Dairy heifer inventories to shrink further before rebounding in 2027
- ZISK
- Sep 5
- 1 min read
The U.S. dairy industry is facing a potential shortage of its most important resource – milk cows. The number of replacement heifers available to enter the dairy herd as milk producing cows has already fallen to a 20-year low. Based on new CoBank research, replacements could fall even further over the next two years before a recovery begins in 2027. These declining heifer inventories could limit growth in the milk supply, a looming concern for dairy processors with expansion plans underway. The U.S. is currently experiencing an historic $10 billion investment in new dairy processing facilities expected to come online through 2027.
The decline in dairy heifers over the last several years is closely tied to beef and dairy market dynamics. Tight cattle supplies and record high prices for beef calves prompted many dairy farmers to produce more calves destined for beef feedlots and fewer to milk barns. At the onset of this trend, raising dairy heifers to enter the milk cow herd was a money-losing proposition due to extremely low heifer values and high rearing costs. While the economics have shifted and the shortage of replacement dairy heifers has sent values soaring, replenishing the pipeline of heifers available to enter the milking herd is a three-plus year proposition.
Sept 1, 2025
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