A Historic Split
A tale of two very different eras is unfolding in the dairy industry, and the years themselves tell the story.
The nation must look back to 1978 to find a smaller pool of milk replacement heifers than exists in 2026. Nearly five decades later, the pipeline of future dairy cows has thinned. Record high beef prices are a key driver. Many dairy producers are breeding more cows to beef genetics instead of raising replacement heifers, chasing stronger short term returns from the beef market.
At the same time, milk production in 2026 is reaching levels last seen in 1993. Farmers are culling fewer cows and keeping more animals in the milking herd, pushing total output higher and creating the appearance of strength.
“U.S. milk production is setting records, but those volumes are sending increasingly misleading signals about the health of the dairy sector,” American Farm Bureau Federation economist Daniel Munch said last month in a market report. For more, read this Market Intel report: https://www.fb.org/market-intel/record-milk-production-shrinking-herd-pipeline
From 1978 to 2026 and from 1993 to 2026, the numbers reveal an industry balancing today’s opportunity against tomorrow’s supply.
