Higher prices for dairy products could be coming, and falling sales of semen from dairy bulls are telling the story.

The market for dairy semen sales has tanked to a 17-year low, with sales volumes dropping by 6.7% last year, according to National Association of Animal Breeders data. It’s because American dairy farmers don’t want as many milking cows — they’re buying semen from beef cattle and raising more animals for meat instead, because it’s more profitable. Right now, dairies are struggling to make money as everything from feed prices to labor and energy costs skyrocket.

Smaller dairy cow herds means less milk output, and for consumers, that could signal higher butter and cheese prices could be on the horizon. The U.S. Department of Agriculture just last week raised price forecasts for cheese, butter, nonfat dry milk and whey on strong demand and dwindling production expectations. Inflation is already rising at its fastest pace since 1982, with the cost of food and gasoline at the forefront.

“The number of dairy heifers should be reducing” as farmers breed more beef cows, said Matt Gould, editor of the Dairy Market Analyst. 

Source : Bloomberg March 16th 2022 by Elizabeth Elkin