Limited supply and strong demand have brought about historic cattle prices.
“Whether it’s beef or dairy heifers, inventories are historically tight, and neither category shows any signs that prices will soften over the next two to three years. In fact, the price climb may not be done — although the price ascent would have different narratives,” says Corey Geiger, lead dairy economist at CoBank.
Beef heifers are currently being buoyed by historic beef prices.
“As a result, many beef heifers are still bypassing a career as a beef cow and headed straight to the feedlot as live cattle futures hover near $220 per cwt,” Geiger says. “At the same time, dairy heifers are being coveted by dairy farmers, too. The dairy heifer story has a longer storyline but the same ending tale of higher prices and tight inventories.”
A decade ago, dairy replacement values peaked at $2,120 per head in October 2014, according to data tracked in USDA’s Agricultural Prices program.
“In that era, record milk prices, not record beef prices, were driving dairy replacement values as mailbox milk prices climbed from $20 per cwt in 2013 to $24 per cwt the very next year,” Geiger says. “The improved margins to make milk put everyone in a growth-mode mindset, and dairy farmers scoured the countryside looking for replacements.”
The very next year, mailbox milk prices tumbled to a $17 average and never pushed past the $18 threshold from 2015 to 2021. That sent dairy heifer values into a freefall, Geiger explains, as gender-sorted semen and rising conception and fertility rates raised inventories.
“After peaking at $2,120 per head in October 2014, dairy heifers fell nearly $1,000 to settle at $1,140 by April 2019,” he says. “Not only was that far under the cost of raising a dairy heifer, but those animals were also worth more to feedlot operators for beef than they were valued as a milk cow.”
As a result, the beef-semen-on-dairy-cow movement took off as dairy farmers pivoted to making more beef-specific animals to capitalize on rising beef prices. That, in turn, reduced dairy replacement inventories.
It took nearly 10 years for dairy heifer prices to recover.
“In April 2024, values in USDA’s dataset recovered to $2,140 … the exact same price as October 2014,” Geiger says. “Unlike 2014, when mailbox milk prices rose to more than $24 per cwt, 2024 mailbox prices netted just $21.80. This time around, tight inventories, not record milk margins, drove the price adjustment. With inventories limited, values climbed even higher, reaching $2,660 by January 2025.”
That’s the same time USDA reported that dairy replacement numbers were 3.92 million head — 18% lower than 2018.
“This shortage caused dairy replacement prices to move even higher to the unforeseen threshold of $3,010 per head in July 2025 — a 164% jump from the April 2019 $1,140 figure,” Geiger says.
While those prices represent retrospective data, top dairy heifers in California and Minnesota auction barns have been bringing upward of $4,000 per head by midyear 2025, speaking further to the limited supply.
“Given these tight inventories and the $10 billion of new dairy plants set to come online through 2027, dairy replacement values will likely climb even higher by the time USDA releases its next quarterly data report in October,” Geiger says.
Source: FarmProgress.com / Fran O’Leary
