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Ruminants can eat things that humans cannot eat or should not eat. Bacteria in the ruminant stomach can bio-hydrogenate the unsaturated oils in their feed: https://news.ycombinator.com/item?id=38437204

Dairy cows are an efficient means of converting calories into a form that humans can use.

Thanks for the youtube channel link.

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It is still less efficient that growing food humans can use directly

It depends. Cattle grazing allows for use of land that would be otherwise unsuitable for agriculture. On the other hand, for land that would be suitable for agriculture, you're right that you'll get more output calories per area without having cows involved.

Well maybe - but what percentage of a typical "grass fed" cow's calories are from the feedlot they spend the last N months of their lives in (where they are fattened up)? If humans eating plant derived food is 5x more efficient that using it to raise meat is (from memory this is low), then for your argument to carry weight, we'd want > 80%. How common is that?

Cowspiracy might answer some of your questions

If you grow food for humans you always produce some waste that can be eaten by animals. The levels of animal husbandry you can sustain with that water are of course an order of magnitude or two lower than what we have today

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