May 23, 2024

StoneX Analyst Predicts Strong Demand for Beef-on-Dairy Hybrids

In a recent Bloomberg article, Nate Donnay, Director of Dairy Market Insight at StoneX Financial, shared his predictions about the demand for beef-on-dairy hybrids, as dairy farms are refocusing their breeding programs in the face of stagnant dairy prices in recent years.

Beef prices have exploded since the pandemic, with America’s beef supply the lowest it’s been since 1961. The beef-on-dairy hybrids function as a diversified income stream for struggling dairy farms, who are taking advantage of extremely strong red meat demand.

Despite the benefits, shifting breeding programs to include beef-on-dairy hybrids carries risk, as the number of available replacement cows for dairy herds in January 2024 was the lowest for that time of year in two decades. Nate Donnay explained that the number of replacement cows is already “down to the minimum level” required to maintain the dairy herd.

“Ten years from now, the beef herd’s probably going to get too big again and prices will be terrible and maybe they don’t want these dairy animals anymore,” says Donnay.

“But for the next couple of years, that demand for dairy animals into the beef herd is probably going to stay strong.”

According to CattleFax, there were 12 times more beef-on-dairy calves born in 2022 than in 2016, indicating a significantly growing trend. At least for the time being, farmers can reap the rewards of the beef-on-dairy hybrids after years of struggling with low milk prices. 

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