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
The bill to once again allow schools to offer whole milk and 2% milk will now go to President Trump for approval.
China’s pullback is hitting core U.S. commodities hard, reshaping export expectations for soybeans, cotton, grains, and livestock.
Fertilizer markets face uncertainty after President Trump raised the possibility of tariffs on Canadian imports, with analysts warning of supply and pricing risks. Josh Linville with StoneX provides a fertilizer industry outlook.
Regional differences indicate that family ownership is universal, but farm structure and commodity mix determine the extent to which these operations drive agricultural output.
Frigid winter weather and rapid temperature swings have cattle markets watching closely for livestock stress, as analysts say fluctuations pose the greatest risk.
A new study found that retaining the EPA’s half-RIN credit protects soybean demand, farm income, and crushing-sector strength while preserving biofuel market flexibility.

LATEST STORIES BY THIS AUTHOR:

Texas Ag Commissioner Sid Miller warns horse owners after EHV-1 cases linked to the Waco WPRA Finals. Horses linked to recent Waco events should be isolated and closely monitored, as early action is critical to stopping the spread of EHV-1.
One trader said the products entering the U.S. are primarily grind and trim, noting that the volume and type of beef, on its own, should not cause a major disruption. However, he says fund traders are reacting heavily to headlines rather than market realities.
Olivia Bury, AgriSafe Network Behavioral Health Coordinator, shares about AgriSafe Network’s resources created to support farmers and rural Americans.
Jael Cruikshank, the newly elected Western Region Vice President, shares her story on this week’s FFA Today.
Shaun Haney, host of RealAg Radio, provides the latest insight into the timing, expectations, and broader considerations of the potential aid package, despite increasing exports to China.
Farm legal expert Roger McEowen reviews the history of the Waters of the United States (WOTUS) rule and outlines how shifting definitions across multiple administrations have created regulatory confusion for landowners.