Key Points
- Just behind feed and labor, the cost of raising a dairy heifer is the third-highest expense on dairy farms.
- In the past 20 years, dairy rearing costs have climbed by more than 50% to over $2,000 per head. Less than a decade ago, dairy heifers sold for a tidy profit but rearing costs today mean they sell at a loss.
- To better manage their on-farm heifer inventories and investment, dairy farmers have turned to a more profitable opportunity: Using beef semen on a portion of their dairy herd to produce and sell beef-on-dairy calves.
- Due to the shift to beef-on-dairy, dairy replacements expected to enter the milking herd have shrunk by almost 15%, or 709,100 head, in the past six years to reach a 20-year low.
- The reduced number of heifers eligible to enter the milking herd – plus their higher purchase price today of $1,890, an eight-year high – could limit the upside on expanding U.S. milk production.
(T1, D1)
