The number of dairy cows in the US has ballooned this year, with inventory more than +200,000 head higher than last year. According to insiders, the increase is tied to the growing trend of “beef-on-dairy” cattle, which now represent between 12%-15% of all fed cattle slaughtered in the US.
For those not familiar, “beef-on-dairy” refers to the practice of breeding dairy cows with beef-breed bulls. The idea itself is straightforward. Instead of breeding every cow with a dairy bull, farmers are using beef genetics – particularly Angus, Simmental, and Limousin – on a portion of their herds. The resulting calves produced better marbling, yield, and feed efficiency than pure dairy bulls, fetching higher prices from feedlots and packers.
A combination of volatile meal prices and low-value male dairy calves helped fuel the shift. Beef-on-dairy offers a way to capture extra revenue without disrupting core milk production. Artificial insemination technology has also made implementation easy, allowing farmers to selectively breed top-performing cows for replacement heifers and the rest with beef semen.
Unlike traditional dairy bull calves that might sell for a heavy discount, beef-on-dairy crossbred calves receive a substantial premium to pure-bred dairy calves. In many cases, the premium from crossbred calves offsets feed and labor costs that have been rising across the dairy industry. That difference creates a meaningful impact on cash flow for farms managing thin margins.
According to the latest “Beef-on-Dairy Industry Report” from Purina Animal Nutrition, beef-on-dairy cattle now account for 12-15% of fed cattle slaughter. Among surveyed producers, nearly three-quarters said they were actively planning to add crossbreeding programs.
With the US beef cattle herd at the lowest levels since the 1950s, beef-on-dairy adoption is helping to cushion the current shortage in several ways. Not only do their growing numbers add to domestic supply, these crossbred cattle are credited with substantially raising dressed weights for slaughtered steers and heifers. This is thanks to enhanced muscling and carcass quality in beef-on-dairy calves compared to pure dairy breeds.
While the adoption of beef-on-dairy helps shore up both US beef supplies and dairy margins, there is another interesting implication. According to the American Farm Bureau Federation (AFBF), the rise of beef-on-dairy crossbreeding may also have significant long-term effects on milk price dynamics.
“Historically, when milk prices rose, dairy farmers expanded their herds by retaining more replacement heifers, increasing milk production. However, this cycle often led to an oversupply of milk, eventually pushing prices back down. With more dairy farmers now using beef semen on a portion of their herd, the number of purebred dairy heifers being raised has declined, inherently slowing the industry’s ability — and perhaps desire — to rapidly expand milk production in response to modest price increases.”
Conversely, when dairy prices fall, dairy farmers typically cull cows. The latest milk production report shows Q3 2025 milk production was the highest since at least 1998. Dairy prices are subsequently down as much as -33% from some milk classes. Butter prices have plunged around -28% since July. But dairy farmers aren’t thinning their herds this time around, according to Mike McCully, president of McCully Consulting. Especially with the US cattle herd at a 75 year low, the return on a beef-on-dairy calf can be equivalent to the net profits on milking a cow for two years, according to McCully. (Sources: Purina Animal Nutrition, AFBF, Bloomberg)
