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Texas Dairy Producers Offset Lower Milk Prices with Higher Calf Prices
AgriLife estimates dairy industry will rely more on beef-on-dairy calf sales as milk prices decline.
Published on Feb. 26, 2026
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Texas dairy producers are facing lower milk prices, but are offsetting the decline by benefiting from higher beef prices and increased sales of beef-on-dairy calves. According to Texas A&M AgriLife, the beef-on-dairy breeding program is now as much or more of the dairy industry's business as milk marketing, with calf prices rising from $600 per head in 2024 to as high as $1,500 per head currently for Holstein/Angus cross calves.
Why it matters
The growth in beef-on-dairy calf sales is helping the dairy industry fill supply gaps within the beef industry amid historically tight cattle supplies. However, the dairy industry in Texas is also seeing continued consolidation, with the number of dairy operations decreasing even as the total number of dairy cows increases.
The details
Recent data from CattleFax indicates 3.22 million beef-on-dairy animals were sold in 2024, up significantly from only 50,000 head sold 10 years prior. This shift is helping dairy producers offset the decline in milk prices. At the same time, Texas lost 10 dairies in 2024 and another 10 in 2025, going from 294 to 274 operations, even as the number of dairy cows increased from 675,000 to 705,000 head.
- In 2024, beef-on-dairy calf prices were around $600 per head.
- In 2024, 3.22 million beef-on-dairy animals were sold.
- In the past 2 years (2024-2025), Texas lost 20 dairy operations, going from 294 to 274.
The players
Texas A&M AgriLife
A research and extension agency that provides agricultural expertise and information to the state of Texas.
CattleFax
A market research and analysis firm focused on the beef industry.
The takeaway
The Texas dairy industry is adapting to lower milk prices by increasingly relying on revenue from beef-on-dairy calf sales, which have seen a dramatic increase in value. This shift is helping offset the decline in milk prices, but the industry is also consolidating with fewer overall dairy operations even as cow numbers rise.
