Alternative Animal Enterprises

Dairy Beef

Introduction

Nationally, the beef feedlot industry in Minnesota is in a unique position. That Minnesota ranks ninth in total number of cattle and calves on feed is itself significant; uniquely, nearly 50 percent of our potential slaughter cattle are Holstein steers. None of the other high-ranking cattle feeding states have this advantage. Unfortunately, half of the potential 400,000 Holstein steers exit Minnesota to be finished elsewhere, accounting for a loss in potential income to Minnesota farm families of $120 million yearly, or potential income for another 2,500 families.

Because Holsteins are noted for their leanness, Minnesota has the potential to be in the forefront of lean beef production nationally. Other favorable conditions support Holstein feeding. First is availability of traditionally low-priced Minnesota grain, the major component of Holstein feedlot diets. In a depressed grain trade, marketing this grain through fed Holstein steers holds potential for greater returns. Second, relatively small feedlots in Minnesota are in a strong position to compete in this specialty market due to direct marketing possibilities, ability to manage smaller calves, and adaptability to smaller incoming groups of cattle.

Economics and Marketing

Can a market be targeted that permits industry average or better prices? Prices for beef are cyclic, based on the balance between total cattle supply, consumer demand, and feed prices. As these cycles occur, profitability of feeding cattle will vary. Factors that influence "bottom line profitability" include feeder calf purchase price, cost of gain, efficiency of gain, and price received for finished steers.

Marketability of Holsteins is improving. In the past, Holstein steer carcasses have been priced lower due to less shapely carcasses and lower lean-to-bone ratios. However, fast-food franchises and other meat processors find Holstein beef very desirable. Also, with present grading standards, Holstein steers will grade choice readily.

If a market that will give a stable market price can be identified, profit margins for raising Holstein calves could be 8 to 10 cents per pound or $100 to $120 per head. A central factor in establishing a market is consistent flow of cattle of uniform quality. This requires planning and marketing effort. Competition among packers for the Holstein steer carcass is growing. To ensure product quality and uniformity, increased incentives have been offered by segments of the packing industry for cattle fed with specified feeding strategies. These strategies were pioneered at the University of Minnesota.

Production Practices

If properly managed, Holstein steers should reach slaughter weights at 12 to 13 months of age and produce leaner but equally palatable and acceptable carcasses as steers from beef breeds. However, for a dairy steer feeding program to be successful, it is essential that steers be fed properly balanced rations and be managed in a manner that promotes rapid and efficient growth.

The Holstein steer has a genetic predisposition to be leaner (muscle is primarily protein), and more energy is required to maintain protein than fat. Therefore the energy requirement of the Holstein steer is approximately 12 percent above that of a beef-type steer. At similar live weights, Holstein steers have up to 70 percent heavier digestive tracts with a higher proportion of protein composition than traditional type Angus steers. This protein composition is replaced constantly, contributing to higher maintenance requirements for energy. Holsteins have an 8 to 10 percent greater heat loss due to differences in hair coat and less externally deposited fat than beef breeds. In addition, Holstein steers consume 7 to 10 percent more dry matter than beef breeds.

Because of their higher maintenance requirement, high energy diets are recommended to achieve rapid gain and minimize time in the feedlot. Holsteins usually gain 10 to 12 percent faster than traditional beef breeds, often making them an undervalued feedlot animal. In addition, Holstein steers are very efficient in converting feed energy to live weight gain at weights under 1100 lb. However, feed efficiency decreases dramatically as steers become heavier.

The following sample budget will help producers plan for feeding Holstein steers. Rations and prices fluctuate over time and location; use this budget as a guideline to note those changes and their effects on the feasibility of feeding Holstein steers. The finest budgeting and most shrewd marketing plan will not substitute for inefficiency in production. Finance, market, and production information and implementation are all necessary for success in feeding Holstein steers.

Summary

Strategies of a profitable Holstein feedlot business include feeding a properly balanced ration (high energy, adequate protein), marketing steers at appropriate weights, using implants and ionophores, providing fresh water, full feeding the ration, establishing a good health program, protecting steers from cold wind and mud, and keeping good records.

Sources for More Information

Miller, K.P., R.D. Goodrich, J.C. Meiske and C.W. Young. 1986. Studies on Dairy Beef Production. Station Bulletin SB-2896. Agricultural Experiment Station, University of Minnesota.

Plegge, S.D. 1983. Dietary Considerations for Feeding Holstein Steers. Proceedings of 44th Minnesota Nutrition Conference.

Brian T. Larson
Assistant Extension Specialist
Department of Animal Science

In partnership with the Department of Animal Science

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