By Ben Bennett, President, Australian Dairy Farmers

The Australian dairy industry stands to gain more than $550 million per year at a conservative estimate, thanks to a promising growth opportunity being pursued by industry leaders.

That opportunity comes from increased profit and yield through developing the dairy beef industry and expanding into premium markets.

It was the hot topic at Australian Dairy Farmers’ (ADF) recent industry breakfast at International Dairy Week (IDW), where Professor Jane Quinn from Charles Sturt University and Dairy Australia’s Andy Hancock shared their insights.

They proved surplus dairy calves are no longer an issue to be managed, but an asset with substantial economic potential.

For too long, male dairy calves have been undervalued, often sold at low prices as vealers.

However, the CalfWays Sustainable Dairy Calf Management Roadmap aims to change this by facilitating the development of opportunities for Australia’s surplus calves to enter commercial supply chains by 2035.

The shift is already happening, and with the right structures in place, dairy beef has the potential to significantly enhance farm profitability.

Rising international demand

One of the most compelling opportunities for Australian dairy beef lies in export demand from the United States, where dairy-sourced beef plays a crucial role in the production of ground beef and burger patties.

The US beef industry relies on lean beef trim from dairy cattle to mix with fattier cuts, producing a high-quality, consistent product for food service and retail markets.

Currently, Australia exports a significant volume of lean beef to the US, but much of it comes from grass-fed cattle.

With dairy beef offering similar lean characteristics and a predictable supply chain, there is a clear opportunity for Australian dairy farmers to tap into the well-established US demand for ground beef.

The US market has already embraced vertically integrated dairy beef supply chains, processing around 90,000 calves per year under structured feeding and finishing programs.

New Zealand also exports significant quantities of dairy cattle for beef consumption to the US.

These systems provide farmers with stable pricing and a guaranteed market – a model that Australia can replicate to secure long-term demand.

Strong margins, viability

The financial potential of dairy beef is large.

Research presented by Professor Quinn at IDW shows that integrating surplus dairy calves into beef production has the potential to deliver $550 million per year through increased profit and yield.

Currently, many surplus calves are sold at around $35 per head as vealers, but with proper finishing, they can be grown out to reach carcass weights of 300 kilograms or more, with market values ranging between $1500 and $1800 per head.

The numbers clearly illustrate that dairy beef is not just an ethical solution – it’s an economically viable one.

A key factor in this shift is the Meat Standards Australia (MSA) grading system, which has shown that well-finished Holstein and Jersey cattle can produce beef of comparable eating quality to traditional beef breeds.

Consumer sensory trials show that dairy beef, when raised with the right nutrition and growth pathways, performs well in terms of tenderness, juiciness, and flavour, making it a valuable addition to the beef supply chain.

At IDW, Professor Quinn said trials conducted in western Victoria and the Riverina had proved that Holstein cattle can achieve growth rates and carcass characteristics on par with traditional beef breeds when finished in feedlots.

This means that with the right investment in breeding, feeding, and processing, dairy beef can meet both domestic and export market standards.

Building the supply chain

To capitalise on this opportunity, a coordinated effort is needed across the supply chain.

Programs like CalfWays, which has engaged over 150 stakeholders including dairy and beef processors, Meat and Livestock Australia (MLA), and major retailers, are helping to build stronger connections between producers and buyers.

The long-term goal is to develop a structured, profitable dairy beef industry that provides stability for farmers while addressing broader sustainability and animal welfare concerns.

Lessons from international markets, particularly the vertically integrated model from the US, show that with the right partnerships and investment, dairy beef can become a valuable and predictable revenue stream for Australian farmers.

The future is dairy beef

The dairy beef industry is at a turning point. Demand is growing, margins are strong, and global markets – particularly in the US – are actively seeking supply.

This is no longer a theoretical discussion; dairy beef is already proving to be a workable and profitable possibility for farmers willing to invest in structured growth programs.

At IDW breakfast it was clear: the future of dairy beef in Australia is bright.

By treating surplus calves as a business opportunity rather than a byproduct, farmers can unlock significant value, increase resilience, and contribute to a more sustainable and profitable dairy industry.

Now is the time to act. With the right partnerships, market connections, and investment in quality production, Australian dairy farmers can take full advantage of this growing sector.