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
Larger operations maintain cost advantages, while softer equipment sales suggest producers are pacing machinery upgrades amid tighter margins.
Transportation access, legal disputes, and fertilizer freight costs will directly influence input pricing and grain movement in 2026.
Analysts say that while low-income households are facing financial pressures, other middle- and higher-income consumers are helping fill the gap for retail beef demand.
Despite China’s sharp drop in grain purchases this year, new USDA export data this week shows that even some buying activity from the trade giant still moves the markets.
Corn and wheat exports remain supportive, but weaker soybean demand — especially from China — continues to pressure oilseed markets.
Tim and Sharyn Abbott of the Music City Celebration Sale recap the weekend’s premier auction, which drew top dairy breeders and buyers to Nashville again this year from across North America.

LATEST STORIES BY THIS AUTHOR:

Tyson’s capacity cuts weaken local basis, tighten kill space, and heighten dependence on imports, signaling more volatility for producers.
One of the most iconic symbols of the holiday season is the Christmas tree. This year at RFD-TV! We are celebrating the tree farmers across Rural America that grow these iconic treasures. Here’s a soundtrack for you to enjoy this year as you gather to decorate yours — it’s a few of our favorite songs about Christmas trees!
Former Market Day Report anchor Janet Adkison was inducted into the National Association of Farm Broadcasting Hall of Fame, recognizing over 20 years of service sharing stories that impact Rural America.
Jake Charleston, with Specialty Risk Insurance, joins us now for an industry update and advice for cattle producers as they consider options for managing the risks of a murky market.
The National Milk Producers Federation will launch a new advocacy campaign to secure a final vote, urging House lawmakers to approve the bill as soon as they return from the Thanksgiving recess.
AFBF Vice President of Public Policy and Economic Analysis, Dr. John Newton, explains the factors contributing to the growing financial strain in the ag sector and the urgent need for swift economic support.