Dairy Herd Sizes Have Reached 34-Year High
Beef-on-dairy calf sales have enabled farmers to keep more cows despite lower milk prices.
Updated on Oct. 5, 2026 in Organic Food
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The U.S. national dairy herd has reached 9.71 million cows, the largest size reported since 1992. Farmers are retaining lower-producing cows to breed valuable beef-cross calves, helping them maintain profitability amid lower milk prices.
Why it matters
Beef cattle herds are currently at multi-decade lows, driving up demand for crossbred calves. This additional income stream allows dairy farms to remain operational and continue overproducing milk despite market fluctuations.
Beef-on-dairy calves sell for $1,200 to $1,500 per head, with beef sales now accounting for up to 15% of total revenue on many dairy farms. Meanwhile, replacement heifer prices have surged to over $3,000 per head.
The players
World Dairy Expo
This is an international organization that hosts an annual event for the dairy industry to discuss market trends and technology.
The details
Dairy farmers are strategically holding onto cows that would otherwise be culled to capitalize on the high demand for beef-cross calves. While this strategy bolsters revenue, it has resulted in a surplus of milk that keeps national Class III milk prices at $16.04 per hundredweight, with futures for October 2026 projected even lower at $14.94.
Timeline
1992: This year marked the previous peak for the national dairy herd size.
May 2026: The culling rate for dairy cows began to rise.
September 2026: Class III milk prices reached $16.04 per hundredweight.
October 2026: Industry analysts at the World Dairy Expo assessed the calf market.
2027: Global buyers expect U.S. dairy supply to remain plentiful.
Culture Shift
The current dairy industry expansion marks a significant return to the record-high herd levels last seen during the 1992 peak. This shift reflects a move toward diversified revenue streams as farmers prioritize crossbred beef calf production over pure milk volume.
While the surplus of milk helps keep national dairy prices competitive, it may lead to long-term volatility in regional supply chains for dairy products. Consumers may continue to see stable pricing for dairy goods as exporters move excess domestic supply into markets like Indonesia.
The takeaway
The rise in beef-on-dairy calf production has provided a vital financial safety net for farmers navigating low milk prices. As this trend continues, the industry is balancing a delicate surplus that relies heavily on both domestic production levels and successful export growth.
Further reading
Learn more about the latest developments in the Organic Food sector.
Source note: This article includes information reported by ESSFeed.
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