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What Can High Beef Prices Do for Your Dairy?

Libby Eiholzer, Bilingual Dairy
Northwest New York Dairy, Livestock & Field Crops

July 25, 2014
What Can High Beef Prices Do for Your Dairy?

If you're trying to maximize internal herd growth for expansion, then you most likely aren't going to want to sell any more animals, for beef or otherwise. But if you can't add any more cows, and especially if you are already weeding out lower grade heifers to sell as dairy animals, then there is another option to consider.

Some dairies are regularly breeding a percentage of their herd to beef bulls. Bull studs like Genex and ABS have programs set up to help farmers breed and market these animals. Genex's Breeding to Feeding Program uses Limousin semen on dairy cows (preferably Jersey) and the Minnesota-based Wulf Cattle Company contracts to buy back calves and raise them. ABS's InFocus program markets beef semen and tracks offspring to select the best bulls for mating with dairy cows. They cite benefits such as increased fertility, improved calving ease and decreased still births for cows bred to their bulls.

Dairy cattle sold for beef are often lacking in the physical characteristics that make good beef cows. But if dairy calves are bred and raised for that purpose, they can result in much higher quality beef animals. Although no studies have been done on the economic benefits, it would seem that breeding lower quality cattle to beef and selling the offspring could significantly increase income over what would be received for straight dairy animals.

If you have the facilities, crossbred calves can be raised with heifer calves, at least through weaning. But the key to good beef is feeding a high concentrate diet in order to increase muscle mass.

According to Mike Baker, Beef Cattle Extension Specialist at Cornell University, this is very achievable with Holstein steers. Holsteins do marble easily; if measured side by side with a beef steer of the same level of backfat, the Holstein steer would actually have more intramuscular fat, a good thing in the beef industry. Baker does cite some negatives to using Holsteins for beef: their rib eye muscling tends to be oblong instead of the round shape that consumers prefer, they generally have a lower dressing percentage (the difference between live weight and carcass weight) due to lower overall muscle mass, and they also use feed less efficiently than beef animals. If they aren't put on a high energy diet, straight bred Holsteins end up big and lanky: not ideal when marketing for beef. Using a properly selected beef sire will complement the Holstein cow in producing a calf that is more moderate in size, has the muscle size and shape desired in the market and is capable of handling a high forage diet during much of its growing phase.

If you have the facilities, crossbred calves can be raised with heifer calves, at least through weaning. They can then be raised to feeder weight (400-800 lbs.) on pasture or refusals or finished to market weight. An important consideration is whether you have the capacity to raise animals separately for finishing or if you would prefer to sell them as feeder calves.

Another notable question is what kind of market you have in your area for beef. With the increased interest in local foods, forming a partnership with a local beef farmer could be an option to sell feeder calves. Raising calves to 400 pounds or so and then selling them at a local livestock market is another. Of course the ideal situation would be to market a large number of high quality crossbreds, perhaps through a partnership between dairies and a feedlot.

The idea of breeding dairy cows to beef bulls has been around for a long time, but has yet to be put to the test by a significant number of dairy farmers. With the current and forecasted high beef prices, now could be the ideal time for some to give it a little more thought. Baker says that while "beef prices may moderate in the future, there's lots of grass and many empty dairy facilities" across the state, just waiting for an opportunity to become productive again.



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calendar of events

Upcoming Events

Beginning Farmer/Hobby Farmer Workshop $5/pp, class size is limited, so pre-register by April 15th!

April 27, 2019
9:00 am - 1:00 pm
Canandaigua, NY

This hands-on workshop is for beginning or part-time farmers who would like to improve their farm machinery skills, learn to properly and safely maintain their equipment to protect their investment. If you have been thinking about buying a tractor, new or used, two-wheel or four-wheel drive, compact or utility or more come join us. Topics include: selecting the right size/type tractor for the job; basic maintenance; staying safe around tractors and equipment; attaching implements properly; and information about ROPS and SMV's. There will be time for questions.

Pre-registration requested by April 15, 2019 email Amy with your name, address, and phone number or call 585-394-3977 x 429.
Fee: $5.00/person. Class size is limited.

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2019 Pastured Poultry Seminar, lunch included so please register by May 10th! $25/person

May 18, 2019
Registration begins at 8:00 a.m.w/ coffee & donuts with the Program running from 9:00 a.m. - 5 p. m.
Attica, NY

The main speaker this year is Eli Reiff of Mifflinburg Pennsylvania. Eli raises broilers, turkeys, sheep, and beef, all on pasture. Topics to be covered will include the pasture, feed and nutrition, marketing, costs, and much more. As we grow as farm operators and get bigger, we may not pay as much attention to the basics as we should. So those areas are where we will start, and then expand to cover the group's interests.

Mike Badger, Director of the American Pastured Poultry Producers Association will also be available for a round-table discussion. Plans are to have representatives from Farm Bureau, NYCAMH for farm health and safety, Wyoming County Chamber of Commerce, and Cornell Cooperative Extension of Wyoming County, as well as others.

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Calling all 9th-12th graders! 4th Annual Precision Agriculture Day at Genesee Community College

May 21, 2019
9:00 am - 1:30 pm Register by Friday May 10th! $15/per person includes lunch
Batavia, NY

Calling all 9th-12th graders!  We have an exciting new program for students interested in technology, science, engineering, and agriculture!
Would you like to:
  • Learn about how Drones collect information
  • Check out some potential career opportunities that have new and ever-changing technology
  • Learn how these technologies can be used in our own backyards in WNY
  • Discover potential and exciting career opportunities

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Announcements

Producers Previously Enrolled in the LGM Program Now Eligible for MPP

Dairy Producers Previously Enrolled in the Livestock Gross Margin Program Now Eligible for 2018 Margin Protection Program
The U.S. Department of Agriculture (USDA) today announced that dairy producers who elected to participate in the Livestock Gross Margin for Dairy Cattle Program (LGM-Dairy) now have the opportunity to participate in the Margin Protection Program for Dairy (MPP-Dairy) for 2018 coverage. Sign-up will take place March 25 through May 10, 2019.
Eligible producers can enroll during the sign-up period at their local USDA service center. To locate your office, visit farmers.gov.


Smart Farming Team Technical Assistance Grant Application

The Labor Ready Farmer Project is offering grants to provide up to 12 hours of Technical Assistance (TA) consulting services to farms who want to make improvements to their farm's processes in hiring, training, managing or evaluating employees. Applicants will choose from one of the following four areas for TA assistance and identify a specific project. If selected they will be matched with a "Smart Farming Team" of consultants who will provide one on one technical assistance.
  • HIRING EMPLOYEES 101 - GETTING OFF TO A GOOD START
  • ONBOARDING & TRAINING EMPLOYEES QUICKLY AND EFFECTIVELY
  • FINE-TUNING & IMPROVING THE WORKING ENVIRONMENT
  • H2-A READINESS
Please complete this application and send to Nicole Waters, Beginning Farm Project Coordinator for the Cornell Small Farms Program. The form can be submitted by email, mail or in-person at the address listed below. Please feel free to call or email with any questions.

Nicole Waters - Beginning Farmer Project Coordinator
Plant Science Building, Room 15b
Tower Road, Cornell University
Ithaca, NY 14853
Phone: 607-255-9911
Email: nw42@cornell.edu

Applications accepted on a rolling basis.



USDA Announces January Income over Feed Cost Margin Triggers First 2019 Dairy Sa

WASHINGTON, March 6, 2019 ? The U.S. Department of Agriculture's Farm Service Agency (FSA) announced this week that the January 2019 income over feed cost margin was $7.99 per hundredweight, triggering the first payment for eligible dairy producers who purchase the appropriate level of coverage under the new but yet-to-be established Dairy Margin Coverage (DMC) program.

DMC, which replaces the Margin Protection Program for Dairy, is a voluntary risk management program for dairy producers that was authorized by the 2018 Farm Bill. DMC offers protection to dairy producers when the difference between the all milk price and the average feed cost (the margin) falls below a certain dollar amount selected by the producer.

Agriculture Secretary Sonny Perdue announced last week that sign up for 
DMC will open by mid-June of this year. At the time of sign up, producers who elect a DMC coverage level between $8.00 and $9.50 would be eligible for a payment for January 2019.

For example, a dairy operation with an established production history of 3 million pounds (30,000 cwt.) that elects the $9.50 coverage level for 50 percent of its production could potentially be eligible to receive $1,887.50 for January.

Sample calculation:
$9.50 - $7.99 margin = $1.51 difference
$1.51 times 50 percent of production times 2,500 cwt. (30,000 cwt./12) = $1,887.50

The calculated annual premium for coverage at $9.50 on 50 percent of a 3-million-pound production history for this example would be $2,250.

Sample calculation:
3,000,000 times 50 percent = 1,500,000/100 = 15,000 cwt. times 0.150 premium fee = $2,250

Operations making a one-time election to participate in DMC through 2023 are eligible to receive a 25 percent discount on their premium for the existing margin coverage rates.

"Congress created the Dairy Margin Coverage program to provide an important financial safety net for dairy producers, helping them weather shifting milk and feed prices," FSA Administrator Richard Fordyce said. "This program builds on the previous Margin Protection Program for Dairy, carrying forward many of the program upgrades made last year based on feedback from producers. We're working diligently to implement the DMC program and other FSA programs authorized by the 2018 Farm Bill."

Additional details about DMC and other FSA farm bill program changes can be found at farmers.gov/farmbill.


New Guidance for Mortality Disposal Issued

NYS Department of Ag and Markets has posted guidelines on disposal of livestock carcasses, in response to reports that some rendering companies have halted pickups from farms.

https://nwnyteam.cce.cornell.edu/submission.php?id=761&crumb=dairy|1

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