Dairy investment to reverse replacement heifer decline, bank predicts<\/p>\n
Published 7:00 am Monday, September 8, 2025<\/p>\n
Major investments in dairy processing capacity are expected to reverse a longtime decline in replacement heifer numbers in about two years, according to a major Western agricultural lender.<\/p>\n
As dairy farmers have shifted to breeding their cows with beef genetics to capitalize on strong beef prices, the number of replacement heifers for dairy production is still falling, according to CoBank, a major Farm Credit System lender that serves the West.<\/p>\n
However, due to a dairy processing expansion fueled by $10 billion in manufacturing investments, the number of replacement heifers is expected to grow by more than 285,000 in 2027, according to CoBank\u2019s recent report.<\/p>\n
With replacement heifer numbers currently at a 20-year low \u2014 and expected to drop by roughly 350,000 this year and 450,000 in 2026 \u2014 the dairy industry faces \u201ca unique inflection point previously unseen in its modern-day history,\u201d the report said.<\/p>\n
Up until now, more dairy farmers have been artificially inseminating their cows to produce \u201cbeef-on-dairy calves\u201d destined for meat production, rather than using dairy genetics to produce replacement heifers for the milk barn, according to CoBank.<\/p>\n
\u201cDairy farmers\u2019 skyrocketing purchases of beef semen translated to too few dairy herd replacements,\u201d the report said.<\/p>\n
Recently, though, dairy processors have been building or expanding their facilities, investing an estimated $10 billion between 2023 and 2026, according to an analysis by the National Milk Producers Federation.<\/p>\n
Since those plants will require more milk and components, particularly butterfat and protein, it\u2019s likely to create demand for replacement heifers at a time when inventories are short, the CoBank report said.<\/p>\n
\u201cThis will likely cause dairy replacement values to hold at or climb further past prevailing record prices,\u201d the report said. \u201cIn the meantime, dairy farmers will continue to pull back on dairy cow culling to sustain herd sizes for financial viability.\u201d<\/p>\n
The dynamic has already prompted dairy farmers to \u201cbegin hoarding cows\u201d by sending fewer to slaughter, but this \u201chistoric pullback cannot be sustained long term,\u201d indicating that replacement heifer numbers will need to rebound, according to CoBank.<\/p>\n
The report\u2019s forecasted drop in replacement heifer numbers in 2025 and 2026 is partly based on recent semen sales, which indicate that beef genetics will continue outpacing dairy genetics until the trend swings the other direction in 2027.<\/p>\n
Given that dairy farmers will probably continue culling fewer cows, the industry is likely to encounter \u201ca unique set of management challenges,\u201d since older animals are more prone to disease, metabolic problems and lower fertility, according to CoBank.<\/p>\n
\u201cThe 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,\u201d the report said.<\/p>\n
The $10 billion investment in dairy processing points to an \u201cincredibly bright\u201d future for the industry, despite recent \u201cturbulence\u201d with trade and labor issues, according to the National Milk Producers Federation.<\/p>\n
To buttress that positive outlook, the organization cited record U.S. dairy product consumption, driven by demand for cheese, butter and yogurt, which has climbed more than 20% over the past five decades.<\/p>\n
\u201cThe processing growth is creating new outlets for dairy farm production, a tide that lifts all boats across the industry,\u201d according to NMPF.<\/p>\n","protected":false},"excerpt":{"rendered":"Dairy investment to reverse replacement heifer decline, bank predicts Published 7:00 am Monday, September 8, 2025 Major investments…\n","protected":false},"author":2,"featured_media":142119,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[50],"tags":[200,79],"class_list":["post-142118","post","type-post","status-publish","format-standard","has-post-thumbnail","category-genetics","tag-genetics","tag-science"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/142118","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=142118"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/142118\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/142119"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=142118"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=142118"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=142118"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}