Dairyman sees Wagyu as ideal beef cross

No high energy diet, the key with this breed is to take your time,’ says Adam light (left). He and his cousin Ben (right) are partners in Lightning Cattle Company, Lebanon County, Pennsylvania. They raise Wagyu x Holstein crossbred cattle for direct beef sales. They say the full-blooded Wagyu and dairy crossbreds are quite docile. They leave the heifer barn at Adam’s dairy weighing around 500 pounds, come here to Ben’s father’s farm on grass and supplemental forage until 900 pounds, then finish back at Adam’s dairy to final liveweight 1450 to 1500 pounds. This is Part 2 of a Beef on Dairy series. To read the May 13 edition’s PART ONE, CLICK HERE. Photos and story by Sherry Bunting, Farmshine, May 20, 2022.

MYERSTOWN, Pa. — No, they don’t get massages, and they aren’t fed beer as the stories go about the intimate care of the Wagyu in Japan. 

However, at Spotlight Holsteins in Lebanon County, Pennsylvania, Wagyu is the beef-on-dairy crossbreeding fit, and the cattle are given the time they need to produce the outstanding beef characteristics the Wagyu are known for — doing so on a lower energy diet.

The whole thing started before 2020, the year Adam Light sold his 100-cow registered Holstein tiestall dairy herd in Jonestown and purchased the 240-cow robotic dairy farm and herd from Ralph Moyer in nearby Myerstown (above).

Today, Adam and his cousin Ben Light, a landscaper, are partners in Lightning Cattle Company.

They started with three Wagyu, two bulls and a heifer, purchased from the September 2018 dispersal through Hosking of the late Donald ‘Doc’ Sherwood’s Empire State herd he had bred over 17 years from imported genetics near Binghamton, New York. Doc Sherwood retired that year, and he and his herd were profiled in Farmshine (here)

Adam and Ben brought their investment home and had Zimmerman Custom Freezing collect the bulls. They also flushed the heifer for embryos.

Not only did they begin using those straws of Wagyu on some of Adam’s dairy cows, they also began making some available to other dairy farmers in return for first-dibs to buy the offspring, and they began leasing bulls to farms with beef cow-calf herds.

Today, they have two full-blooded Wagyu bulls, two full-blooded females, plus 34 crossbred animals in various stages of beef production, and they have sold almost a dozen finished beef.

“The key with this breed is to take your time. They need protein to grow, but on the energy side, they don’t need a whole lot. There’s no high energy diet in this. It’s really quite simple. Whatever the dairy heifers get is what the Wagyu crossbreds get, which is a kind of lower energy feed,” Adam explains.

The calves start in the nursery barn at his dairy, grouped with replacement heifers on automated Urban CalfMom feeders, where milk intakes can be customized. They also receive the same calf starter, calf grower and hay.

When they reach 400 to 500 pounds, the crossbreds are moved to Ben’s father’s crop and poultry farm near Jonestown, which is also home-base for Ben’s landscaping company.

There they become Ben’s responsibility until they reach 900 pounds on pasture with some supplemental forage as needed.

At around 900 pounds, the cattle come back to Adam’s dairy, where they are housed and fed the same mostly forage diet on the same steady growth plane of nutrition as the breeding age and bred heifers. 

They finish at 1450 to 1500 pounds at about 26 months of age and are sold as beef quarters, halves and wholes from pre-orders, with the buyers paying the custom butcher for processing.

Like the Wagyu breed, Holsteins are slower to finish out. The difference is a straight Holstein needs a push with a high-energy diet to reach a higher quality grade, whereas the Wagyu crossbreds do it on lower energy feed.

“You really want to raise them 26 months, that’s longer than for other crossbreds. For us, it’s not a problem because we have the facilities, and we can feed them economically — right with our dairy animals — and have a more valuable beef animal at the end,” Adam explains.

After those initial years of lead time, Lightning Cattle Co. sold nine animals for beef in 2021. They expect to sell 10 in 2022, which should put them even on their original investment and the cost to make embryos to keep their Wagyu seed stock rolling forward, and they project to double the number sold in 2023 based on calves started in 2021.

What they sell is known as American Wagyu beef — mostly F1 Wagyu x Holstein with a few Wagyu x Angus and Wagyu x Jersey. 

Having access to the crossbred calves from the dairy and beef herds that are using their Wagyu genetics helps ensure they can expand beef sales as demand grows, without tying up Adam’s dairy herd to make more crossbreds.

On his own cows, Adam turns to Wagyu after giving a cow two or three chances with Holstein. He’ll modify that decision based on visual appraisal and milk production, with an eye for the number and type of cows he needs and wants dairy replacements out of.

“They settle fast with Wagyu. The difference is evident under a microscope,” Adam reports.

Why Wagyu? Adam recalls his grandfather had some back in the early 2000’s. Half a dozen Wagyu cows and a bull were payment on a debt, which he added to the beef herd on his crop and livestock farm.

“No one really knew what they were back then,” Adam recalls, noting they aren’t beef show animals on-the-hoof. The outstanding meat characteristics are only seen on-the-rail as the flecks of fat are distributed evenly throughout the lean.

Almost 20 years later, Adam did the research. He learned about the breed from Japan, where there are different grades, names and regional identifiers for specific lines, and their tenderness transmissibility.

“The dairy industry was pretty ugly, and we were getting a bill instead of a check for our bull calves. Heifers weren’t worth much either, so we wanted to make a valuable animal to offset when other parts of the dairy industry are ugly,” Adam reflects back to 2018.

Wagyu won’t ring bells for average daily gain or fast finishing. While there are feedlots on the West Coast specifically dedicated to finishing F1 Wagyu dairy crosses, it’s different in the East and Midwest where they are mostly marketed into niche direct sales to consumers and restaurants.

Adam sees the Wagyu as a good fit for his dairy because he can optimize the assets he already has and feed them right with his heifers, instead of raising more heifers than his dairy needs. 

“We’ve had different repeat customers tell us the big thing they noticed is the roasts are so much better, with no dry spots,” Adam relates. “I didn’t think there could be that much difference, but there really is, and it seems the Wagyu x Holstein is a great cross for that.”

Even in Japan, the dairy cross is sought as an economical option of their preferred beef — owing to this compatibility. Holsteins deposit marbling in a manner similar to Wagyu — but the Wagyu genetics put the quality into overdrive.

Selling by halves and quarters is less work than selling by beef cuts. Buyers are getting a range of items with some options to customize how they get their portion processed. They can do a simple cut-and-grind or ask for special order items such as bologna.

Lightning Cattle Co. has been approached by restaurants in the area, but to serve them, Adam and Ben would need to use a USDA-inspected plant, not a state-inspected custom butcher. USDA plants are few and far between and booked well into the future.

“We’ve had no issue selling the meat, and we’ve not done any advertising,” Ben notes. “We figured if we advertised too much, we might not be able to meet the demand. We’re taking it step by step.”

To price the quarters and halves, Adam believes in being fair and reasonable.

“We go off what the steers are selling for at the New Holland auction,” he says. 

They look at the Choice and Prime steer price (not the dairy beef) and add a little to that for the Wagyu influence. The customer pays the liveweight price and the butcher’s fee. 

Adam and Ben help buyers understand what they are getting and their cost per pound of cut-and-wrapped beef by converting it on a dressed basis for an informational estimate. 

“It’s tough to create a market that doesn’t exist, but that’s what we’ve had to do,” Ben adds.

This is another reason the Lights have taken it step by step, giving themselves some growing room by spreading seed stock to other dairy farms for access to more calves.

Last fall (2021), they started their biggest group of crossbred calves that will finish out in 2023, double the number for 2022.

They have begun thinking about setting up a facebook page and had Lightning Cattle Co. T-shirts made, but they are still a bit cautious about advertising to be sure demand doesn’t get too far ahead of cattle coming up through.

The cousins like working with cattle, and they take pride in selling a finished product to others in their community. This also gives them opportunities for conversations with consumers about beef, dairy, and farming in general.

“Some people have heard of Wagyu beef from Japan. Some have heard you could pay $200 for a fancy 12-ounce steak, and some people don’t know much about it at all,” says Ben about the learning curve and the way crossbreeding makes this beef more economically accessible.

“What people really like is the idea of buying beef from farms, and that gets them interested in trying it,” he adds.

That’s the window of opportunity for the quality of the beef to sell itself into the future.

“It has been fun,” Adam admits. “It’s something different, and we don’t know where it will take us.”

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BEEF ON DAIRY, Part I: History and market dynamics to know as trend boosts dairy revenue

CAPTION: The USDA All Cattle and Calf Inventory shows declining numbers of beef and dairy cows. Significant is the 3% decline in both the number of dairy replacement heifers and beef replacement heifers as of Jan. 1, 2022 vs. year ago. More dairy farms are incorporating beef on dairy strategies into their business management.

EDITOR’S NOTE: May is Beef Month, and beef is becoming a bigger part of dairy today. In Part I in this series by Farmshine contributor Sherry Bunting — a former qualified live beef cattle grader, market reporter and past editor of the former Livestock Reporter — provides a helpful and experienced perspective on converging market dynamics that are opening doors to revenue for dairy farms.

By Sherry Bunting, Farmshine, May 13, 2022

EAST EARL, Pa. — The trend among dairy farms to breed a portion of dairy cowherds to beef sires is having a positive impact on revenue in several ways.

First, the bull calves bring more money. Week-old 90- to 120-pound crossbred dairy bull calves bring roughly double the price of a straight dairy calf at the livestock auctions. Last week, auctions in Lancaster County, Pennsylvania. sold crossbred calves averaging $300, while straight Holstein bull calves of the same weight averaged $150.

Many farms are also feeding some crossbreds for beef sales direct to consumers — a burgeoning cottage industry that faces some bottlenecks because of limited small butcher capacity in a consolidated beef industry.

Second, dairy replacement heifers and young cows today are worth more – a lot more. According to the May 6 USDA Monthly Comprehensive Dairy report, fresh cows nationwide averaged $1468 in April, compared with $1009 a year ago; bred cows averaged $1417 vs. $1039, and bred heifers $1363 vs. $985. That’s a 37% increase for bred replacements, 45% increase for fresh animals.

A portion of this gain can be attributed, of course, to the rise in milk prices, but one key factor is the beef on dairy trend that has blunted the expansion curve of gender selection for heifers through sexed semen. 

Specifically, there are 3% fewer dairy replacement heifers in the U.S. as of Jan. 1, 2022 compared with a year earlier, and 1% fewer milk cows, according to the January USDA semi-annual All Cattle and Calf Inventory report. The next look we’ll get at these numbers will be July.

Third, milk price gains are supported in the longer term by this restraint on what was previously a runaway train of increasingly available dairy heifers. Fewer replacements blunt the milk production expansion curve capability. 

This is happening not just in the United States, but also in New Zealand and Australia, according to analysts quoted in New Zealand’s Farmers Weekly, predicting continued strength in annual milk price — in part due to the limited expansion capability. As feed prices rise, having two commodities — dairy and beef — offers some ways to look at feeding efficiency, such as feeding milk cow refusals to beef animals. Diversification also helps spread risk.

Changing the equation

Like the dairy cow herd, the beef cow herd is in a cycle of decline. The Jan. 1 Inventory Report showed the number of cattle on feed for beef was up slightly, but beef cow numbers are down 2% and beef replacement heifer numbers are down 3%, just like for dairy. This trend is being exacerbated by further culling due to drought in some major beef regions and big concerns for cow-calf operators about concentrated market power in the beef industry.

Total U.S. cattle numbers (beef and dairy of all ages and types) are 91.9 million head as of Jan. 1, down 2%. Looking at cowherds, there are 30.1 million beef cows and 9.3 million dairy cows as of Jan. 1. The additional beef animals produced via crossbreeding on dairy farms is still just a fraction of a much larger beef industry — even as beef cowherd numbers and calf crop decline.

At the same time — contrary to the marketing strategies of elite plant-based globalists — consumers want beef. They want quality beef. And they are looking to source from local farms and small processors or brands.

Anyone who has shopped for beef at the large chain supermarkets in the past two years has found inconsistent availability and poor selection more often than not. A big part of the salable meat is roasts, and if they aren’t inherently tender, people must know how to cook them. Ground beef still reigns, but even that is a crapshoot if you’re shopping at a big box store.

People who taste good beef, will crave good beef, and more people today are starting to realize beef is good for us and the planet — regardless of what the globalists, climate controllers and food police are trying to force-feed us. 

The demand for off-farm beef sales has grown to the point where custom slaughter facilities are booked several months to a year in advance. This includes farms that want to process their market dairy cows through voluntary culling, for direct sales to consumers, marketing the circle-of-life concept of beef from dairy. This, along with the concerns about market transparency, is why we hear so much about revitalizing or creating regional infrastructure to expand USDA-inspected small processor capacity and state-inspected custom butchers. 

Strategies vary

So, what do ‘beef on dairy’ crossbreeding programs look like? This is something land grant universities are following with research on different breed combinations. Sessions about beef on dairy are well-attended at dairy conferences. The bull studs have been marketing beef sire genetics specifically for dairy, and Holstein USA has a program with the studs using an Angus-Simmental crossbred genetic pool showing how it matches up to Holstein.

How beef on dairy happens varies from farm to farm — 30 to 40 years ago, a dairy farmer would breed first-calving heifers to Angus for a smaller calf. Some also doubled as farmer-feeders with a small feedlot or pasture-growing feeder cattle. Back then, one could afford to feed the purebed Holstein steer to Choice grade with cheap corn. They take longer to finish to a high quality grade, especially when backgrounded on pasture for a few months of frame growth. 

But then came the boxed beef carcass-size discounts prevalent from 1994 through 2014. Feeding a backgrounded Holstein to grade at higher grain prices became inefficient and very costly. Veal sales also came under pressure. These combined trends made Holstein bull calves almost worthless for many years.

Today’s beef industry is increasing its tolerance for larger carcasses, appreciating the ability to sell more beef pounds per animal to spread fixed costs, as well as improve the ‘carbon footprint’. We don’t hear the ‘too big for the box’ mantra justifying horrendous carcass-size discounts anymore — as long as they grade — because consumers are returning to good beef, just like they are returning to butter and whole milk.

From Angus and Simmental to Charolais and Fleckvieh, there are beef on dairy strategies popping up everywhere. The black hide continues to be important in many markets where cattle are eventually sold to feedlots that sell to packers that utilize the Certified Angus Beef or other similar ‘House’ brands. 

Dietary Guidelines created problem

CAB is a USDA-Certified brand that emerged in the 1980s, when the Angus Association decided to do something about the problems USDA created for beef demand when the Department diluted the Choice quality grade to ‘align’ with emerging government Dietary Guidelines.

We are all familiar with what happened to milk, butter and other dairy products since the advent of the anti-fat Dietary Guidelines 40 years ago. It happened in beef too. 

In the late 1970s, USDA ‘widened’ the Choice grade to include the upper third of the ‘Good’ grade and renamed the ‘Good’ grade as ‘Select.’ They said they were responding to consumer demand for lean meat, but the name change and dilution appeared to be more of a stealth approach to herding consumers.

We know today this has backfired, but even back then, there was an almost immediate reaction from the higher value restaurant trade. They were getting ‘Choice’ beef that ranged from ‘old’ Choice to ‘new’ Choice, and that spread in marbling scores (intramuscular fat flecks) is huge. 

The lack of uniformity and the increase in unfavorable eating experiences were a problem. Those flecks of fat are what give the beef flavor and tenderness. Today, we know the intramuscular fat is not much different from olive oil in its healthfulness, but that’s another story.

By 1980, the Angus breeders had implemented their solution with Certified Angus Beef and marketed it to the unhappy restaurant trade and eventually industrywide.

More than ‘marketing’

Not only do cattle have to have a ‘predominantly’ black hide to qualify for the CAB-premium and brand, they must also grade in the top two-thirds of Choice on marbling score.

In effect, the Angus folks developed a brand that increased favorable eating experiences and brought back more uniformity by requiring the beef carrying the CAB brand to conform to the ‘old’ USDA Choice grading standards as they were before the anti-fat food police intervened.

Since they came up with the plan, of course, the black hide was important as the vehicle for their Angus genetics, and genetic work ensued to trace back and determine the traits (expected progeny differences, EPDs) that consistently delivered higher quality, more uniform beef grown efficiently and at a moderate frame size to fit the emerging ‘boxed beef’ trend.

As CAB took off and premiums were paid for qualifying cattle, almost every breed focused on developing lines with black hides and better marbling scores and moderate frame without the excess exterior fat. Similar ‘house brand’ Angus programs use some of the same criteria, but it was CAB that repudiated the USDA Choice grade change by creating their own certification program – something USDA graders implement at the slaughter plant for a fee. 

Because it solved a real quality problem, the fees paid to the graders and the premiums paid for the cattle were absorbed by the market because CAB could differentiate in a watered-down beef industry to a market hungry for those quality and reliability standards. Buyers wanted to know that if it was stamped Choice, it is Choice, the old Choice.

Fast forward to 2020, amid a global pandemic shutdown, supply chain disruptions, consumer concerns about where their food comes from, the growing awareness of the stranglehold four big meat packers have on the entire global beef business, label confusion, plant-based pushing, and the involvement of the Big-4 in future lab-created meats… All of these factors are opening a door that heretofore only a few dairymen pursued.

Today, dairy farms large and small can succeed with beef on dairy strategies.

Selecting what to cross

When selecting sires for beef on dairy to produce feeder calves or fat cattle that are auctioned or sold on a live basis to feedlots or packers, avoiding white on certain parts of the hide is important and a genetic consideration to avoid discounts. This is especially true at today’s rising corn prices because Holsteins are known to need more time on feed to finish, or a hotter diet fed at a younger age. Some Angus and Simmental genetics are designed to diminish occurrence of a white pattern, deemed a tip-off to buyers of cattle for feedlots that are concerned about feed efficiency differences between beef and dairy breeds.

Those crossbreeding with Charolais will find their dairy breeds produce what feedlots view as the desirable ‘smokey’ hide Charolais with muscling that compensates for the angular dairy frame when visually appraised.

But there’s another twist to this tale, in addition to traditional beef breeds, the unique heritage Wagyu is emerging. The genetics of full blood Wagyu are pricey, American Wagyu a bit less so, and F1 Wagyu x Dairy more affordable — relatively speaking.

In fact, in Japan, where the Wagyu breed originated and is a national treasure, the dairy cross is also popular as a more economical version of their most valued signature beef. 

Wagyu have some things in common with dairy breeds, especially Holsteins. They take longer to deposit the intramuscular flecks of fat (marbling), but the Wagyu don’t need a high-energy diet to do so, and the way the flecks are deposited is also compatible with dairy breeds. 

Wagyu beef has its high-quality flavor and tenderness reputation because of the even distribution of these smaller flecks of fat throughout the lean. Holsteins tend to marble this way also, but the Wagyu is the master on this score.

Prized for what’s ‘inside’

This heritage breed first arrived in the U.S. in the 1970s and went through a resurgence in the 1990s for its quality consistency in a time of dilution and wide variance. You might have seen it on a menu as Kobe beef, so named for a specific region in Japan where the most elite black-hided strain of the Wagyu is raised.

As the Wagyu is making its third come-back now in the U.S., the F1 cross (Wagyu x Holstein) is a ‘thing’ and quite popular among dairy producers in other countries, like Australia.

The caveat with Japanese and American Wagyu is they do not have quite the beefy outward appearance of a traditional European beef breed. Their conformation is described by breeders as dairy-like, more angular — wider in the front than rear, owing to a history of pulling carts in Japan. They are smaller framed and slower growing.

This means using Wagyu in a dairy crossbreeding program is successful when producers market the beef directly to consumers or sell the cattle to buyers who understand what they are buying. They won’t see what Wagyu are prized for by looking at them from the outside in an auction setting. The value is visible on the inside in how the flecks of fat are distributed for flavor and tenderness.

CAPTION: Dairy producers like Adam Light at Spotlight Holsteins, Myerstown, Pa., raise dairy on beef crossbred cattle right along with the dairy replacements to a certain age when dietary needs start to differ on a beef vs. dairy track. Adam and his cousin Ben have been building their Lightning Cattle Company raising Wagyu x Holstein beef for direct sales.

Making a go of it

For Adam Light of Spotlight Holsteins, Myerstown, Pennsylvania, dairy on beef using Wagyu genetics is very much a part of the operation. He and his cousin Ben Light, a landscaper, are partners in Lightning Cattle Company.

They started with three Wagyu, two bulls and a heifer, purchased from the Empire State Farm dispersal, bred by the late Donald ‘Doc’ Sherwood near Binghamton, New York four years ago. The Lights collected semen off the bulls and flushed the heifer for embryos.

Not only did they begin incorporating the Wagyu genetics into the dairy-on-beef strategy at the 220-cow robotic dairy farm Adam purchased from Ralph Moyer in 2020, they made semen available to other dairies for first-dibs on purchasing offspring, and leased bulls to beef cow-calf herds.

Adam Light grew up on a diversified crop, poultry and beef farm. Working for nearby dairy farms as a youth, he developed an interest in dairying and began renting a dairy barn on a farm his father had purchased for cropland. When the time came to move the operation forward, the Moyer farm was on the market. Adam sold his smaller registered tiestall herd to another dairyman now renting his former barn, and purchased Moyer’s larger herd, farm, and robotic facility.

Next week, we’ll talk with Adam and his cousin Ben about Lightning Cattle and the beef-on-dairy business… and eventually about his robotic dairy transition.

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