103 - The Economics and Role of Beef X Dairy Calves in the Beef Supply Chain

Utilizing beef genetics in dairy herds to produce terminal beef x dairy (BXD) crosses is a growing trend in the U.S. dairy industry. It has been estimated that more than two million U.S. BXD calves were born in 2020, which is a practice that is expected to continue to grow throughout the foreseeable future. While not a new concept, the widespread adoption, scale, and strategies currently being used to produce BXD calves have recently received considerable industry attention. Although the increased duration of feeding exposes BXD feeders to increased price and production risks when compared to straightbred beef cattle, these risks are met with several potential benefits. A prime example of such benefits includes a consistent supply of uniform, traceable feeder cattle that are easily age and source verified, that also serve as ideal candidates for enrollment in or development of other value-added marketing programs. Current demand, as indicated by newborn calf prices, suggests that the industry perceives BXD calves to be superior when compared to their straightbred dairy breed contemporaries, and at times, suggests that they may be overvalued. Sustaining such demand will require BXD calves to meet or exceed the performance and profitability expectations of the various production sectors of the beef industry. Results of a multi-year analysis of the economics of BXD calves as compared to cattle of straightbred beef or dairy breed composition will be presented. Furthermore, specific factors expected to influence value throughout the production supply chain will be outlined and discussed. Calfhood management practices that promote calf health, paired with genetic selection strategies focused on complementary traits that minimize cost of gain and increase cutability, such as feed efficiency, carcass yield, and muscularity, will play key roles in sustaining the value of BXD calves to all aspects of the beef supply chain.