Archive for 000

Why Are Dairy Farmers Desperately Holding onto Their Cows in 2024? Uncover the Truth

Why are U.S. dairy farmers holding onto their cows amid a 20-year low in replacements? How is the beef-on-dairy trend reshaping the industry?

Summary: U.S. dairy farmers are shifting gears, sending fewer cows to slaughter to keep herd sizes stable. This move is driven by the profitable beef-on-dairy market, with high cash flows from selling beef-on-dairy calves. The drop in dairy replacements and rising heifer costs since September 2023 has led producers, especially in the West, to keep more cows, causing slaughter numbers to hit a 20-year low. The high value of week-old beef-on-dairy calves ($800 to $1,000 each) offers a profitable opportunity for dairy farmers, who are also investing in gender-sorted dairy semen to plan for future replacements. This trend shows no signs of reversal, presenting both challenges and opportunities.

  • Record drop in cow culling, reducing slaughter by 397,200 head over 10 months.
  • Shift driven by profitable beef-on-dairy market, boosting cash flow for dairy farmers.
  • Beef semen sales surged 276% from 2017 to 2023, with most sales to dairy farmers.
  • Dramatic decline in dairy replacements, pushing heifer costs to $3,000+ per head.
  • Week-old beef-on-dairy calves now fetching $800 to $1,000 each, a lucrative opportunity.
  • Growing trend of using gender-sorted dairy semen to ensure future heifer replacements.
  • Current trends show no signs of near-term reversal, creating both challenges and benefits.
dairy farming industry, crisis, beef-on-dairy concept, drop in dairy replacements, rising heifer costs, western areas, herd numbers, profit, cull cows, slaughter numbers, 20-year low, strategic move, beef-on-dairy market, economic incentives, milk production, high-yielding dairy cows, cattle semen sales, dairy-beef calves, $800 to $1,000, dairy cow replacements, scarcity, costs, auction markets, supply-demand mismatch, high pricing, profitable opportunity, demand, limited availability.

Imagine being a dairy farmer in 2024, facing a harsh reality in which every choice might make or break your existence. Farmers have been forced to reconsider their strategy due to the 2024 dairy crisis, mainly caused by a drop in dairy replacements and rising heifer costs. Are you interested in knowing why this is occurring and what it implies for the future of your farm? Since September 2023, dairy farmers in the United States have sent fewer cows to slaughter for 46 weeks, indicating a desperate attempt to protect their herd.

YearCows Sent to SlaughterBeef Semen Sales (in Millions)Dairy Replacements AvailableAverage Heifer Replacement Value
2017665,0002.51,000,000$1,200
2023606,0009.4800,000$2,800
2024397,0009.4709,100$3,000+

Why U.S. Dairy Farmers Are Clinging to Their Cows: Unraveling the Staggering Industry Shift

Since September 2023, dairy producers in the United States have kept more of their cows, especially in western areas. This strategic move was made due to a lack of dairy alternatives and high beef-on-dairy market pricing. Farmers want to protect their herd numbers and profit from the lucrative beef-on-dairy business by limiting the number of cows sent to slaughter.

The dairy business has seen the impact of a considerable decline in cull cows during the last ten months. Between January 1, 2024, and July 6, 2024, dairy producers in the United States slaughtered 259,400 fewer cows. Extending this pattern to September 2023, we observe a stunning reduction of 397,200. Culling numbers have fallen to a 20-year low in parts of the United States, including the West.

This rapid fall represents a strategic move as farmers stick to their herds, aided by a beef-on-dairy solid market. Record-high beef prices encourage producers to keep cows for extended periods to crossbreed calves, contributing to the historic low culling rate.

Beef-On-Dairy: The Game-Changer for Dairy Farmers’ Cash Flow 

The beef-on-dairy market is at the center of this movement, drastically altering the economic incentives for dairy producers. Traditionally, dairy producers prioritized milk production and keeping a consistent herd of high-yielding dairy cows. However, the growth in cattle semen sales to dairy producers has wholly transformed the scene. Farmers produce more lucrative calves for the meat market by inseminating dairy cows with beef semen.

This rise in cattle semen sales has improved cash flow for various reasons. First and foremost, dairy beef calves are much more expensive than purebred dairy calves. According to the National Association of Animal Breeders, beef semen sales will increase by 276% by 2023, with dairy producers receiving 84% of the proceeds. This move has resulted in week-old dairy-beef calves commanding between $800 and $1,000 each. The most excellent purebred dairy bull calves sell for less than half that amount.

The record prices for dairy-beef calves are partly due to the beef sector’s low feeder supplies, which have been at their lowest since 1972. This scarcity raises demand and, as a result, the price of beef-on-dairy calves, making it a very successful investment for dairy farmers. Dairy producers that include beef genetics in their herds do more than preserve their dairy cows for milk output. Still, they use high market prices for beef calves to boost their cash flow.

Beef Semen Sales Surge: A 276% Leap That’s Revolutionizing Dairy Farming

Some surprising facts support the enormous rise in beef-on-dairy initiatives. According to the National Association of Animal Breeders, beef semen sales to dairy producers in the United States have increased by an astounding 276% between 2017 and 2023. Specifically, sold units significantly increased from 2.5 million in 2017 to 9.4 million by 2023  [National Association of Animal Breeders].

Dale Woerner of Texas Tech University believes there are between 3 and 3.25 million beef-on-dairy animals in the United States. “The growth in this area has been exponential, creating a significant shift in both the dairy and beef industries,” says Woerner [Texas Tech University].

The Heifer Crisis: Soaring Prices and Scarce Supply Challenge Dairy Farmers

YearDairy Heifer Inventory (in 1,000s)
20044,200
20084,350
20124,500
20164,650
20204,300
20243,500

The effects of dairy cow replacements have been nothing short of remarkable. With the inventory of dairy heifer replacements at a 20-year low, scarcity pushes up costs. At auction markets nationwide, prices for dairy heifer replacements have risen beyond $3,000, indicating a significant supply-demand mismatch. This fast jump in replacement prices presents a considerable problem for dairy producers, who must now negotiate a more competitive market to renew their herds.

High Prices for Beef-On-Dairy Calves: A Golden Opportunity for Dairy Farmers

The current trend of high pricing for beef-on-dairy calves is a profitable opportunity for dairy producers. Week-old calves sell for between $800 and $1,000 a head, twice the price of the finest purebred dairy bull calves. This increase in value is caused by a combination of inadequate feeder supply and continued high demand from the beef industry. Because beef-on-dairy calves fetch such high prices, and it takes almost three years from a heifer’s pregnancy to her first calf, there are no indications of a near-term reversal. As demand for excellent beef rises and availability remains limited, dairy producers will prioritize this lucrative crossbreeding technique.

The Smart Bet on Heifers: Dairy Farmers Embrace Gender-Sorted Semen for Expansion

Meanwhile, dairy producers looking to expand their operations are increasingly resorting to gender-sorted dairy semen. This strategy ensures that more female calves, or heifers, are produced to replace old cows and sustain milk output. In 2023, 54% of all dairy bull semen sold in the United States was gender-sorted, representing a 5% rise over the previous year. This trend emphasizes the need for dependable replacements in an industry facing a dairy cow crisis.

The Bottom Line

The dairy farming environment in the United States is rapidly changing. Farmers resort to the beef-on-dairy concept to save their income flow when faced with a steep fall in dairy alternatives. While this trend gives a much-needed financial boost, it has resulted in a heifer shortage issue, raising replacement prices and forcing the sector to adjust. The increase in beef semen sales and the strategic shift to gender-sorted semen demonstrate dairy producers’ inventive methods for overcoming these obstacles. With milk supply staying static and replacement costs skyrocketing, the economic viability of dairy farming is jeopardized. The demand for smaller but bigger dairy farms and growing input prices are altering the business. The choices made today will likely affect the future of dairy farming in the United States, requiring farmers and industry stakeholders to reassess their strategy and plan for the difficulties.

Download “The Ultimate Dairy Breeders Guide to Beef on Dairy Integration” Now!

Are you eager to discover the benefits of integrating beef genetics into your dairy herd? “The Ultimate Dairy Breeders Guide to Beef on Dairy Integration” is your key to enhancing productivity and profitability. This guide is explicitly designed for progressive dairy breeders, from choosing the best beef breeds for dairy integration to advanced genetic selection tips. Get practical management practices to elevate your breeding program. Understand the use of proven beef sires, from selection to offspring performance. Gain actionable insights through expert advice and real-world case studies. Learn about marketing, financial planning, and market assessment to maximize profitability. Dive into the world of beef-on-dairy integration. Leverage the latest genetic tools and technologies to enhance your livestock quality. By the end of this guide, you’ll make informed decisions, boost farm efficiency, and effectively diversify your business. Embark on this journey with us and unlock the full potential of your dairy herd with beef-on-dairy integration. Get Started!

Learn more: 

The Untold Story of K-Kuipercrest Inspir Ardath: The Greatest Holstein That Never Was

Uncover the unknown tale of K-Kuipercrest Inspir Ardath, the Holstein cow that amazed the dairy world but never achieved her full potential. Want to find out why?

Once upon a time, there was a Holstein cow named K-Kuipercrest Inspir Ardath. Lawyer and esteemed dairy cattle historian Ed Morwick nearly acquired a half-interest in her. While he ultimately did not secure that half-interest—something that, in hindsight, was fortuitous—it turned out to be quite the setback for David Brown.

First, Let’s Introduce our Two Protagonists.

David Brown, like all of us, had his flaws. Endowed with remarkable skills as a breeder, showman, and promoter, he was often hailed as the finest cattleman of his era. Growing up on Browndale Farms in Paris, Ontario, he had towering expectations to meet. His father, R.F. Brown, was a luminary in the dairy world, winning the esteemed Curtis Clark Achievement Award in 1988 and the Klussendorf Trophy at the 1993 World Dairy Expo. As one of Canada’s most successful breeders, R.F. clinched Premier Breeder and Exhibitor honors at the World Dairy Expo and the Royal Winter Fair. His accolades included five Grand Champions at the Royal Winter Fair: Green Elms Echo Christina (1972 and dam of Browndale Commissioner), Vanlea Nugget Joyce (1974), Marfield Marquis Molly (1978), and Du-Ma-Ti Valiant Boots Jewel (1988). David certainly had big shoes to fill.  And fill them he did. His list of accomplishments was extensive: He led Ontario’s top herd in production in 1991, bred two All-Canadian Breeder’s Herd groups, and produced the All-American Best Three Females in 1998. He was twice crowned Premier Breeder at the International Holstein Show and accumulated 92 awards in All-Canadian and All-American contests from 1986 through 2004. Yet, despite two auction sales in 1991 and 1996 aimed at reducing his debts, financial relief was elusive. Over time, his wife left him, his children moved away, and his prized cattle were sold off. Eventually, David relocated to Colombia, where he passed away. Views on Brown are mixed—some saw him as a charming inspiration, while others regarded him as a rule-bending showman or an irresponsible debtor. Nonetheless, his rapid ascent and remarkable achievements in his lifetime are indisputable. Many wealthy individuals have invested vast sums of money into the cattle industry, chasing the same recognition, only to leave empty-handed. What distinguished David Brown was his nearly mystical talent for preparing animals for the show ring and transforming them into champions.

Edward Young Morwick, a distinguished author, cattle breeder, and lawyer, was born in 1945 on the Holstein dairy farm owned by his father, Hugh G. Morwick. His early memories of his mother carrying him through the cow aisles profoundly shaped his trajectory. Although Edward pursued a career in law, excelling immediately by finishing second out of 306 in his first year, he harbored a deep-seated passion for journalism. This led to his later work chronicling Holstein’s cow history. His seminal work, “The Chosen Breed and The Holstein History,” stands as a cornerstone for those delving into the evolution of the North American Holstein breed. In it, he compellingly argues that the most influential bulls were those of the early historical period. (Read more: Edward Young Morwick – Country Roads to Law Office)

The Story of K-Kuipercrest Inspir Ardath 

Arthur Kuiper meticulously built his herd around the cornerstone cow, Stone-Front Prestige Angie, at his Waupun, Wisconsin farm. Angie was a direct descendant of Prestige of Lakehurst, who himself hailed from the legendary Romandale Reflection Marquis, bred by Agro Bros. in Hamilton, Ontario. For those familiar with dairy cattle lineage, Marquis was an icon, undefeated in the aged bull class from 1967 onwards—the year he catapulted onto the premier show circuit. He earned the prestigious title of All-American aged bull not once but twice.

Stone-Front Prestige Angie produced an exceptional Paclamar Astronaut daughter named Stone-Front Astronaut Angela, who was in the dam when arriving at Kuipercrest Farm. Angela achieved an Excellent rating and recorded an impressive output of over 25,000 lbs. of milk. She then gave birth to Kuipercrest Warden Ardela, a Hilltopper Warden daughter. Ardela also achieved an Excellent rating, her pedigree further enhanced by a double cross of Astronaut genetics, tracing back through Warden’s mother.

In the late 1970s, Kuiper decided to sell off his herd. However, his emotional ties to a few members of the Angie family made him hold onto them. Faced with the challenge of finding a place for these cherished animals, he struck a deal with Theron Keller, a promising young farmer from Richland Center, Wisconsin. In exchange for Keller’s commitment to their care, Kuiper offered him partial ownership of some of these prized cattle.

In 1987, Kuipercrest Warden Ardela gave birth to a daughter named K-Kuipercrest Inspir Ardath. The “K-Kuipercrest” prefix honored both Keller and Kuiper, while “Inspir” highlighted her sire, Hanover-Hill Inspiration. Ardath’s early years were typical for a calf, marked by average growth and development. In fact, she flourished much more than the KuiperKeller partnership itself. Primarily a cash crop farmer managing extensive land, Keller wasn’t providing the cattle with the meticulous care Kuiper believed they deserved.

Brown’s Return to Our Story

In March 1993, David Brown made an incidental stop at the Fond du Lac sale barn during a visit to Wisconsin. Positioned in the front row was the enormous K-Kuipercrest Inspir Ardath. Despite her fleshy and ample appearance, Brown’s expert eye was immediately drawn to her front legs, particularly the femur— the skeleton’s longest bone, which connects the knee to the upper body. Even though Ardath was as rotund as a bear preparing for winter, Brown was confident she could be transformed into something extraordinary. The length, shape, and contour of her femur bone unequivocally promised it.

After leaving what was the winning bid with the sales manager, Brown returned to his Cher-Own Farm in Paris, Ontario. Before long, K-Kuipercrest Inspir Ardath had made her way to his barn. You would have encountered her if you stepped through Brown’s milkhouse door in June 1993. She stood in the second box stall, her chin perched on the top rail, with her hindquarters seemingly touching the pen’s eastern wall. Her stature was so impressive and her presence so commanding that one’s initial impression felt almost like an illusion.

Despite being before cell phones and the internet, word of a “special” cow would spread like wildfire through the “dairy industry”. Visitors came in torrents. Mexican and South American buyers on the back roads buying cattle asked their Canadian agents for side trips to the CherOwn farmstead to see K-Kuipercrest Inspir Ardath. They came; they stared in amazement. The cow looked great alongside two Royal Winter Fair Grand Champions, Du-Ma-Ti Valiant Boots Jewel and Merkley Starbuck Whitney, who occupied adjoining box stalls.

When Ken Empey first laid eyes on Ardath, he was struck with awe. He left the stable, sat in his car for a moment, and then felt compelled to return to the barn. He stood there, staring at her for another ten minutes. Finally, he went back to his car and drove off. In Empey’s estimation, K-Kuipercrest Inspir Ardath was superior to Brookview Tony Charity in every conceivable way.

Public interest surged and offers rolled in. Yet, Brown deemed them frivolous, most hovering around $100,000. He stood firm, unwavering in his quarter-million-dollar valuation.

Morwick’s Return to Our Story

To Morwick, the cow seemed undervalued. He speculated that she could potentially rival the legendary Glenridge Citation Roxy or even Snow-N Denises Dellia. From his perspective, investing in her was a far superior choice compared to acquiring a descendant from the Roxy or Lulu families, despite their high demand at the time. Roxys and Lulus were abundant, with hundreds on the market.

Standing there in all her glory: an outstanding bovine specimen with three generations of Excellent-rated dams; her lineage included a twice All-American great-granddam, and she descended from the top sires of their respective eras. Indeed, it is a remarkable pedigree.

”Yes,” said David Brown, “I value this cow at a quarter-million dollars, and I’ll take $125,000.00 for a half interest.

There’s lots of money left in her, even at that price.”

“Surely not for Morwick,” Morwick said. ”You wouldn’t charge him that much, would you?”

“Sure would,” said Brown.

The Enigma

Morwick was taken aback by Brown’s lack of leniency, especially considering the hefty legal bills. Brown had accumulated $25,000 in fees with Morwick’s law office, including costs from suing Holstein Canada over disciplinary actions for supposed ethical breaches at the Royal.

One day when Morwick asked Brown when he might pay, he got choked up and teary. “Surely you can pay something,” Morwick said.

“These bills represent a lot of work.” In the end, he gave Morwick a cheque for $5,000.00. I told him he could forget the rest.

Morwick decided to absorb the loss.

If David couldn’t pay Morwick for quality work faithfully performed, he asked himself, then how did he come up with the $5,000.00 he paid for K-Kuipercrest Inspir Ardath?

This was the enigma.

Morwick felt that “All these show guys are the same. Big shots with not a pot to let go in, they can always come up with enough money to buy a good cow. In these guys, ego always gets ahead of responsibility.”  Morwick felt this way as he had worked with Holstein promoters for twenty-five years.

Thus, despite Morwick’s earlier gift of $20,000.00 to Brown, the latter now expected Morwick to pay the full price for a half share in his prized cow.

Morwick figured an offer in writing might tempt him. He drew up a contract: “Offer to Purchase re: K-Kuipercrest Inspir Ardath,” the document was titled. The parties to the contract were David John Brown (hereinafter “Vendor”) and Edward Young Marwick (hereinafter “Purchaser”).

There were the usual paragraphs, all with appropriate titles. Paragraph 3 said, “The Purchaser hereby purchases, and Vendor hereby sells, for the sum of sixty-five thousand dollars, a one-half interest in K-Kuipercrest Inspir Ardath.  

It said the purchase price will be paid in cash upon closing this transaction.”

Paragraph 4 states, “Purchaser acknowledges that he, his veterinarians, or other persons on his behalf have personally inspected Ardath and are satisfied that she is in sound condition and free from disease or defect.”

The heartbreaker was paragraph 5: “The parties agree to obtain and maintain mortality insurance and insurance against all the usual perils in an amount equal to at least $130,000.00.”

Morwick’s secretary prepared the Offer with blue document covers and red seals for the signatures of both the Vendor and the Purchaser. I placed four copies into an envelope and delivered them to Brown. He extracted one and placed it deliberately atop the milk cooler.

He read the Offer. Very slowly. He came to the dollar amount. “Nope,” he said, “not enough money.” He picked up all four offers, placed them together, shook them up and down, and hit their bottoms on top of the cooler so they were all together in a tight little stack. Then he handed them back. “Give me a hundred and a quarter for a half-interest,” he said. “There’s plenty of money left for both of us.”

The next day, walking up John Street, Morwick passed a coffee shop they called the Donay Cafe. There was a For Sale sign in the window. I called the broker. “It’s listed at $199,000.00,” he told me. “Wanna look at it? It’s a power of sale. It’s going cheap.”

“Sure,” Morwick said. ”I’ll meet you there in an hour.”

Morwick redirected the $135,000 originally set aside for the half-interest in K-Kuipercrest Inspir Ardath and invested it in purchasing a building. Subsequently, he relocated his law practice to the ground floor of this new property.

Ardath Goes Head to Head with Legends

In November 1993, Brown exhibited Ardath at the Royal Winter Fair. When she entered the five-year-old class, she was bone dry; Brown had her on a strict diet to refine her form. Despite her condition, Ardath secured a commendable second place, trailing behind Merkley Starbuck Whitney, who was on her path to the reserve grand championship. Whitney, showcased by Brown for her Japanese owners, was in prime condition, with her udder at its peak. The seasoned judges at ringside could not help but remark, “The second cow’s the better one,” with her longer head, broader muzzle, and more correct front legs.

Later in the year, Whitney claimed the title of All-Canadian five-year-old, with Ardath securing the Reserve position. “Just wait until next year,” Brown declared.

The Unfortunate Ending

A month later, Morwick visited Brown’s farm. Ardath was conspicuously absent from the second box stall. “Where is she?” Morwick inquired.

“She’s dead,” said David. “She developed a lung adhesion.”

Part of her lung adhered to her rib cage. It proved fatal.”

“Too bad,” Morwick said.

Brown’s smile turned rueful as he clutched the top rail of the pen with both hands, his gaze dropping to the ground.

“I should have taken your offer,” he said.

“Why?” Mowrik replied.

“Then she would have been insured,” responded Brown.

“She wouldn’t have passed the vet check,” Morwick said. “The vet would have seen the adhesion.”

“No, She would have. Draper would have passed her.”

“That’s the cattle business,” Morwick said.

The Bottom Line

In the competitive world of dairy cattle showing, the story of K-Kuipercrest Inspir Ardath stands out as a lesson in missed opportunities. Navigating pedigrees, evaluations, and high-stakes valuations, this tale reveals the complex interplay of passion and practicality. From Ed Morwick’s initial hesitation to David Brown’s firm pricing, every decision and negotiation shaped Ardath’s unrealized potential. The emphasis on vet checks, insurance, and legal exchanges underscores the need for diligence and strategic partnerships. Ardath’s journey highlights the cost of pride and the importance of protecting investments with foresight and humility. This story serves as a reminder to balance enthusiasm with prudence to avoid squandering potential through neglected connections and misjudged valuations.

The Chosen Breed and The Holstein History by Edward Young Morwick
Anyone who appreciates history will enjoy either the US history (The Holstein History) or the Canadian History (The Chosen Breed) by Edward Morwick. Each of these books is so packed with information that they are each printed in two separate volumes.  We had a chance to interview Edward – Edward Young Morwick – Country Roads to Law Office and got a real sense of his passion and quick wit which also come shining through in his books.  Be sure to get your copies of this amazing compilation of Holstein history.

Key Takeaways:

  • David Brown’s encounter with Ardath at the Fond du Lac sale barn marked the beginning of a high-stakes saga for this extraordinary cow.
  • Ardath’s impressive physical attributes, particularly her femur bone, created significant public interest and high offers, but Brown’s asking price remained firm at a quarter-million dollars.
  • Morwick, a lawyer with substantial involvement in the dairy cattle industry, initially considered investing in Ardath but ultimately chose to purchase a real estate property instead due to disagreements over the cow’s valuation.
  • Despite being highly touted and drawing crowds, Ardath faced an untimely demise due to a lung adhesion, leading Brown to regret not securing insurance as suggested by Morwick.
  • Morwick and Brown’s professional and financial dealings added a layer of complexity and tension to their interactions, influencing the decisions related to Ardath.

Summary:

The story of K-Kuipercrest Inspir Ardath intertwines the fates of legendary dairy cattle historian Ed Morwick, lawyer, and dairy cattle savant David Brown. Ardath, an exceptional Holstein cow with an impressive lineage, captured the attention and admiration of many, including Morwick, who offered to buy a half-interest in her. However, Brown’s high valuation and refusal to settle on a lower price led Morwick to invest in real estate instead. Tragically, Ardath later died due to a lung adhesion, leaving Brown to rue his decision, as the cow could have been insured had he accepted Morwick’s offer. This tale highlights the complex interdependency of passion, investment, and fortune within the cattle business.

Learn more:

Send this to a friend