Dairy Industry Is Steadily Growing Herds, More Value Per Cow

Farm Credit Services of America released their dairy benchmark insights this summer, showing the national herd is growing while turnover rates have moved lower. FCSAmerica noted the average cow herd increased from 6,147 in 2021 to 9,181 head in 2025, with consistent year-over-year growth. Tim Van Hofwegen with FCSAmerica noted that growing herd is driving milk production higher nationwide, putting pressures on milk prices and milk margins

“And on the flip side, producers are generally just breeding for dairy replacements for what they need for their herds," said Van Hofwegen. "So, we're seeing tighter and tighter supplies of dairy heifer replacements in the market and that's driving up the price of those animals because there's just less of them out there. Prior to this beef-on-dairy revolution, a significant revenue stream for dairymen was to raise excess heifers and sell them as replacements to other farms. But Now because of the value of the beef-on-dairy, they're choosing to raise beef on dairy calves instead of excess dairy heifers and there just aren't any out there right now.”

Which he pointed out is pushing replacement heifer prices very high.

Time To Take A Look At Risk

Van Hofwegen said as producers look to the back half of 2026 and even further down the road, it may be time to revisit how risk is managed.

“Milk markets are volatile and cyclical, and so can beef markets be," Van Hofwegen noted. "And we have, the industry has the opportunity to use some risk management tools like DRP, like LGM, like LRP, and other risk management strategies that can really take some of the volatility out of this. And so I think it's really incumbent on producers these days to understand that we're, especially on the beef side, we're at some all-time highs here. Like it's time to take a little risk off the table.”

Click Here to check out FCSAmerica’s benchmark findings.