It can never be said enough times: dairy animals are also beef animals.

And, income from the sale of market (cull) dairy cows and bulls typically makes up about 5 to 15% of the total income on a dairy. So how can veterinarians help their producers potentially capitalize on their market animals?

Jason Ahola, PhD, University of Idaho, believes most producers are “price-takers” and not “price-makers” relative to market cows. “Most producers just want to get rid of unproductive cows as soon as possible, and generally just take whatever the average of the current market is,” he says. “Granted, feeding out market cows requires more work relative to logistics — figuring out where to feed them, feeding them, coordinating shipment, etc. However, based on a lot of data, there is definitely a premium in the marketplace if producers are willing to put in some effort.”

Since the vast majority of the income on a dairy comes from milk sales, it is easy to see why dairy producers don’t put much thought into the amount of beef that results from their cowherd annually. However, there are several reasons why dairy producers should consider their production of beef as a profit center, including:  1) the increasing value of market cows, due to the fact that more of each carcass is being used to produce value-added products beyond ground beef; 2) the dairy industry contributes 15-30% of all beef produced in the U.S. via the harvest of dairy steers and market cows and bulls; and 3) consumers are becoming more concerned with how all of their food is produced, and this requires that all cattle producers work to avoid contaminating the food supply with things like drug residues.

Though feeding out market dairy cows is not widespread, Ahola says some Idaho feedyards are feeding out market beef cows, and having good luck with it, and that there has been a recent small increase in the feeding out of market dairy cows.

Not just ground beef

Historically, dairy cows have been culled based primarily on factors including milk price, stall availability, and the cost of replacement heifers. Cows were rarely culled based on their ability to produce a good carcass. Therefore, few dairymen considered them as much value since it was assumed that beef from these animals was primarily made into ground beef for fast food hamburgers, supermarket retail cases, and processed meats such as bologna.

However, in today’s marketplace, over 50% of the beef from a market cow carcass is fabricated into nearly 20 different wholesale cuts of beef, Ahola says. These whole muscle cuts are sold to retailers, restaurants, and food service and merchandised as marinated steaks, roasts, deli and fast-food roast beef, Philly steaks, fajitas and other high quality and high value products. “Even though all of these high-quality and high-value cuts are demanded by consumers, beef from market dairy cows and bulls is not as consistent or free from problems as it needs to be,” Ahola adds. “For the dairy industry to remain competitive, beef from dairy cattle must be free of defects, be tender and palatable, and be free from drug residues and pathogens.”

Of the nine million cows in the U.S. dairy herd, approximately 29 to 38% are culled annually. Dairy cows are culled for a variety of reasons, including problems associated with health such as mastitis or disease (31%), reproduction (27%), poor milk production (22%), lameness/motility (15%), or other reasons (5%), according to the USDA. A 1996 USDA survey showed over 95% of market dairy cows go directly to slaughter, and represent about 8% of the beef produced in the U.S. annually. More specifically, beef from market dairy cows makes up approximately 25% of U.S. non-fed slaughter and 18% of the ground beef produced in the U.S.

Quality audits

NCBA data from 1999 indicated market cow carcasses are widely used to supply beef to consumers via retail and food service as both primal cuts and ground beef. However, when compared to income from milk, a dairy’s income derived from market cows and bulls has only been about 4% historically. “Therefore, market dairy cows have not commonly been viewed as a product to which value or quality can be added before harvest,” Ahola says.

The 1994 National Non-Fed Beef Quality Audit estimated that an average of $69.90 was lost for every market cow and bull that was marketed in the U.S. Industry leaders relayed 5 major conclusions to the industry to address quality defects and economic losses:

    1. Too many cows and bulls are not harvested in a timely manner

    2. Too many beef and dairy cows have inadequate muscling at harvest

    3. Too many market cows are disabled prior to harvest

    4. Too many market cattle and carcasses are condemned

    5. Too many carcasses have excessive bruises

A follow-up audit in 1999 reported that a similar value of $68.82 per head was lost on every market cow or bull that was harvested. In that audit, the top three economic losses were identified as: 1) excess external fat, 2) inadequate muscling, and 3) trim loss from arthritic joints. It was reported that producers could regain these losses by improving their management (which could result in a reduction of $13.82/hd in losses), monitoring ($27.50/hd), and marketing ($27.50/hd) of market cows and bulls.

Data from the live animal and carcass portions of the 1999 audit have helped the industry determine specific quality and economic shortcomings that need to be addressed. Based on documented packer/retailer demands, of the dairy cows evaluated, 72.5% had ‘inadequate muscling’ and inappropriate body condition scores. Among all cow carcasses, 89.0% had muscling scores considered to be “lower than desirable” by packers and 31% had fat considered “too yellow.” Relative to carcass traits, 43% were considered “too light” (less than 500 lbs). “The high incidence of both light-muscled and light-weight carcasses reported by the 1999 audit indicates that there is an opportunity to increase muscle mass and carcass weight in market cow carcasses, in order to meet packer/retailer demands,” Ahola explains.

During 2007 researchers conducted another nationwide market cow and bull audit, and results are expected to be released in February 2008.  “I’m very interested in results of this new audit to see if any changes have been made since 1999,” Ahola states. However, large-scale changes relative to cull dairy cow quality over the past eight years are not anticipated.

Relative to market cow carcass quality, the “White Cow” packer grade, which is the highest value grade among carcasses from mature cattle (over 42 months old), included only 1.1% of carcasses.

Economic opportunities

Based on the incidence rate of defects identified in market cattle audits, and the $69–$70 lost for every market cow and bull harvested in the U.S., “It is clear that dairy cattle producers have several opportunities to easily improve the quality and value of their market cow carcasses,” Ahola says. “Dairy cattle producers have an opportunity to regain substantial value by simply focusing on a few key carcass traits — muscling, fat color, and carcass weight. Changing yellow fat to white fat, depositing adequate muscle, and increasing carcass weight could have gained back $26.46/head (or 38.4%) of the $68.82 lost on every animal in 1999, and would create a product that more closely meets packer, retailer, and consumer demands.”

Due to the high price of grains (corn, barley, etc.), any opportunity to feed cows energy and avoid these grains would be beneficial. In the Pacific Northwest, for example, this includes the use of potato waste, where in some instances cows can be finished on a potato-based diet absent of grain. “With the growing ethanol industry, biodiesel industry, and use of waste cooking oils, it is likely that by-products from these industries may provide a lot of energy at a reduced cost vs. traditional grains,” Ahola notes.

In the Northeast, Mike Baker, PhD, PAS, Cornell University, says there is access to bakery and other food processing byproducts such as sweet corn silage, beets, carrots, bagels and pastries. “The most economical feed will be refusals from the milking herd as well as mildly spoiled silages that are separated from the main ration,” Baker suggests. “Any economical energy sources can work.”

Not every cull cow is a candidate for feeding out. “We still don’t have enough data to determine which cull dairy cows make the best candidates for feeding,” Ahola explains. However, there are several characteristics that should be avoided without question, including cows with significant health problems or diseases (particularly Johne’s and severe mastitis), cows that are obese, cows that are emaciated and cows that are weak or have severe lameness problems.

Baker adds that Johne’s suspects need to be sold as soon as possible, and some cows with feet and leg problems can benefit from feeding on a bedded pack or pasture if available.

Feeding out market cows isn’t for everyone. “Dairy producers’ main product is milk, so they don’t think about ‘residual value’,” says Baker. “For some the objections would be space and manure management. Keeping culls around increases the amount of manure that they need to account for.”

Manage them right

Ahola says in the early feeding period, market dairy cattle have a reduced efficiency of gain, probably due to several factors. “Lactation has just stopped in these cows, and a substantial amount of tissue metabolism occurs for a time after being dried off.”

“I think that the cows are just ‘tired’,” Baker concurs. “They’ve been in the milking string and in some situations the stress of free stalls is compelling. There is also the issue of the maintenance requirement associated with lactation.”

Cows are also adapting to different conditions such as pens and waterers, as well as a different diet that is much higher in concentrate (upward of 85%) compared to the ration they received while lactating. In addition to metabolic changes in the udder, the digestive system, including the rumen and its microbial contents, has to undergo major changes.

Some studies are being done measuring the impact of implants and substances such as ractopamine in the feeding period (see Market Dairy Cow Feeding Case Study on page 24). “There is clear evidence that implanting market dairy cows will increase efficiency of gain,” Ahola says. “However, the effect of feed additives such as ractopamine hydrochloride has not yet been reported. Since it has a positive effect in feedlot steers and heifers, including Holstein steers, it seems likely that it will provide some increase in rib eye area and carcass weight.”

Ahola says research is needed that should include: 1) feeding lower-cost refusal feeds or by-product feeds in order to drastically reduce feed costs, 2) feeding cows for a longer period of time to increase the likelihood of cows reaching the White Cow grade and increasing their value, and 3) establishing a method to eliminate cows with diseases such as Johne’s prior to feeding, in order to reduce feeding costs significantly.

The recent increase in the use of custom dairy heifer development services is evidence that dairy producers are interested in “farming out” practices that may be managed better if given to someone else, especially if they don’t want to keep culls on the property to feed. “Because feeding out cull dairy cows might increase labor and management costs on a dairy, it seems feasible to utilize a custom feedyard to feed-out cull cows after they are culled from the lactating herd,” Ahola suggests. “The dairy producer would still have to be willing to wait a few more months before getting paid, cover feed costs, and take the risk of mortality while the cows are on feed. Yet, the producer should also be able to increase the quality of their cows and add weight in order to generate more income and more profit on each cow.” 

How feeding adds value

Substantial opportunity exists in the dairy industry to improve the quality and add value to market cows and their carcasses. Market dairy cows should be viewed as a beef product – particularly one that can be modified to improve its quality and value.

Generally, feeding out cull cows can add value to dairy cows in a variety of ways. This includes a gain in body weight and body condition, dressing percent improvement, muscle tissue replenishment, and changing fat color from yellow to white.  In addition, feeding cows can allow producers a chance to access higher prices for their cows (based on documented market price seasonality). 

“Unfortunately, few studies have evaluated the effect of feeding on market dairy cow carcasses,” notes Jason Ahola, PhD. There are actually several major inherent advantages to feeding market dairy cows compared to market beef cows. In general, when compared to beef cows, dairy cows have greater propensity to marble than beef breeds, heavier carcass weights (and more total pounds of beef to “upgrade”), younger average age at harvest and more availability on a year-round basis.

“From a health standpoint, feeding cows can enable cows to overcome some lameness problems by removing them from concrete and improving their health status by removing the nutritional demand of lactation,” Ahola explains. “The frequency of antibiotic residue incidence can also be reduced or ideally avoided if cows are fed for a period of time longer than the withdrawal time. And, input costs to cull cows on feed can be reduced by feeding them refusal feed from the dairy.”

Mike Baker, PhD, PAS, adds that in a feeding trial, when the market cows arrived, 30% had violative residues. “After 72 days on feed, there were no violative residues,” he says.  

In addition, a major obstacle to educating dairy producers about Beef Quality Assurance (BQA) guidelines stems from the limited income generated from market dairy cows. If market dairy-cow value is enhanced so that dairy producers view market cows as a valuable product and profit center, improvements in other BQA-related topics (non-ambulatory downer cows, injection-site lesions, drug residues, etc.) may be achieved.

Baker says one packer has expressed interest in rewarding producers that are BQA-certified. “That hasn’t come to fruition yet, but I expect some day it will,” he says.

And perhaps an intangible value can also be derived from this practice. “If U.S. producers cannot assure consumers that they are producing safe, nutritious, and wholesome beef from beef and dairy cattle, they will lose consumer confidence in the safety and security of U.S. animal products and ultimately foreign products produced at a lower price will out-compete U.S. products,” Ahola says.

“White Cow” grade

There is a growing demand among the retail and food service industry for packer-graded “White Cows,” says Jason Ahola, PhD. This is not an official USDA quality grade, but rather is identified only by packers. Packers are attempting to provide retailers and food service with lower-priced middle meats (ribs and loins) that appear to be higher in quality and more palatable than traditional market cow beef. “Cattle-Fax says in the marketplace, cow packers are paying producers about $5–10/cwt on a carcass weight basis above cutter/canner carcass price for carcasses that fit into the White Cow grade,” Ahola says.

Cattle that have been fed a high grain diet have white-colored fat, which is generally preferred to
yellow-colored fat by consumers when purchasing beef in a retail case. “It is a consumer perception issue,” explains Mike Baker, PhD, PAS. “The yellow fat makes the meat appear old.”

The yellow coloring occurs when cattle are consuming a diet that is high in beta-carotene (Vitamin A), which is typical of grasses and forages. The beta-carotene is stored in the fat, but can be removed when cattle are fed a high concentrate diet for a short period of time, Ahola says.

Specifications for the White Cow grade are not consistent; however, vague specifications are included
in the following table.