Margins Improve, but Not Enough to Spur Milk Production Growth

dairy cows feeding

Report Snapshot

Milk production started the year with a steeper-than-expected decline in January.

Margins are improving with lower feed costs, and new plants under construction are looking for milk supply. However, high expansion costs, expensive replacement heifers, and enticing beef-on-dairy cross revenues continue to hold back production growth at the national level.

The number of milk cows in the U.S. fell by 28,000 head in January compared with December. Cow numbers increased slightly from January to February by 10,000 head but remained 89,000 head below last year. Through mid-March, dairy producers sent nearly 100,000 fewer cows to slaughter in 2024 than in the same period last year, but even that was not enough to stem the tide. Producers wanting to maintain or increase their herd are left with the option of holding on to older cows for longer or buying $2,500+ replacements.

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