The use of beef sires on dairy cattle is becoming increasingly popular on farms across the country. Today, farmers are receiving top dollar for crossbred calves that are only a few days old. With the industry’s high input costs, this additional income can stretch far and wide. It can help cover seed and fertilizer costs, or assist with bulky feed bills. In essence, those extra dollars are not going to waste. However, it must be noted that fluctuating prices bring their own challenges.
At the recent i29 Moo University Dairy Beef Short Course, Derrell Peel from Oklahoma State University provided an industry outlook. The beef and dairy sectors are experiencing some of the highest and lowest points in recent memory. Prices for slaughter steers, beef-dairy crosses, cull cows, and heifers have all skyrocketed in the past year or so.
“Some weather conditions have contributed to these high prices, such as drought in various parts of the country, which has deeply affected hay prices. Recent drought years led some farmers to liquidate their herds. While some areas are on the road to recovery from drought, not all have seen the needed moisture. This year’s drought map outlook does indeed provide some room for concern. Hay availability could be a challenge this year,” declared Peel.
Because feeder cattle inventory is low, farmers are finding it difficult to maintain feedlot capacity. Despite feedlot inventories remaining stable so far, thanks to heavier finishing weights and more days on feed, Peel anticipates that a decrease in heifer retention will reduce these inventories.
As of January 1, the beef cattle inventory was down 2% from the previous year. The downsizing in 2023 meant farmers entered 2024 with fewer cattle inventories across the board. With record beef cattle inventory lows set in 1961, this year’s inventory is on track to be the smallest U.S. beef cow herd since that date, strengthening the cattle market. The total cattle inventory topped out at 87.15 million head – the U.S. hasn’t seen an inventory this small since 1951.
Producers have been cautious over the years due to high input costs coupled with rising feed prices. The growing cattle prices in the past year prompted the decision to sell more heifers as a means of securing financial stability. Peel expects farmers to breed more heifers this year as they rebound from previous financial strains.
Looking ahead to 2024, Peel predicts the trend of high cattle prices and smaller-than-normal inventories to continue. “There will be higher prices yet for a longer period of time,” Peel noted, giving farmers and industry folks alike something to ponder.
