U.S. Dairy Herd Defies Expectations with Continued Growth Through 2025

# U.S. Dairy Herd Defies Expectations with Continued Growth Through 2025 The U.S. dairy herd continues to grow in 2025 despite industry predictions to the contrary, according to [Jacoby's latest market analysis](https://www.jacoby.com/market-report/u-s-dairy-herd-is-likely-to-continue-to-grow/). The expansion comes not from traditional heifer replacement, but through an unprecedented reduction in culling rates and extended productive lives for existing cows. **This article summarizes key findings from Jacoby's market report. Read the [full analysis at Jacoby.com](https://www.jacoby.com/market-report/u-s-dairy-herd-is-likely-to-continue-to-grow/).** --- ## The Numbers Behind the Growth The U.S. dairy herd reached **9.485 million head** by July 2025—159,000 head higher than July 2024. Over an 11-month period through mid-2025, producers added 122,000 cows to the national herd, with dairy cow numbers up 101,000 head through April 2025 compared to the start of 2024. What makes this growth remarkable is how it's being achieved: not through increased heifer replacements, but through dramatically reduced culling. ## Historic Reduction in Culling Rates According to [Jacoby's analysis](https://www.jacoby.com/market-report/u-s-dairy-herd-is-likely-to-continue-to-grow/), **602,200 fewer cows** have been sent to slaughter over the past 90 weeks compared to historical averages. Through mid-July 2025, dairy producers culled 1.38 million milk cows—310,000 fewer than the 2020-2023 average for the same period. The first 24 weeks of 2025 saw dairy cow slaughter running **7.7% behind 2024 pace** and **15.6% slower** than historic averages. This represents the lowest mid-July slaughter since 2008. ## The Retention Strategy Dairy producers are keeping cows longer and increasing the number of lactations per animal. Herd retention rates have shifted from around 67-68% to almost **71% in 2024**. With heifer supplies constrained and beef prices at attractive levels, farms are maximizing the productivity of their existing cows rather than replacing them. As [Jacoby analysts note](https://www.jacoby.com/learning-center/market-reports-overview/), this creates a paradox: "We've been on this narrative that the heifers aren't out there. The beef market is so attractive that, at some moment, it will be very difficult to grow this herd. Yet we've found a way to do it..." ## Key Constraints on Traditional Growth Several factors are limiting traditional herd expansion: - **Heifer Shortage**: Replacement heifer supplies remain constrained throughout 2025 - **High Beef Prices**: Strong beef markets create incentives to sell rather than retain - **Expansion Barriers**: New dairy construction faces challenges with permitting, financing, and animal acquisition Despite these headwinds, producers are adapting by extending the productive lives of their existing animals. ## Production and Efficiency Gains Milk production growth in 2025 is being driven by improved yields and component percentages rather than large herd increases. Butterfat percentages have climbed from 4.01% in March 2021 to 4.33% in March 2025, demonstrating significant improvements in milk composition. The USDA forecasts **230.0 billion pounds** of milk production in 2025 and **231.3 billion pounds** in 2026, with new cheese processing capacity coming online to absorb increased milk supplies. ## 2025 Outlook and Risk Factors [Jacoby's market report](https://www.jacoby.com/market-report/u-s-dairy-herd-is-likely-to-continue-to-grow/) suggests that if farm economics remain favorable, the herd is expected to continue slight growth through 2025 with culling rates similar to 2024. However, this retention strategy has limits. The market remains vulnerable to several risk factors: - **Margin Pressure**: Lower milk prices combined with rising feed costs - **Market Correction**: If economics deteriorate, "cow numbers could really decrease at a fairly rapid rate" as producers capitalize on high beef prices - **Biological Limits**: Extended lactations eventually lead to declining production and increased health challenges ## What This Means for Dairy Farmers The current herd growth trend demonstrates the dairy industry's adaptability and resilience. Producers are maximizing the value of existing assets when traditional expansion paths are constrained. **Key Takeaways:** 1. **Maximize Cow Longevity**: Focus on cow comfort, health protocols, and reproduction management to extend productive lives 2. **Monitor Economics Closely**: The current retention strategy works only if margins remain positive 3. **Plan for Flexibility**: Be prepared to adjust culling rates quickly if market conditions shift 4. **Improve Efficiency**: Continue investing in technologies and practices that boost per-cow production ## Looking Ahead The unprecedented cow retention driving current herd growth is a double-edged sword. While it allows for expansion without heavy heifer investment, it creates vulnerability if margins compress. Producers capitalizing on this strategy should maintain financial flexibility and be ready to adjust if economic conditions deteriorate. For detailed market analysis and regular updates on dairy industry trends, [visit Jacoby's Learning Center](https://www.jacoby.com/learning-center/market-reports-overview/) and subscribe to [The Milk Check podcast](https://www.jacoby.com/learning-center/podcasts-overview/). --- **Source:** This article summarizes analysis from Jacoby's market report "[U.S. Dairy Herd is Likely to Continue to Grow](https://www.jacoby.com/market-report/u-s-dairy-herd-is-likely-to-continue-to-grow/)." All data and insights are credited to Jacoby's dairy market analysts. **Additional Reading:** [Jacoby 2025 Dairy Outlook](https://www.jacoby.com/from-milk-to-market-2025-outlook/) [Jacoby Market Reports](https://www.jacoby.com/learning-center/market-reports-overview/) [The Milk Check Podcast](https://www.jacoby.com/learning-center/podcasts-overview/)