That is a somewhat common birth defect - by common I mean it probably happens every year in every state but I've never seen one in person.
It's all fluid, there is usually no recognizable brain tissue.  It is a genetic thing, more common in some Angus blood lines.  Calves are most often lost early (I see this one has no hair). 
Here is a link from a vet wiki: http://vetbook.org/wiki/cow/index.php?title=Neuropathic_hydrocephalus