U.S. dairy replacement heifer supplies are projected to shrink even further in 2026 before beginning to rebound in 2027, according to a new report from CoBank’s Knowledge Exchange. The number of heifers available to enter the milking herd has fallen to the lowest level since 1978, as strong financial incentives prompt dairy farmers to produce calves destined for the beef supply rather than milk production. CoBank’s modeling indicates that dairy replacements entering the milking herd between last year and this year are shrinking by a combined 796,000 head, followed by a rebound of 360,200 head in 2027 and 2028. With replacements in short supply, producers are retaining adult dairy cows that would have typically been culled, contributing to the overall increase in the U.S. dairy herd, while heifer prices have surged well over $3,000 per head. The shift is driven by record beef cattle prices amid a 75-year low in the U.S. beef herd, with 82.7% of all U.S. beef semen units purchased by dairy operations in 2025.
Dairy replacement heifer supply shrinking supports beef cattle prices as dairy farmers produce calves for beef.