By Jamie Martin
The US dairy industry is facing a potential shortage of milk cows as replacement heifer inventories have fallen to their lowest levels in two decades. According to CoBank research, numbers are expected to decline even further before recovering in 2027. The timing raises concern since more than $10 billion in dairy processing investments are expected to require higher milk volumes by that year.
The shortage stems from strong beef markets and changing farm economics. Tight cattle supplies and record beef prices made it more profitable for dairy farmers to breed beef calves instead of raising dairy replacements. While the value of heifers has now climbed sharply, restoring supplies is a slow process, taking over three years from birth to milk production.
CoBank projects inventories will shrink by about 800,000 head in the next two years. Current heifer prices are setting records and could climb well above $3,000 each.
Artificial insemination data highlights this shift. Between 2017 and 2020, beef semen sales in the US nearly tripled. By 2024, dairy farmers purchased nearly 8 million of the 9.7 million units sold, showing how widespread the move toward beef calves has become.
To address the shortage, many farmers are now buying gender-sorted semen to produce more dairy heifer calves. Even so, it will take years before the new calves are ready to join the milking herd.
“The U.S. dairy industry stands at a unique inflection point,” said Corey Geiger, lead dairy economist with CoBank. “Beef sales are contributing a larger share of dairy farm profitability with each passing year and the market for beef-on-dairy calves shows no signs of slowing down. In order to maintain sufficient dairy cow numbers and milk production in the near term, dairy farmers will need to put the brakes on dairy cow culling. And that could be difficult given how much they’ve already pulled back over the past two years.”
The heifer shortage underscores the delicate balance between beef and dairy markets and its impact on the future of milk production.
Photo Credit: gettyimages-ahavelaar
Categories: National