OMAHA, Neb, June 23, 2026. Dairy producers are growing herd size while keeping cows productive longer, a financial strategy shaped by strong beef cattle markets, fewer replacement needs and rising value per animal, according to benchmark findings by Farm Credit Services of America (FCSAmerica). As the industry celebrates National Dairy Month, these insights highlight how producers are adapting and positioning their operations for long-term success. The insights are drawn from FCSAmerica’s proprietary dairy benchmarking program, which reflects detailed financial and production data across a broad portfolio of operations representing 144 dairy sites in a multi-state region from Minnesota to Texas and from Michigan to California.
Key Trends Emerging from the Data
Dairy herd sizes are growing.
Looking at the All Regions / All Breeds data, the herd size story is a gradual and steady increase.
The average cow herd increased from 6,147 head in 2021 to 9,181 head in 2025, with consistent year-over-year growth: 7,766 (2022), 7,947 (2023), and 8,768 (2024). This indicates a sustained expansion trend. The data suggests producers are steadily scaling operations over time, likely driven by long-term efficiency goals, economies of scale, and investments made over multiple years rather than a single-year shift.
At the same time, herd turnover rates have trended downward, declining from 37.6% in 2021 to 32.8% in 2025. This reinforces the idea that producers are focusing more on maximizing the productive life of existing animals rather than rapidly replacing them.
With calves generating significant revenue shortly after birth, producers have a stronger incentive to keep cows in the herd for additional lactation cycles, capturing more value per animal and reducing the need for frequent herd replacement. “Herd turnover rate is declining as operations retain cows in the herd for another lactation, as those females will have another cross-bred calf that is currently worth $1,500/hd or more on day 1,” said Tim Van Hofwegen, agribusiness vice president for FCSAmerica. “Dairy producers are not looking at profitability through milk production alone, but rather a holistic approach in consideration of strong beef cattle markets and thinking about each cow’s total lifetime value.”
Strong beef cattle markets have elevated the importance of “other income,” particularly beef cattle sales, as a meaningful contributor to total revenue. At the same time, those same favorable beef prices are helping reduce herd replacement costs, as higher cull cow values offset the cost of raising or acquiring replacement heifers. Together, these trends highlight how interconnected dairy and beef markets are shaping both herd management decisions and overall financial performance, with producers optimizing not just for milk production, but for total animal value across the lifecycle. The industry is not only adapting to market dynamics but actively leveraging them, balancing milk production with total animal value to strengthen financial performance and position operations for long-term resilience in an evolving dairy landscape.
The benchmark reports are developed to provide FCSAmerica’s dairy finance experts with a comprehensive view of performance trends and industry dynamics, which are then translated into meaningful conversations with customers. By bringing this analysis into customer conversations, producers better understand how their operation compares, identify strengths and areas of opportunity, and make more informed, confident management decisions. The result is practical, real-world context that supports stronger performance and long-term success in a changing dairy environment.
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