There’s lots of pessimism in agriculture these days … except for beef cattle prices.
The U.S. beef herd keeps shrinking. Consequently, cattle prices remain much higher than normal.
“We’re in a weird situation right now where cattle prices are so high and so beyond the norm that nobody has a reasonable expectation where it’s going to be 12 months from now,” says Roger Cryan, chief economist for the American Farm Bureau Federation (AFBF).
Cryan noted to journalists attending the North American Agricultural Journalists annual meeting in late April in Washington, D.C., that many ranchers continue to send beef cows to slaughter.
“They’re taking a bird in the hand instead of two in the bush,” he says. This continues to add to the U.S. cow herd liquidation, he adds.
Meanwhile, the available supply of replacement heifers is limited for 2025 and 2026, Derrell Peel of Oklahoma State University writes in an April Beef Outlook column written for Farm Progress. If heifer retention increases in 2025, it will be 2027 before heifers would enter the herd, he writes.
Beef on dairy
What has helped stabilize U.S. beef supplies has been the advent of beef-on-dairy crossbreeding that’s now a key supplier of both beef and dairy cattle. An AFBF report released in February showed 72% of U.S. dairy farms now incorporate beef genetics into their breeding programs.
According to the report, this enhances marketability of dairy-origin calves by improving carcass quality and feed efficiency. These traits are valued by feedlots and packers. Crossbreeding, along with the widespread use of sexed semen, is helping to stabilize beef supply while creating a reliable revenue stream for dairy producers, according to the report.
Cryan adds that dairy farms that aren’t doing beef-on-dairy crossbreeding are not capturing the value it brings and are at a competitive disadvantage to dairy farms that do.
End of whole milk demonization
Other positive changes in the dairy industry involve an “end of the demonization of whole milk” in school lunch programs, Cryan says. Federal lawmakers have introduced bills that would allow whole and 2% milk to once again be served in schools, in addition to currently mandated skim and low-fat milk.
Cryan notes that this move is in line with consumer preferences in supermarket sales, where most milk sales are either 2% milk or whole milk.