Second, beef on dairy alters the composition of cattle by shifting dairy-origin calves that would traditionally enter the system as straight-bred dairy steers and heifers into a distinct beef-on-dairy category. This effectively creates a third class of animal in the beef production system alongside traditional straight-beef and straight-dairy breeds. Although we might argue that these are simply another crossbred type of cattle.

Simply reporting beef-on-dairy cattle as a separate category in existing USDA reports is not a straightforward solution to what we believe is a potential measurement and interpretation problem in these reports.

Fig. 1 offers an illustrative example of how beef on dairy may increase the number of cattle entering the beef supply chain. It plots annual dairy cow inventory and dairy replacement heifers as a percent of dairy cow inventories in the United States from 2006 to 2026. The data is from the January Cattle Inventory  report. Fig. 1 shows that from 2017 to 2026 the dairy cow herd has ranged from 9.34 million to 9.57 million head. At the same time, the ratio of dairy replacement heifers to dairy cows has declined from 50.7% in 2017 to 40.8% in 2026. While the dairy herd has been relatively stable during that time, the pool of heifers being held for dairy replacement has been shrinking.

While some of this is likely due to producers more efficiently targeting heifer semen to the right cows, one must also think some of this is due to the potential value of those non-replacement dairy calves, many of which are now beef-sired. The proliferation of information for better decision-making on dairies has led to fine-tuning the number of replacement heifers needed, especially given the cost of heifer development, and freeing up more beef-sired calves for the record-high calf market.

One industry report that the beef cattle sector pays close attention to, because of its implications for herd rebuilding, is the quarterly Cattle on Feed  (COF) report from USDA-NASS. In the quarterly COF, published at the beginning of each quarter, cattle-on-feed inventories are reported separately for steers and heifers, and the key statistic discussed is heifers on feed as a percent of total cattle on feed.

When heifer retention increases for the purpose of beef cow herd expansion, heifers represent a small share of total on-feed inventory. However, the reported number of heifers on feed does not distinguish between beef, dairy and beef-on-dairy heifers. Higher adoption of sexed semen for dairy replacement heifers, combined with incentives to use more beef semen on dairy cows, has the potential to result in more calves born from dairy cows being placed on feed. A good portion of these are likely heifers, which suggest it could also inflate heifers on feed as a percent of total cattle on feed. If this were occurring, it could mask early signs of beef cow herd rebuilding.

The January 2026 COF reported that heifers on feed totaled 4.435 million head, or 38.7% of total cattle on feed. To estimate the potential effects of beef-on-dairy and sexed-semen adoption, we subtract the estimated increase in heifers associated with increased adoption of both from total reported heifers on feed.

A key challenge is that assumptions about beef-on-dairy and sexed-semen adoption rates are hard to pin down. Our baseline assumes a 50/50 steer-heifer dairy calf crop with no sexed semen and no beef on dairy. The increase in heifers is calculated assuming 75% adoption of sexed semen for dairy replacement heifers and 25% adoption of sexed semen for beef-on-dairy steers.

Under these assumptions, we estimate that a little more than 1.5 million dairy heifers enter feedlots annually, compared to a little less than 940,000 under the baseline scenario. This implies an increase of approximately 600,000 heifers entering feedlots each year relative to the baseline. After applying this adjustment, the implied beef breed heifers-on-feed total for January 2026 is 4.186 million head, or 36.6% of total cattle on feed. Even after adjusting for potential beef-on-dairy heifers, it is still a relatively large number of beef breed heifers on feed and doesn’t really change drastically the implications about herd expansion.

For perspective, the estimated increase of roughly 600,000 heifers entering feedlots annually is large relative to recent changes in beef inventories. For example, the beef cow herd declined by about 1%, while beef heifer inventories increased by only about 41,000 head, suggesting these dynamics could meaningfully influence how cattle inventory data are interpreted.

Rather than focusing on any single assumption about adoption rates, Fig. 2 calculates the combinations of sexed semen use that would generate the same adjusted heifer share of total cattle on feed. The line in the figure represents combinations of adoption rates that produce a heifer share of approximately 38.7%, which matches the heifer share implied by the January 2026 Cattle on Feed  report. Points along the line yield the same implied heifer-on-feed percentage. Combinations above the line result in a larger adjusted heifer share, while combinations below the line result in a smaller share.

For example, if the industry adopts 70% sexed semen for dairy replacement heifers, then adoption of sexed semen for beef-on-dairy steers above approximately 42% would imply an upward adjustment in the heifer-on-feed percentage above 38.7%. Alternatively, adoption below approximately 42% would imply a heifer share below 38.7%.