CoBank: Fewer replacement heifers could mean trouble for U.S. milk supplies

Co-Bank Lead Dairy Economist, Corey Geiger, joined us on Friday’s Market Day Report for a further look at the drop in replacement heifers and the trend’s longterm impact on dairy producers and cattle prices.

The U.S. dairy industry might be looking at a shortage of milk-producing cows. The number of replacement heifers is already at a 20-year low and could get even worse before things turn around, which economists with CoBank’s Knowledge Exchange forecast will rebound two years from now, in 2027.

Exploring the Drop in Replacement Heifer Numbers

Co-Bank Lead Dairy Economist, Corey Geiger, joined us on Friday’s Market Day Report for a further look. In his interview with RFD-TV’s own Tammi Arrender, Geiger discussed the reasons behind the drop in replacement heifers, what the decline in herd size means for the U.S. milk supply, and if he’s expecting a drop or growth in production.

“The U.S. dairy industry stands at a unique inflection point previously unseen in its modern-day history: Beef sales are contributing a larger portion to dairy farm profitability with each passing year,” wrote Geiger and his co-author, Abbi Prins, in the new report from CoBank’s Knowledge Exchange, Dairy Heifer Inventories to Shrink Further Before Rebounding in 2027. “This market dynamic has pushed dairy farmers to send more calves to beef feedlots and fewer to milk barns.”

Low Replacement Heifers = Long-Term Impact on Cattle Prices

Geiger also discussed the data’s impact on cattle prices, as the value has dramatically increased replacement heifer values, and whether they will remain elevated in the foreseeable future.

“To that end, this model predicts that dairy replacements will remain historically tight through 2026,” Geiger and Prins conclude. “To maintain cow numbers and the necessary milk production levels, dairy farmers will have to reduce dairy cow culling even further. This will be incredibly difficult given the existing pullback in culling over the previous two years.”

However, they also think the impact on the dairy herd could present a host of new problems for producers over the next few years as they try to match production goals with an older herd that will require support from emerging technology.

“This aging herd brings a unique set of management challenges as older dairy cows are more susceptible to fresh cow diseases, metabolic issues, and declining fertility rates,” the economists explained. “The good news is that genetics and health traits have improved over the past decade, and the modern dairy cow should be more up to the challenge.”

READ MORE: Dairy Heifer Inventories to Shrink Further Before Rebounding in 2027

Related Stories
While row crops are expected to see softer impacts, analysts say severe weather of this magnitude will not be as kind to cattle producers.
Dairy farmer and Discover Ag co-host Tara Vander Dussen joined us to discuss the Whole Milk for Healthy Kids Act, her experience at the signing, and what’s next for her family and farm.
Analysts say a Supreme Court decision on tariffs could reshape protein markets, strain U.S.-China trade, and force farmers to rethink global demand strategies.
Wayne Cockrell with the Texas and Southwestern Cattle Raisers Association joined us to discuss preparedness, producer awareness, and the industry’s response to New World screwworm concerns.
Corn and wheat exports remain a demand bright spot, while soybeans are transitioning into a more typical late-winter shipping slowdown.
Alan Bjerga with the National Milk Producers Federation joined us to review new policies and regulations supporting the dairy industry and what they mean for the year ahead.

LATEST STORIES BY THIS AUTHOR:

FarmHER Nikki Boxler, aka The Maple Farmer, blends tradition with innovation, tapping into a bold new future for maple syrup.
As the new year begins, both farmers and rural families are taking stock of their finances and planning ahead for 2026.
Trade uncertainty—especially regarding soybeans—continues to weigh on future outlooks, even as farm finances and land values remain resilient.
Roger McEowen with the Washburn University School of Law joined us to provide legal insight and context on these issues facing agriculture. Today, he discusses pesticide litigation.
Sen. Deb Fischer reintroduces the HAULS Act to update hours-of-service exemptions and definitions affecting livestock and agricultural haulers. She joins us on Market Day Report to share more about her proposed legislation.
Strong crush demand and rising ethanol production are pressuring feedstocks, as traders monitor storage risks and supply chain uncertainty and await the upcoming January WASDE report.