025 16:04:57 GMT

The U.S. beef cattle herd is the smallest it has been in 64 years, and there’s little indication that rebuilding will happen anytime soon. Persistent drought and strong cattle prices have discouraged beef producers from retaining heifers, further tightening supply. As a result, the beef industry has increasingly turned to dairy farmers to produce beef-on-dairy crossbreds to help meet growing demand.

USDA NASS says as of January 1 2025, there were 86.7 million head of cattle and calves on U.S. farms.

(Lindsey Pound )

Beef-on-Dairy’s Growing Role in the Industry

During the 2024 MILK Business Conference, Dale Woerner of Texas Tech University highlighted the impact beef-on-dairy has had on the industry.

“Ultimately, these crossbred animals have improved the conventional straight Holstein steer so much, and they’ve offered more volume and a really high-quality product into the beef industry,” he said. “With low native cattle numbers, the industry has to have these cattle. Not only do they have to have them, but they have to have them grade prime or choice.”

Woerner believes that beef-on-dairy crossbreds have added immense value to the beef supply chain and should be seen as a long-term solution. “Beef-on-dairy crossbreds have added enough value to the beef supply chain that we should never change what we’re doing. We should continue creating these crossbred cattle for the future.”

A Reliable and Consistent Supply of Cattle

With native beef cow numbers dwindling in recent years, beef-on-dairy crossbreds have stepped in to fill a critical gap, offering both consistency and quality during a time of supply uncertainty. Despite inevitable market fluctuations, Woerner is confident these crossbred cattle are here to stay.

“While we can’t promise that we’ll always see $800-$900 for a beef-on-dairy calf as we do today, I don’t think we’ll ever return to the low value of purebred Holstein steers from the past,” Woerner added.

Feedlots have become especially reliant on these crossbreds. “Feedlots need these animals – they’re a top commodity,” Woerner noted. “Over the years, many feedlots have gained experience in feeding beef-on-dairy cattle, optimizing their efficiency and performance. From a feedlot perspective, these cattle are in higher demand than ever before.”

The Value of Traceability

Looking ahead, Woerner thinks it’ll take at least three to five years to rebuild the beef herd, depending on weather and market conditions. But even with that, beef-on-dairy crossbred calves are still going to be a valuable part of the industry. One big advantage he sees with these animals is the traceability they offer, which adds extra value and transparency throughout the supply chain.

“Even when native cattle numbers rebound, the traceability system in place with beef-on-dairy crossbreds will continue to offer a level of accountability that sets these animals apart in the marketplace,” he added. “I wouldn’t be surprised if feedlots and packers start offering a premium for that kind of information.”

Challenges Ahead

While the native beef herd has reached record lows and prices have skyrocketed in recent months, beef-on-dairy crossbred cattle have stepped in to help fill the gap. Woerner noted that these crossbreds have provided much-needed consistency and quality during a time of uncertainty. And although the beef herd is expected to gradually rebuild over the next few years, it’s clear that the beef industry will continue to rely on these crossbred animals to meet demand and keep the pipeline full.

Even though the beef herd is expected to rebuild in the coming years, analysts warn that it won’t happen overnight. Arlan Suderman, chief commodities economist at StoneX, pointed out that the industry hasn’t even started rebuilding the breeding herd yet. “The next takeaway is that we have not started rebuilding the breeding herd. As such, perhaps we have a little higher numbers over the next half year or so, but then things get tighter, and more significantly tighter once we actually do start holding back heifers,” Suderman explained.

A Long-Term Solution

With native cattle numbers still under pressure, beef-on-dairy crossbreds are providing the industry with a critical supply of cattle. Their value—through efficiency, consistency, and traceability—ensures they’ll remain an essential piece of the beef supply chain, even as the market continues to evolve.

Your Next Read: Navigating Uncertain Waters: The Impact of New Tariffs on U.S. Dairy Farmers

U.S. Beef Cattle Inventory Falls to the Lowest Level in 64 Years

Sat, 01 Feb 2025 23:29:49 GMT

Shrinking cattle supplies continues to be the story in the cattle market and part of the reason cattle prices continue to climb. USDA’s annual Cattle Inventory Report released Friday shows the U.S. cattle inventory shrunk another 1% over the past year, now at 86.7 million head. And when you look at just the number of beef cows, that inventory fell 1%, now sitting at 27.9 million head.

Other highlights in the January Cattle report include:

Of the 86.7 million head inventory of all cattle and calves, cows and heifers that have calved totaled 37.2 million
The number of milk cows in the U.S. increased slightly to 9.35 million.
U.S. calf crop was estimated at 33.5 million head, down slightly from previous year.
USDA NASS says the number of cattle on feed were at 14.3 million head, down 1% from 2024

All 👀 were on the January #cattle report today. Here's a look at the #beef cattle inventory over the last 65 years 🥩 . 🇺🇸 Jan inventory was the lowest since 1961 👇👇. At @TerrainAg we have amazing protein economists on the team to help #FarmCredit customers, see their work… pic.twitter.com/weg8KrjcbW
— John Newton (@New10_AgEcon) January 31, 2025

“The big takeaway as we see it was the notable upward revision of last year’s numbers, and we expected that. The past year’s kills have simply been larger than implied by last year’s survey. I think most in the market anticipated that. Not sure if the Algo traders had,” says Arlan Suderman, chief commodities economist with StoneX Group.

“Everything looks pretty in line until you get to that beef replacement heifer number, and I feel like that’s kind of a little bit of a surprise as we’ve been talking about heifer retention,” Scott Varilek, Kooima Kooima Varilek, Sioux Center, Iowa told AgDay’s Michelle Rook. “We’re thinking it’s happening and the last cattle on feed report showed a few less heifers on feed but with a 101 % estimate coming in at 99% we’re still off of year ago levels and still not seeing that rebuild in the cow herd.”

Last year’s USDA Cattle Inventory Report showed the smallest cattle herd in 73 years . And with no strong signs of rebuilding underway, along with strong prices providing no incentive to retain heifers, agricultural economists expected U.S. cattle inventory to shrink even more since last year, which is exactly what USDA revealed on Friday.

“The next takeaway is that we have not started rebuilding the breeding herd. As such, perhaps we have a little higher numbers over the next half year or so, but then things get tighter, and more significantly tighter once we actually do start holding back heifers,” says Suderman.

Higher Highs?

Cattle prices continued to hit records this week. And with no signs of those record prices slowing down, it’s a question of how high these prices will actually go.

According to AgDay’s Michelle Rook, the cattle market continues to smash new records in both the futures market and in cash cattle trade. She reported a strong fed cash cattle market, combined with the border still being closed to Mexican feeder imports has also pushed both live and cattle futures to all-time highs.

Is there any sign of a slowdown in the market, or is a top close? Suderman says fundamentally, the signs show supplies are tight, but the demand piece is a concern.

“Unfortunately, those signs usually come after the top has traded, which is why so many feeders are so nervous,” he says. “Fundamentally, things will still get tighter. But it still comes to the consumer. Consumer confidence pulled back in January, which is a red flag. Headlines are filled with scary scenarios that a trade war over tariffs could bring, which tends to further reduce consumer confidence. That doesn’t bode well for the consumer paying up for the higher cuts of meat at these price levels.”

What Will It Take for Producers to Start to Rebuild?
What would change a producer’s minds and give them confidence to grow their herds again? That’s exactly what we asked in the latest Ag Economists’ Monthly Monitor, which is an anonymous survey of nearly 70 ag economists from across the country. While some said it will just take time, others pointed to the economics of strong cow-calf returns, weaker fed cattle prices and lower prices at the sale barn.

January Ag Economists’ Monthly Monitor

(Lindsey Pound )

Other economists said:

“Today’s high prices are certainly incentive, along with the expectation of moderate feed costs.”
“Government policies, global demand, price cycle”
“Better spring forage supplies could be the most important factor in growth. More quality labor could be critical, too.”
“Confidence that the general economy outlook is positive and that there are unlikely to be negative policy shocks. And, of course, there has to be adequate forage.”
“Improved weather pattern in the West, along with profitable margins.”

Did the U.S. Cattle Inventory Shrink Even More in a Year? 60% of Ag Economists Think So

Fri, 31 Jan 2025 14:50:09 GMT

50% said they expect inventory to fall to 86 to 86.9 million head.
20 percent expect inventory to remain similar to levels last year
An additional 20% think inventory will rise to 88 to 88.9 million head.
And 10% think cattle numbers could to 85 to 85.9 million head.

What would change a producer’s minds and give them confidence to grow their herds again? That’s exactly what we asked in the latest Ag Economists’ Monthly Monitor, which is an anonymous survey of nearly 70 ag economists from across the country. While some said it will just take time, others pointed to the economics of strong cow-calf returns, weaker fed cattle prices and lower prices at the sale barn.

Other economists said:

“Today’s high prices are certainly incentive, along with the expectation of moderate feed costs.”
“Government policies, global demand, price cycle”
“Better spring forage supplies could be the most important factor in growth. More quality labor could be critical, too.”
“Confidence that the general economy outlook is positive and that there are unlikely to be negative policy shocks. And, of course, there has to be adequate forage.”
“Improved weather pattern in the West, along with profitable margins.”

Record-High Prices

January Ag Economists’ Monthly Monitor

(Lindsey Pound )

Cattle prices continued to hit records this week. And with no signs of those record prices slowing down, it’s a question of how high these prices will actually go.

Is it the supply side or the demand side driving prices? According to economists in the survey, it’s both. And that’s why out of the 10 major commodities, economists are most bullish on cattle in 2025.

January Monthly Monitor

(Lindsey Pound )

Advice to Manage Risk
Even with no end in sight, the Ag Economists’ Monthly Monitor asked economists, “What advice you would offer beef producers to consider to make sure they are in the right position to take advantage of high prices now and to be prepared for when the market changes?” Here’s what they had to say:

“Stay sold forward, and avoid over-leveraging.”
“To just keeping looking at their genetics, retaining those with the best traits to continually improve herd quality and meat marketability.”
“For those with adequate forage availability, the near-term outlook for cattle profitability is very positive. Remember, though, that all good things come to an end—those who wait too long may only have more animals to market when prices turn back down again.”
“Consider all options for their risk management strategy, including both insurance products, futures, options, or other strategies.”
“You must have something to sell.”
“Today, there is more downside price risk for cattle prices. Risk management against a significant decline in future cattle prices should be considered today.”
“Hedge sales and inputs both. Hedge the crush!”

You Ain't Seen Nothing Yet: Why Economists Say Cattle Prices Will Soar Even Higher This Year

Mon, 05 Feb 2024 17:03:12 GMT

There’s no doubt the U.S. cattle inventory continues to shrink . The latest numbers from USDA out this week showed the U.S. cattle inventory dropped 2% year-over-year with 87.2 million head of cattle and calves on U.S. farms as of Jan. 1, 2024.

(Farm Journal)

Other key figures from the report showed:

Of the 87.2 million head inventory, all cows and heifers that have calved totaled 37.6 million.
There are 28.2 million beef cows in the United States as of Jan. 1, 2024, down 2% from last year.
The number of milk cows in the United States decreased slightly to 9.36 million.
U.S. calf crop was estimated at 33.6 million head, down 2% from 2022.

“Not really a lot in the way of surprises in this report, it was pretty well anticipated,” says Derrell Peel, Extension Specialist for Livestock Marketing with Oklahoma State University. “I think the take home message here is pretty powerful in that this industry continues to get smaller. We got smaller through 2023. So we’re coming into 2024 with smaller cattle inventories pretty much across the board.”

(Farm Journal)

Peel points out with the U.S. beef cow herd the smallest since 1961 and the all cattle inventory the lowest since 1951, it’s setting the market up for more strength in cattle prices.

“We have gotten smaller than we intended to be smaller than we need to be from a market standpoint,” says Peel. “And I think that’s going to be where we jump off to think about where we go from here.”

Nevil Speer of Turkey Track Consulting says not only did the latest report shows signs of further contraction, there currently aren’t any signals showing the rebuilding of the U.S. cattle herd has started to take place.

“40% of the on feed population is heifers last quarter. So, there’s no indication that we’re ready to dig back in and start rebuilding,” says Speer.

So, could the U.S. cattle market see higher highs? Dave Delaney of Ever.Ag says it’s a bit of a loaded question, but volatility will continue to take place.

“Short-term, I think as we look at the fat cattle market, we’re on a plane of steady to maybe a softer undertone for a short period of time, but I do believe we are going to go higher in the fat cattle market, as well as the feeder cattle market.”

“We’re nowhere near done with this thing,” says Peel “We had a tremendous runup in prices in 2023. And you can look at the setup last year, and I know some producers are thinking, ‘Okay, we’ve got our run up that we’re close to the top.’ And we’re comparing a lot to 2014 and 2015, which were the last highs, but those high prices in 2014 and 15 happened a year to a year and a half into herd expansion.”

Peel says the highs of the market will be in once the industry starts to retain more heifers and the rebuilding process has taken place.

“That’s what puts the highs in the cattle market. So, we haven’t started that process yet. That’s all ahead of us,” says Peel.