The use of beef sires on dairy cattle has gained popularity over the last few years on farms around across the country. Farmers are now receiving top dollar for crossbred calves at just a few days old. Input costs for the industry are high, so this extra income can go a long way, whether it’s covering seed and fertilizer costs, or helping with feed bills — the extra dollars are not going to waste. But fluctuating prices do come with challenges. Derrell Peel of Oklahoma State University recently gave his industry outlook at the I29 Moo University Dairy Beef Short Course.
The beef and dairy industries are experiencing some highs and lows that have not been seen in quite some time. Slaughter steers, beef-dairy crosses, cull cows, and heifer prices have all skyrocketed over the last 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 have led some farmers to make the decision to liquidate their herds. Although some areas are on the road to recovery from previous drought conditions, not all have received the needed moisture. This year’s drought map outlook does provide some room for concern, so hay availability could be a challenge this year, anticipated Peele.
Because feeder cattle inventory is low, farmers are having a more difficult time maintaining feed lot capacity. Although feed lot inventories have been maintained thus far due to heavier finishing weights and additional days on feed, it is anticipated that heifer retention will decrease these inventories, said Peel.
As of January 1, beef cattle inventory was down 2% from the previous year. Downsizing in 2023 meant farmers came into 2024 with smaller 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 then, resulting in a strong cattle market. As for all total cattle inventory topping out at 87.15 million head, the United States hasn’t seen an inventory that small since 1951.
Producers have been cautious after years of high input costs paired with high feed costs. Rising cattle prices sparked the decision to sell more heifers within the past year as a way to gain financial security. Peel expects that farmers will be breeding more heifers this year as they bounce back from previously tough financial years.
As we progress into 2024, Peel expects cattle prices to continue to remain high and inventories to remain smaller than normal. “There will be higher prices yet for a longer period of time,” noted Peel.
