U.S. milk production is setting records, but economists say the numbers may be hiding growing stress in the dairy industry. According to a report from the Farm Bureau, milk cow inventories are the highest they’ve been since the early 1990s, while the supply of replacement heifers has dropped to its lowest level in nearly 50 years. Strong beef prices have encouraged producers to keep cows longer and breed more beef-on-dairy calves, boosting short-term income but shrinking the future herd pipeline. At the same time, expanding global milk supplies are pushing prices down at home, even as U.S. cheese and butter exports reach record levels. Analysts warn today’s strong production could lead to tighter and more volatile milk markets ahead.
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