According to the USDA’s most current Cattle report, the number of dairy heifers available to replace older cows leaving the US dairy herd has decreased by over 15% over the previous six years, hitting a 20-year low. This reduction may impede any major increase in domestic milk output during the next several years. The growing cost of raising dairy heifer calves has far outpaced gains in heifer values in recent years, prompting dairy farmers to lower their heifer replacement inventories, mostly by breeding more dairy heifers and cows to beef bulls.
In recent years, most farms have lost money raising dairy heifers, with expenditures ranging from $600 to $900 per animal. To better manage on-farm heifer inventories, dairy producers have begun to use beef semen on a section of their dairy herd, reducing the number of replacement heifers while also generating extra cash from beef sales.
The disparity between raising expenses and selling value has resulted in a lengthy and steady fall in replacement heifers in recent years. While some variation in the population of replacement heifers is unavoidable due to market and economic pressures, an adequate inventory is vital to the continuation of U.S. milk supply and the industry’s capacity to grow.
The sharp decline in heifer supplies remained mostly ignored until lately, when dairy producers sought to purchase now-scarce replacements. As a consequence, dairy replacement costs have risen to an eight-year high, with USDA statistics and auction market estimates ranging from $1,890 to $2,800 per cow. Given the scarcity of replacements, these elevated prices are likely to remain in place for the foreseeable future.
