Last fall, after more than a year of low dairy cow cull rates, U.S. dairy producers started to rebuild the milk herd. So far this year, dairy producers have held cull rates low enough to add milk cows at the fastest rate since 2008, says Sarina Sharp, analyst with the Daily Dairy Report.
“While the heifer shortage has remained acute this year, today’s herd is the largest in four years, but it’s also growing older,” Sharp says. “To fill every stall, producers are holding on to cows for an extra lactation or keeping cows whose milk yields are lower than desired because not enough heifers exist to replace less-productive livestock.”
In late-September 2023, U.S. dairy producers began to rein in cull rates, sending fewer animals to packing plants. At first, the lighter slaughter volumes were not substantial enough to offset the ongoing heifer shortage, and the U.S. dairy herd declined. The herd continued to shrink until January 2024, but as producers continued to hold onto lower-end cows, the decline in U.S. milk cow numbers ended, and the national dairy herd began growing again last autumn, Sharp says.
“Now the trade is watching closely for any sign that cull rates are climbing, which would foster slower growth in milk cow counts” she says.
For the first time since March, USDA’s weekly slaughter volumes regularly topped 50,000 head in July, and in the last two weeks of the month, producers sent more cows to packing plants than they did a year earlier. At first glance, rising slaughter volumes appear to indicate the situation could be changing, but a deeper dive shows otherwise, according to Sharp.
“The increases in cull rates can easily be explained by seasonality, mathematics and weather,” she says. “First, cull rates typically jump in July following spring flush. And while U.S. dairy producers are now milking 146,000 more cows than a year ago, slaughter volumes can top last year’s very low counts without boosting culling percentages.”
Over the past two decades, she explains, dairy producers have typically culled about 32% of the milk cow herd each year. Last year, the cull rate dropped to 29.6%. This year, with 146,000 more cows, producers could continue to cull less than 30% of the herd and still send nearly 1,000 more cows to slaughter each week.
In addition, while slaughter in late July was unusually high in the Midwest, a derecho that slammed into the Central Plains was likely a major driver of the increase. USDA data showed that slaughter in the Midwest jumped 2,400 head above the prior year in the final week of July.
“Powerful winds damaged facilities and forced some producers to send cows to the packer while they repaired barns and milk parlors,” Sharp says. “Eventually, health and longevity will necessitate a return to historical cull rates, but for now, economics suggest slaughter volumes will remain near year-ago levels and expansion will continue, leading to strong milk production.”
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