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
Corn growers are turning to ethanol, E15 expansion, and export markets to help absorb record supplies and stabilize prices. Farm leaders discuss low-carbon ethanol demand, flex-fuel vehicle challenges, input costs, and the role of USMCA as producers look for market relief in the year ahead.
The Surface Transportation Board rejects the proposed Norfolk Southern–Union Pacific merger, prompting concerns from agricultural shippers about rail consolidation, service reliability, and higher transportation costs.
Livestock strength is carrying the farm economy, while crop margins remain tight and increasingly dependent on risk management and financial discipline.
Strong balance sheets still matter, but liquidity, planning, and lender relationships are critical as ag credit tightens, according to analysis from AgAmerica Lending.
Protein-driven dairy growth is boosting beef supply potential, creating an opening to support rural jobs and ground beef availability.
New Resource Makes It Easier for People to Access Data on Rural Development funded Projects in Rural Communities
U.S. agriculture entered the week with mixed signals as weather, logistics, and markets shaped early-year decisions. Here is a regional breakdown of domestic crop and livestock production for the week of Monday, Jan. 19, 2026.
While short-term volatility remains a risk, softer ocean freight rates in 2026 could improve export margins.
Trade volatility and shifting export destinations increase marketing risk for producers heading into 2026.