Persistent low milk prices seen in late 2025 and early 2026 are also dampening producer confidence, Sharp said. These depressed prices — especially during winter months — make producers more cautious about committing capital to significant expansion projects, which typically require a clear multi-year return on investment before growers feel comfortable intensifying production.

At the same time, elevated beef prices are pulling economic attention away from herd retention and expansion. With beef markets historically strong, some dairy producers are considering sending older or less productive cows to beef packers rather than maintaining them in the milking string, a dynamic that could offset any broader herd growth.

Industry data support this outlook. Dairy cull cow slaughter rates were among the lowest seen in nearly 20 years during parts of 2024 and 2025, indicating producers have held onto cows longer in recent cycles — but high beef market returns and tight replacement heifer supplies are likely to keep herd growth constrained.