The use of beef-on-dairy crossbreeding has been climbing in recent years, with many dairy operations now implementing beef genetics into their breeding programs.
Dairy-beef is becoming a strategic opportunity to enhance value, reduce waste and reshape global beef supply chains, RaboResearch says in a new report. The use of the approach is gaining momentum across the globe due to economic, environmental and ethical considerations, which is making the use of beef-on-dairy essential for the future of the industry, the report said.
“By integrating beef genetics into dairy systems, producers worldwide can unlock new revenue streams, improve animal welfare, and meet evolving market and sustainability demands,” RaboResearch said.
The rise of beef-on-dairy
Dairy-beef is not a new concept and has long been part of global beef supply chains through cull dairy cows and dairy-origin calves.
“Regardless of maturity, the integration of beef genetics into dairy systems is here to stay,” the report said.
Dairy-beef accounted for 3-3.3 million head of the U.S. fed steer and heifer kill throughout the 2000s, RaboResearch said. This number has risen by more than 30% since 2020, now accounting for about 4.4 million head. The increase of more than 1 million head is the result of reduced veal slaughter, breeding strategy evolution and economic incentives, according to the report.
Veal slaughter is expected to fall to just 132,000 head by 2025, compared to 587,100 head in 2019. Calves that might have once been raised for veal are now being retained and finished in feedyards.
Dairy farmers have also shifted their breeding strategies as a result of tighter milk margins and low calf prices over the last decade. This has led to increased usage of targeted breeding strategies such as the use of sexed semen and beef semen. Dairy-beef cross calves carry more of a premium than straight-bred dairy calves.
The shifting beef herd dynamics in the U.S. have also significantly increased the value of week-old crossbred calves. Week-old calves brought $800 in 2023 and 2024 and are now bringing more than $1,000 per head in 2025. This has led dairy farmers to reduce culling to preserve milk output and maximize calf income. Dairy cow slaughter has been in decline for three consecutive years.
These shifts in strategies have improved per-cow returns for U.S. dairy operations, with RaboResearch estimating livestock income at close to 10% of total revenue in 2025. Facing shorter supplies of traditional beef feeder calves, feedlots have turned more to dairy-beef crossbreds to maintain capacity.
“A key driver of the shift toward dairy-beef cross calves in the U.S. is the potential for performance advantages over traditional Holstein fed cattle,” the report said. Holstein carcass traits can be seen as less desirable than traditional beef traits, leading to discounted pricing and consumer disinterest. In comparison, dairy-beef calves have stronger muscle conformation and carcass quality traits that could rival traditional beef breeds, the report said.
“The dairy-beef animals also finish more quickly than in feedlots than straight dairy calves and are therefore sometimes considered a more sustainable and profitable option for producers, feedyards and processors alike,” RaboResearch said.
The use of a dual-purpose breeding strategy is expected to continue indefinitely, boosted by low beef cattle numbers and strong demand for crossbred calves. More than half of the dairy calves entering the U.S. beef supply chain are sired by beef bulls.
However, the report notes, once herd rebuilding begins, calf values could soften, and breeding strategies could shift again.
Global use of dairy-beef
RaboResearch highlighted the potential of beef-dairy to reshape beef supply chains in Ireland, New Zealand and Australia in particular.
Ireland’s dairy-beef sector has expanded significantly, driven by growth in the country’s dairy herd and a deliberate strategy to integrate beef production into dairy systems, RaboResearch said.
The number of dairy cows in Ireland increased by 47% percent between 2010 and 2024, largely driven by the removal of European Union (EU) milk production quotas. Irish dairy farmers have increased their integration of beef genetics, particularly since 2023. The number of dairy-origin calves entering the country’s beef supply chain grew from about 365,000 head in 2010 to about 864,000 head in 2024.
The country’s dairy-beef remains weighted toward domestic and EU markets. In 2024, Ireland exported just under 450,000 metric tons of beef, with the United Kingdom accounting for nearly half of total volumes.
Ireland is projected to raise about 900,000 dairy-beef calves each year by 2032. “With nearly all calves retained domestically and a fully genotyped herd in development, Ireland is emerging as a global leader in strategic, policy-driven dairy-beef integration,” RaboResearch said.
New Zealand’s dairy industry produces more than 4 million calves annually, with about 1.8 million deemed surplus to dairy or beef requirements. Dairy cows have traditionally been smaller framed to account for grass-based efficiency rather than beef traits. The use of dairy-beef is growing, but lacks urgency, the report said.
Several challenges remain for the increased usage of beef-on-dairy. This includes economic risk for calves due to the country’s pasture-based, seasonal calving systems, which results in a concentrated calving period that can create logistical and welfare challenges for calf management and growth, the report said. In addition, limited genetic traceability and fragmented value chains also hinder full integration.
New Zealand’s beef industry primarily relies on exports, with the U.S. as the top export destination. Shipments to the U.S. in 2024-25 accounted for 41% of the country’s total export volume. More than 90% of the exported beef is lean trim.
“To unlock the full potential of dairy-beef, New Zealand must align production with high-value export markets,” the report said. “Lean trim has underpinned the profitability of New Zealand’s beef export value in 2025 due to the strong U.S. demand for this product.”
Australia’s cattle industry is mostly beef focused, with about 90% of the herd made up of beef cattle. The sector is geared toward traditional beef animals that prioritize carcass yield and muscle cuts. In dairy-heavy states like Victoria and Tasmania, beef cattle still account for 60-70% of the herd.
“The nuance for Australia is that for broader market acceptance, dairy-beef must resemble conventional beef carcasses, not culled dairy cows,” RaboResearch said.
About 40% of dairy calves are retained as heifer replacements, leaving a significant surplus, the report said. Many of the surplus calves enter the four-to-five-day-old calf market for slaughter, which may raise ethical concerns for consumers. To address this, the industry is leaning into sexed semen and beef genetics to reduce surplus dairy calf numbers.
About 20% of calves are entering the adult beef supply chain, a signal that dairy-beef integration is gaining traction, the report said. The growing feedlot sector also represents an opportunity, with cattle on feed numbers increasing from 900,000 head to more than 1.5 million head over the past decade.
Australia’s biggest bottleneck remains calf rearing, with a clear disconnect between dairy farms and grow-out operations. Infrastructure for calf rearing is limited, and seasonal dairy calving adds complexity.
“Ultimately, a new supply chain segment must emerge—one that can compete with traditional beef systems without relying on premiums or incentives,” the report said. — Anna Miller Fortozo, WLJ managing editor
