Welcome to the Bullvine Podcast, your number one source for dairy industry insights and
straight talk.
I'm Bella and alongside me is the one and only Douglas.
Today we're diving into a topic that's keeping dairy farmers up at night, the historic heifer
shortage facing U.S. dairy and what it means for the future of your milking herd.
Thanks Bella.
And folks, this isn't just another market fluctuation we're talking about here.
We're looking at heifer inventories at a 47-year low according to the latest USDA data, springing
heifer prices soaring past $4,000 and 70% of dairies now breeding to beef bulls.
This perfect storm has created what I'm calling a breed now, regret later scenario that could
reshape American dairy for decades.
That's right Douglas.
Today we'll break down exactly how we got here, what's happening on farms across different
regions and most importantly, practical strategies to navigate this crisis.
We'll cover everything from beef cross breeding economics to the unexpected impact of HPAI
on fertility and even dive into how policy decisions are affecting your bottom line.
So grab your coffee, pull up a chair in the milking parlor and let's dive into the trenches
of America's dairy heifer crisis.
Douglas, let's start with the raw numbers here.
Just how bad is this heifer shortage we're facing?
Bella, I don't use the word crisis lightly, but that's exactly what we're facing.
According to the USDA's January report, we're down to just 3.914 million heifers nationwide.
That's a drop of nearly 1% in a single year, taking us back to 1978 levels.
1978?
That's before many of our listeners were even born.
And what about those springer prices you mentioned?
They're through the roof.
We're seeing springing heifers, those pregnant heifers ready to calve, fetching over $4,000
a head in what I can only describe as desperate bidding wars.
I was at the Lancaster auction last month and watched a group of 10 average quality
springers go for $4,300 each.
The buyer told me it was still cheaper than going out of business.
It seems like we're caught in a vicious cycle here.
When I was researching for today's episode, I came across a quote from a Wisconsin dairy
farmer named Sarah Klecker that really stuck with me.
She said they're burning through generations of genetics to pay the feed bill.
Can you explain what she meant by that?
That's exactly right, Bella.
What Sarah was describing is the fundamental dilemma facing dairy farmers today.
Many producers are breeding their dairy cows to beef bulls, particularly Angus, because
those beef cross calves can sell for over $1,200 each.
That's quick cash to pay bills today, but it means fewer dairy replacement heifers for
tomorrow.
So essentially, farmers are trading their future milking herds for immediate cash flow.
That's the harsh reality.
Sarah's situation is the perfect example.
She told me she sold 80% of her calves to Angus bulls last year.
It helped her clear some debts, but then she got, in her words, sucker punched when she
needed to buy replacements at $3,800 a head.
She described it as feeling like trading my pickup for a bicycle.
How widespread is this beef cross breeding practice?
The latest data shows about 70% of US dairies are now playing what I call this high stakes
breeding roulette.
And it's not just small operations.
We're seeing this across all farm sizes.
So we've got historic low heifer numbers, sky high replacement costs, and most farms
are still breeding to beef.
This sounds unsustainable.
That's exactly the point, Bella.
This isn't just a shortage.
It's a high stakes reshuffle of an entire industry's future.
The big question is, will farmers pivot fast enough to avoid milking herd collapse, or
will the next decade's dairy aisles run dry?
Let's dig deeper into this beef dairy breeding trend, Douglas.
I know our listeners have been bombarded with headlines about beef cross calves outselling
used cars, but what's the real story behind what's happening in the breeding barn?
Let me cut through all the noise and break this down real simple.
There are three main breeding strategies happening on dairy farms today.
First, about 63% of larger operations are using sex semen on their top performing cows.
Think the top 25% of the herd.
That's smart because it gives you more heifer calves from your best genetics.
For listeners who might not be familiar, sexed semen technology allows farmers to significantly
increase the odds of getting female calves up to 90% chance versus the normal 50-50 split,
right?
Exactly right, Bella.
Then for the middle and lower tier cows, farmers are using beef bulls, mostly Angus or Wagyu,
which brings us to strategy number two.
These beef cross calves can bring $300 to $1,000 more per calf than a straight Holstein.
That math is pretty compelling when margins are tight.
And what's the third strategy?
The third piece is what I call retention roulette.
Nationwide, we're only keeping about 28% of heifers compared to 52% a decade ago.
That's like betting half your poker chips every hand.
It might work out, but it's risky long term.
Those numbers are alarming.
So what happens when a farm needs replacements and their heifer pipeline is running dry?
That's the million dollar question, or should I say the $4,000 per springer question.
Some farms are getting creative.
Take Ohio's HeiferTech service.
For $75 per calf, they'll genomic test your heifers with 92% accuracy.
That means you know by week two if that calf has a future as a productive dairy cow or
if it's better destined for the feedlot.
Harry, that's fascinating.
$75 to potentially save thousands in raising a less productive animal.
What other solutions are farms finding?
Another approach comes from Kansas, where feedlots are raising heifers at about two
and a half pounds per day for just $2.75 daily.
That's significantly cheaper than raising them on farm for many producers.
So the successful operations are using a three-pronged approach.
Sexed semen for the top cows, beef bulls for the rest, and early genomic testing to make
smarter decisions about which calves to keep.
That's right, Bella.
I call it the don't be a statistic checklist.
Test early with genomics and cull hard.
Tear your herd.
Sexed semen for your MVPs, beef bulls for the bench warmers.
And most importantly, watch your rear view mirror.
If your retention drops below 30%, you're flirting with a cliff edge in terms of future
replacements.
Douglas, while researching for this episode, I was surprised to learn that highly pathogenic
avian influenza, HPAI, is playing a significant role in this heifer crisis.
Most of our listeners probably think of it as a poultry disease, but it's affecting
cattle too, right?
That's right, Bella.
This isn't just a chicken problem anymore.
HPAI has been moonlighting as a heifer wrecking ball, and the damage is significant.
Texas A&M researchers tracked heifers that survived last year's outbreak, and what they
found is truly concerning.
What did their research show?
Even the heifers that recovered produced 18% less milk in their first lactation.
18%.
Think about that.
If you're expecting 24,000 pounds of milk from a first lactation animal, you're losing
over 4,000 pounds of production.
At current milk prices, that's real money walking out the door.
That's a huge impact.
Are there other effects besides milk production?
It gets worse.
Dr. Emily Torres, who led the study, found that 9% of exposed heifers had ovarian scarring.
She described them as walking infertility time bombs.
This virus doesn't just affect current production.
It compromises future reproductive potential.
Has this affected some regions more than others?
Absolutely.
HPAI didn't play fair across the country.
California took the biggest hit with a 15% drop in conception rates.
Their heifers also reached puberty 22 days later than normal.
That's three extra weeks of feed costs before they can even be bred.
And what about other regions?
The Midwest fared a bit better with only, and I use that term loosely, 8% fewer pregnancies
and heifers showing up 14 days late to breeding.
The Southwest split the difference with 12% fewer conceptions and 18-day delays.
And around 19% more cows were culled in that region due to reproductive issues.
What can farmers do to mitigate these HPAI impacts?
First, test.
Don't guess.
Screen every replacement candidate for viral residues.
It costs about $12 per test, certainly cheaper than raising a compromised heifer for two
years.
Second, make tough culling decisions.
If testing shows ovarian scarring, that animal should probably head to the burger line.
Harsh?
Maybe.
Smart?
Absolutely.
And I imagine farms need to adjust their breeding programs to account for these lower conception
rates.
Exactly right.
If HPAI clipped your conception rates, you need to bump your breeding targets by 10-15%.
It's like buying insurance.
You're protecting your future milking herd by breeding more animals today.
This crisis isn't hitting all regions equally.
Is it, Douglas?
Let's take our listeners on a road trip across America's dairy regions to understand the
different challenges they're facing.
You're right, Bella.
Where your farm is located could mean the difference between bankruptcy and boom times
these days.
Let's start with California, where water costs more than heifers.
And that's not a joke.
I've heard California's drought conditions have been particularly challenging for dairy.
What's happening there?
Picture this.
Central Valley 2025.
Dust swirls around for sale signs on dried up alfalfa fields.
California dairies aren't just battling HPAI.
They're fighting water bills of $1,200 per acre foot, which is up 30% since 2023.
Those water costs are staggering.
How is this affecting their dairy production?
The numbers tell the story.
Milk production is down 6.8% last year.
They've culled about 62,000 cows, thanks in part to bird flu.
And here's what's really telling.
Some operations are so desperate, they're hauling in Idaho heifers at $3,500 per head.
They're importing heifers from Idaho?
That seems extreme.
It is, but it shows how desperate the situation has become.
I spoke to a manager near Fresno who swapped 200 homegrown heifers for 150 Idaho imports.
He told me it was cheaper than drilling another well.
But here's the kicker.
Those Idaho girls aren't bred for 110 degree heat.
He described it as running a bovine sauna experiment.
Why would farms stay in California with those challenges?
Good question.
Some point to tax breaks, others to nostalgia or loyalty to the Stockton cheese plant.
But the exodus is real and it's accelerating.
Let's head east to Texas.
I understand they're taking a completely different approach.
Texas dairies are expanding like they've got a death wish, or 7.5% herd growth in 2024,
depending on how you look at it.
Their approach has three key components.
First, they're heavily investing in Jersey Crosses, about 40% of new calves, because Holsteen
struggled in that August heat.
And what are they doing with their beef cross calves?
That's the second part of their strategy.
About 72% of their beef cross calves head south to Mexico.
But here's where it gets risky.
They're ignoring Mexico's 25% tariff threat on $480 million of beef exports.
That sounds incredibly risky.
What happens if Mexico implements those tariffs?
Texas dairies could bleed $120 million overnight if Mexico pulls that trigger.
When I asked an Amarillo producer about this risk, he drawled, we're betting on AMLO getting
voted out.
That's quite a gamble with your farm's future.
And finally, what about the traditional dairy heartland, the Midwest?
The Midwest is running what I call geriatric cows and company.
They've got an average of 3.2 lactations per cow.
Translation, your grandma's favorite milk cow is still pumping out butter fat, but older
cows mean slower rebounds when you need to grow your herd.
How are Midwest farms adapting to the heifer shortage?
They're getting creative with co-ops.
Dairy Herd Minnesota, that's H-E-A-R-D, is a cooperative sharing 500 springers across 12 farms, almost like a bovine timeshare.
One Wisconsin participant described it to me as like Tinder for heifers.
Farm A needs 50 heifers now for expansion.
Farm B has 60 extras after culling.
And the co-op brokers the swap for $35 per day per head.
So your zip code really does dictate your dairy destiny these days.
The Midwest is playing survival mode.
Texas is gambling on geopolitics and the Midwest is inventing cow collectives.
Exactly right, Bella.
Wherever you are, one truth holds.
Adapt or get milk dry.
Douglas, let's talk about something that I think keeps dairy geneticists up at night.
The long-term genetic implications of all this beef crossbreeding.
Are we breeding ourselves into a corner?
You've hit on what I call the genetic elephant in the parlor, the uncomfortable truth nobody wants to discuss.
While beef cross calves are fattening wallets now, our dairy genetics are backsliding in a way that could take decades to recover from.
How significant is this genetic impact?
Let me put it in perspective.
Before 2020, we were boosting milk, expected progeny differences or EPDs by about 87 pounds per year.
Now, we've slowed to a pathetic 43 pounds per year.
That's like swapping your GPS for a compass.
Sure, you'll still get somewhere, but progress is painfully slow.
What does that mean for future milk production?
Purdue University economists have crunched these numbers and they're sobering.
Every 10% drop in replacements slashes U.S. milk output by 2.3 billion pounds in five years.
Their projections show 2030 yields tanking to 26,900 pounds per cow.
That's 4% below where we should be.
At today's prices, that's $920 lost annually per 100 cows.
That's fascinating.
Are there technological solutions being developed as well?
Absolutely.
UC Davis has what I call their CRISPR crew.
They're editing mastitis resistance into 200 embryos.
The early results are impressive.
62% fewer somatic cells and trial heifers.
That's a game changer for utter health and milk quality.
I know some listeners might be wondering, isn't gene editing controversial or even illegal for livestock?
That's a common misconception.
The USDA actually greenlit gene editing for research purposes in 2023.
Commercial use is probably still a few years out.
Maybe by 2027 if regulatory approval stays on track and public acceptance grows.
What can individual farmers do today to protect their herd's genetic future?
I recommend a three-part genetic survival strategy.
First, audit your EBVs and sound the alarms if your herd's milk gains lag behind 50 pounds per year.
Second, diversify your breeding.
Allocate at least 30% of cows to dairy-only matings, even your B-tier animals.
And third, consider joining a gene bank through your breed association.
Their freezer might save your operation in 2030.
So we're at a genetic crossroads.
Chase quick beef bucks or invest in the udders that built this industry.
Exactly, Bella.
And remember this truth.
Once those milk genes fade, they're hell to resurrect.
The decisions farmers make in their breeding barns today will echo for generations.
Let's shift gears and talk about how government policies and international trade are affecting this heifer crisis.
Douglas, what should our listeners know about federal programs that might help?
The biggest development is the USDA Heifer Insurance Pilot Program,
probably the closest thing to a government hug dairy farmers will ever get.
Here's how it works.
It covers 60% of rearing costs if springer prices tank below $2,800 per head, what I call the oh crap threshold.
That sounds helpful.
Are there any catches or requirements?
Of course there are.
This is the government we're talking about.
The big one is that you need to maintain at least 30% heifer retention.
No beef bonanzas allowed if you want this safety net.
So far in 2025, about 8,100 farms, roughly 12% of U.S. dairies, have signed up.
Why should farmers consider this program?
Imagine this scenario.
Feed prices spike, springer prices crash to $2,500, and suddenly Uncle Sam cuts you a check for $1,680 per heifer.
That could be the difference between folding and fighting another day.
Imagine if a farm is at 29% retention instead of the required 30%.
Tough luck, partner.
Rules are rules.
That's why it's critical to audit those heifer counts like your subsidy depends on them, because it does.
Let's talk international.
How are trade relationships affecting dairy beef markets?
We've got $1.5 billion in dairy beef trade hanging by a thread due to two major threats.
Mexico is considering a 25% tariff on U.S. dairy beef, which would devastate about $480 million in exports.
This would hit Texas and Western operations particularly hard.
And what about our northern neighbor, Canada?
Canada has introduced hemoglobin tests on cross-breds that could lead to 40% carcass rejections at the border.
This primarily affects upper Midwest operations that ship culls north.
What's being done to address these trade threats?
I spoke with dairy lobbyist Mitch Davis, yes, the guy who always wears those fancy boots in D.C.,
and he told me they're begging for a dual-use loophole in the trade agreements.
His exact words were, no deal?
Say goodbye to 10 cents per pound on your culls.
Translation, if Canada's new test sticks, your beef cross calves could get turned back at the border like they have expired passports.
What steps should farmers take regarding these policy and trade issues?
First, run your retention numbers.
If you're at 28%, work to reach 30% before the USDA deadline to qualify for that insurance program.
Second, diversify your exports.
If you've got contacts in Vietnam or other markets, now's the time to develop those relationships.
And third, get involved with your state dairy group's advocacy efforts.
Those Zoom calls might seem boring, but your participation matters.
So policy isn't just for politicians anymore.
It has real-world impacts on dairy farm profitability.
Absolutely.
Whether it's hedging bets with USDA insurance or dodging tariff shrapnel,
your engagement with policy this season will echo for years.
Douglas, I'd love to shift to some success stories.
Our listeners need to hear how some farms are turning this crisis into opportunity.
Do you have any examples of dairies that have navigated these challenges successfully?
I thought you'd never ask.
Let me tell you about Klecker Dairy in Wisconsin.
Last year, they needed 120 springers but came up 60 short.
Instead of panicking, they implemented four strategies that turned their situation around.
What was their first move?
They started with what I call a sext semen smackdown.
They targeted their top 30 percent of cows with sext semen
and achieved 90 percent heifer calves versus the 45 percent you'd get with conventional semen.
Sarah Klecker told me directly, why waste beef bowls on your MVPs?
That simple change dramatically increased their heifer crop from their best genetics.
What else did they implement?
Their second strategy was what I call the genomic guillotine.
They spent $75 per heifer on genomic testing
but saved $3,200 per heifer by culling low EPD calves at just two weeks of age.
Sarah didn't mince words about this approach.
We nixed 30 percent of calves early.
Ruthless? Yes. Profitable? Hell, yes.
That's a compelling return on investment.
What was their third approach?
They still used beef bowls but very strategically.
They bred only their bottom 50 percent of cows to Angus,
generating about $82,000 in premium calf sales, enough to buy 24 springers outright.
And finally, they implemented heifer timesharing,
leasing 60 springers at $35 per day through a Wisconsin dairy cooperative.
Sarah described it as like Uber for heifers. Why own when you can rent?
And how successful were these strategies in turning things around?
The numbers tell the story.
Before implementing these changes, their herd renewal rate was 50 percent,
meaning they were only replacing half of the cows they needed to.
After these strategies, they reached 95 percent renewal.
Their cost per springer dropped from $3,800 to $2,964.
And as Sarah joked, her stress-induced bald spots went from 3 to 0.
What lessons can other farms take from Klecker's experience?
They didn't reinvent the wheel. They just spun it more brilliantly.
First, triage your herd. Sexed semen on elites, beef bowls on the rest.
Second, test early. Cull hard. Genomics pay for themselves with just three calves.
And third, share the pain through co-ops and leasing arrangements.
It sounds like a balanced approach that maintains genetic progress while managing cash flow.
Exactly right. Klecker found that middle path, not going all in on beef cross-breeding,
but also not ignoring its economic benefits.
They're playing both the short and long game simultaneously.
Let's talk dollars and cents, Douglas.
With today's milk prices and input costs, what does the economic picture look like
for dairy farmers trying to rebuild their heifer numbers?
Bella, this is what I call the milk math meltdown.
Let me lay out the cold hard truth for 2025.
The USDA is forecasting an all-milk price of $23.05 per hundredweight.
That's up 50 cents from last year, which sounds good on paper.
But there's more to the story than just milk price, right?
Absolutely. While milk is up 50 cents, corn is projected at $4.85 per bush.
That's up 74 cents. Diesel is at $4.10 per gallon, up 90 cents.
And the average heifer cost has increased $440 to $3,200 per head.
So for a 100-cow dairy, that extra 50 cents per hundredweight in milk price
would mean about $5,200 more income annually.
But the increased costs in feed, fuel, and replacements would far outweigh that gain.
Exactly. That extra 50 cents feels like monopoly money when you subtract the real costs.
For a 100-cow herd, you're looking at about $11,100 more in feed costs,
$6,300 more in fuel. And if you're replacing 20 cows, that's an extra $8,800 in heifer costs.
Those numbers don't paint a pretty picture. How are farmers managing to break even?
I spoke with Wisconsin dairy farmer Jed Collins, who dropped a real jaw dropper.
He told me, at $23 milk, I need 85% pregnancies just to break even.
We're stuck at 78%. Something's got to give.
So at 78% pregnancy rate, he's getting 78 replacements, but he needs 85 to maintain his herd.
That's a seven heifer deficit.
Exactly. And at $3,200 per springer, that's a $22,400 hole in his operation.
When I suggested he just get better at breeding, he reminded me about the HPAI-infected heifers
and $4 diesel affecting his reproductive program visits.
What advice do you have for farmers trying to navigate these economic challenges?
First, run your specific break-even calculation.
Multiply your milk price by 100 weight, then subtract feed, fuel, and labor costs.
That tells you exactly where you stand.
Second, lock in input prices where possible.
Contract next year's corn at $4.85 before it hits $5.
And third, if you've got extra heifers, hold on to them.
Your neighbor will likely pay triple for them in six months.
It sounds like the math is rigged against dairy farmers right now.
But strategic management can still create a path forward.
The math is tough, no doubt about it, but smart operators are finding ways to squeeze more efficiency from their operations.
It's not about working harder, it's about working smarter with the resources you have.
Next, as we start to wrap up our discussion, Douglas, let's focus on practical next steps.
What should dairy farmers be doing right now to position themselves for success despite these challenges?
Great question, Bella.
Let's break this down into immediate actions and long-game strategies.
For immediate fire drills, start with EPD audits.
If you're not axing the bottom 25% of heifers based on genomics, you're essentially wasting $3,200 per head on future culls.
Even if those heifers are already born, wouldn't it be better to raise them anyway?
That's exactly the thinking that gets farms in trouble.
Yes, it feels wasteful to sell a perfectly healthy calf,
but it's better to sell them as bottle calves now than lose $10,000 raising them into underperforming cows.
Ruthless beats bankrupt every time.
What's the next immediate step farms should take?
Lock in springer contracts now. June's coming, and with it, $4,000 plus per head panic prices.
Today's ouch price is tomorrow's bargain.
We're already seeing 18% pre-summer price spikes at Midwest auctions.
And don't forget about that USDA heifer insurance program you mentioned earlier.
Excellent point, Bella.
March 31st is the deadline for the USDA insurance program.
That 60% cost coverage of springers crash.
It's essentially free money if you meet the requirements and enroll in time.
What about longer-term strategies? How should farms be positioning themselves for 2026 and beyond?
This is where visionary farmers will separate themselves from the pack.
First, consider CRISPR embryos.
UC Davis is editing mastitis resistance into embryos that cost about $2,500 per dose.
That might sound expensive, but it's cheaper than raising four-dud heifers only to cull them for utter health issues.
What about advocacy and policy engagement?
Absolutely critical. California producers are currently begging for HPAI disaster relief.
There's $120 million in federal aid hanging in limbo.
Your state could be next.
Even if you hate making phone calls, find a way to engage with policy discussions.
Don't complain when Canada slaps tariffs on your culls if you weren't willing to make your voice heard.
And what about breeding decisions for the coming year?
If beef cross-breeding dominated 85% of your herd last year, flip at least 15% back to dairy bulls this year.
Yes, you'll leave some immediate money on the table, but you're building a life raft for your future herd.
So the action plan is cull low EBV heifers immediately, secure Springer contracts before summer price spikes,
sign up for USDA insurance by the deadline, consider investing in advanced genetics like CRISPR embryos,
engage with policy advocacy, and shift at least 15% of breeding back to dairy.
That's the playbook, Bella. The road ahead has plenty of potholes,
but farms that follow this map have a fighting chance not just to survive, but to thrive through this crisis.
As we come to the end of today's episode, Douglas, what final thoughts do you have for our listeners about this historic heifer crisis?
Bella, America's dairy industry isn't just at a crossroads. It's balancing on a razor's edge.
The numbers tell the story. 3.914 million heifers nationwide, $4,000 Springers, 18% milk loss from HPAI, and weakening genetic progress.
What got us here won't get us there. It seems farmers have two distinct paths forward.
That's right. Path A is doubling down on beef cross-breeding, cashing those $1,200 checks, and hoping the industry somehow sorts itself out.
Path B is playing the long game, reserving 25% of your cows for dairy's future,
lobbying like your subsidies depend on it, and investing in advanced genomics and emerging technologies.
This isn't just about surviving 2025, is it? It's about whether there's a dairy industry left in 2035.
Exactly, Bella. The clock is ticking, the milk tank is draining, and the world is watching.
Will American dairy fade into beef history or fight for its future?
I'm not selling sunshine here. It's going to be tough. Feed costs will bite, tariffs will sting.
But somewhere between today's chaos and tomorrow's empty parlors, there's a chance to rewrite the rules.
What's your final call to action for our listeners?
Grab your breeding charts, genomic reports, and pick up the phone to call your representatives.
The next generation of dairy doesn't need heroes. It needs fighters who will plant trees knowing they may never taste the fruit.
Your legacy starts now. Act like it.
That brings us to the end of this episode of the Bull Vine Podcast.
We've covered the U.S. dairy heifer crisis from every angle, from regional challenges to genetic concerns,
from policy impacts to success stories of farms navigating these troubled waters.
Thank you for joining us today. If you found this information valuable, please share it with other dairy producers who might benefit.
And remember to subscribe to the Bull Vine Podcast wherever you get your podcasts.
For the Bull Vine Podcast, I'm Bella alongside Douglas.
Until next time, keep those milkers moving and those heifers growing. The future of dairy depends on it.