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Dual-Purpose Dairy Farms Diversify with Beef Genetics

Wagon Creek Creamery is a 50-head seasonal dairy near Helena, Oklahoma; the cows are milked once a day during the growing season, and the milk is made into yogurt, butter and cheese. During the winter, the cows graze standing forage as part of an intensive rotational grazing system.

By Candace Krebs

Wagon Creek Creamery has always seemed just a little bit ahead of its time. Originally settled by Ron Crain’s family during the famous Oklahoma Land Run of 1893, he and his wife Barbara in more recent years transformed it from “worn out wheat ground” into a 50-head grass-only dairy managed with a cell-based rotational grazing system. They also set up a creamery on their farm and started making and selling “labneh,” or yogurt cheese, a lower fat version of soft-style cream cheese, before pivoting to a slightly creamier version to capitalize on the Greek yogurt craze.


Now the Crains are pioneering another genius offering: pastured veal, which is already selling well at farmers markets.

“It’s very simple, but it’s turning out the best thing we do, dollar-for-dollar, so we’ll probably do more of that,” Ron Crain says.

As his wife Barbara puts it, “the cow does all the work.” The beef-cross calves are left on the first calf heifers for around five months, and then processed at a local custom plant, resulting in young tender meat.

BEEF-ON-DAIRY

The Crains are not alone in making use of beef genetics to diversify their dairy operation. In a movement across the industry known of as “beef-on-dairy,” dairies of all sizes are using artificial insemination and sexed semen to concentrate on getting female replacements from the top two-thirds of their herds, while breeding the bottom third to beef bulls.

Clay Fredericks grew up on a 100-head dairy in New York State and currently runs the beef-on-dairy program for United Producers Inc., a producer-owned livestock marketing company that operates 30 auctions across the Central U.S. He said in an interview that many dairies are looking to diversify by using beef genetics on their lower-end cows. Popular breed choices include Angus, Simmental-Angus and Sim-Flex.

One 80-cow dairy in his area started up a custom meat company featuring Wagyu-cross calves.

“Customers can order from them directly, but they also have a couple of local restaurants lined up to use the beef as a Friday night special type of thing,” Fredericks said.

Many small dairies are adding beef to their operations as a way to accommodate the younger generation returning to the business, he adds.

“They are looking at, what can I do on the beef side to diversify things?” he said.

UPI’s program buys calves from dairies at a pre-contracted price and sells them to feeders looking for unique attributes such as grass-fed.

Size and location can pose constraints, but overall, Fredericks says, “there are lots of opportunities right now.”

DAIRY AS BEEF

For a dairy as small as Wagon Creek, it makes sense financially to buy semen straws rather than keep a bull around, Ron Crain explains, and this also presents opportunities to experiment with different genetics.

In addition to dairy products, the Crains started direct-marketing grass-fed beef early on, after Ron asked himself why he was selling older cows at the auction for very little value. In recent years, that same thinking led to ventures like California’s Mindful Meats, which buys old dairy cows from surrounding farms and adds value to the beef through a pastured organic brand.

Founder Claire Herminjard said having an additional marketing outlet enables smaller dairy operations — her partner farms are usually around 200 cows or less — to diversify their revenue streams.

“We were the first beef company in the U.S. to proactively and transparently work with organic dairies to up-cycle retired milking cows into beef and to focus on promoting beef from mature cows,” she said. Eating older animals is already popular in Europe, but beyond that, it’s also the traditional way beef has been consumed throughout the world for centuries.

“Basically the United States has pushed cheap food in order to create abundance, so there’s enough to feed our population, and there’s nothing wrong with that goal, or that intention, but it’s created a problem on farms, because you have to produce a lot of something to create enough value to earn a living,” she notes. “That has put farms in the position of get big or get out. And that’s not a new thing. It’s been happening for a long time.”

Diversification and premium markets, she adds, are the bread-and-butter of small family farms.

Although Mindful Meats suffered a downturn during the pandemic, due to many high-end food service customers temporarily shutting down, the model has exciting long-term potential and is generating interest from others around the country.

“We’ve been approached by a fair number of folks who are trying to do something similar with a handful dairies in their own area, and I think it’s great,” she says.

Last year when the pandemic hit, the Crains were fortunate to have an online store already set up, and their beef sales were brisk, helping to keep revenues equal with the previous year and their operating budget intact.

That outcome is now a factor influencing their long-term planning. With the couple both in their early 60s, they are undergoing a thorough business analysis in conjunction with their estate planning and thinking about how they want to position the business going forward.

“I still like dairying,” Ron said on a recent afternoon while taking a coffee break before preparing for the once-a-day milking. “But it looks to us like the future is in grass-fed beef. In Oklahoma, I think that’s a better direction moving forward.”

For a direct marketing operation doing more shipping than ever before, beef products have proven easier to handle than dairy products.

Availability of labor is another factor. So far none of the Crains’ children have chosen to remain involved with the farm on a daily basis (their youngest is still at home but they joke that the other three have been “lost to the coasts.”)

“We hope that eventually there will be a person who comes along with an interest in what we’re doing,” Ron said. “The beef, the eggs, we could probably interest somebody in that.”

Dairying, he believes, is a tougher sell.

“One of the problems with a dairy is you have to own a lot of equipment,” he says, listing off the tanks, processors and specialized packaging machines they rely on to make butter, yogurt and cheese.

“We would prefer to be working with the animals, in a simpler context, and hopefully make more money while we’re at it,” he says.

OPTIMIZING GRASS

Nothing is more of a driving factor for Crain than his obsession with grass management.

He’s been a dedicated grass farmer since he got the call from his dad 25 years ago urging him to come back home from Japan, where he was teaching English as a second language, and take over the family farm.

Now, after more than two decades, Crain’s enthusiasm for intensive grazing management and its ability to rehabilitate marginal land in a semi-arid climate is as strong as ever.

These days he moves his cows three, four and sometimes five times, modeling his approach on Johann Zietsman’s ultra high-density grazing management. Zietsman is a scientist and livestock producer from South Africa and author of the book Man, Cattle and Veld, in which he explains the art and science of mob-style, or nonselective, grazing.

“It’s a style of grazing that is fascinating, because of what it’s doing,” Crain says. “It’s fertilizing the ground, but it’s helping plant diversity too, and when you do that, you have more spears of grass and more leaf mass as a result and just basically a better plant.”

Seeing the forage gains that result from harnessing the natural benefits of photosynthesis motivated him to bring new genetics into his herd.

“A dairy animal is built to milk,” he notes. “The idea is that all of her energy is going to the udder. That’s why dairy cows are bony angular things; they don’t have the physical resources a beef animal has. We’ve designed them that way, but we also left behind some of the fertility and functionality in the name of milk production.”

On the other hand, the key to optimal grazing is what Zietsman refers to as “inherent body condition,” or the ability of a ruminant animal to maintain body condition on grass.

“The South Poll is an animal that can do that,” Crain says.

GOING RED

Red-haired cattle, such as the South Poll, are also more heat tolerant, which fits a warming climate.

Crain is now artificially inseminating all of his cows with South Poll semen.

“I love the calves. They are no more than 60 pounds at birth, but man, they grow like weeds after they hit the ground. They are hardy and great keepers,” he said.

The semen is $10 a straw, compared with around $20 for dairy semen.

“We primarily plan to use the males for meat, but eventually I could actually sell bulls. There is a need for them; if you’re a breeder they go fast,” he says. 

He’s keeping the females as replacement heifers and would like to try milking a few, although he expects them to produce less milk for a shorter duration than his dairy cows. But his main focus is on finding genetics that fit his grass program best.

“I’ve looked at a French breed or two I thought I might be interested in,” he adds. “You can order Tuli semen from right here in the U.S., and that’s something I’ve been considering.”

He believes cattle producers in general will be forced to look for ways to minimize feed costs in the years to come. The cow to do that, in his view, is moderate framed, docile and can make it through the winter on standing forage, thereby eliminating the need to buy high priced hay.

“The question is, do you want to be committed to machines (tractors, balers, etc.), or to keeping animals that are easy keepers?” he says.

Neither of the Crains had business backgrounds when they took over the farm. In recent months, however, Barbara has immersed herself in online businesses classes and taken pointers from one of their sons who works as a financial analyst in the Seattle area.

“Farmers aren’t marketers typically, and figuring out return-on-investment is foreign to us,” she says. “A lot of our enterprises overlap and so it gets very complicated sorting all of that out. Even my son said he can understand why I’m pulling my hair out; the business analysis is not the same as it is for someone who’s just making a widget.”

Still, the Crains are trying to get a better handle on what’s working — and what isn’t.

Of dairying, Ron says, “the movement is toward big, and robots, and I’m not interested in doing any of that.”

Over the last several years, the state has lost hundreds of small dairies, part of a nationwide trend. As the Crains gradually build up the beef portion of the herd, they expect to milk fewer cows.

While Ron is sad about the financial strain imperiling small dairies, he also notes that adapting and evolving is a constant for small farms.

“If you want to be a small farmer, you have to learn to market, whether you like it not. You have to be able to market something — meat, milk, breeding cattle. We’re even looking at the idea of putting in a pond to grow fresh water prawns,” he says. “If you’re a small farmer, you’re going to have to jump off and try some different enterprises.”