Source: CoBank
The U.S. dairy industry is at a crossroads as beef sales increasingly drive farm profitability, pushing farmers to breed cows with beef semen rather than dairy semen. This shift has caused dairy replacement heifer numbers to hit a 20-year low, even as the country invests $10 billion in dairy processing facilities through 2027 that will require more milk output. Data from the National Association of Animal Breeders shows beef semen sales to dairies soared from 5 million units in 2020 to 7.9 million in 2024, while conventional dairy semen use collapsed.
The result: fewer heifers available for herd replacements in 2025 and 2026, driving replacement prices to record highs of $3,000–$4,000 per head. Farmers are responding by culling fewer cows to sustain herd size, but this creates challenges with older animals. Relief may come by 2027 as increased gender-sorted semen use could add 285,000 heifers, though shortages will remain tight until then.