At $1,970 each, replacement prices have shot up $530 on average since the first of the year, according to data published in USDA's Agricultural Prices. That is the highest value since July of 2008 when replacement prices were $10 short of $2,000. Those 2008 prices also coincided with a two-year run when mailbox prices hit a then record $19.16 per hundredweight followed by $18.40 in 2007 and 2008. Everyone who was milking cows in that era knows what happened next - the bottom fell out of the milk and replacement market.
Bringing it back to the present, the $1,970 value represents a 37 percent jump from this January's $1,440 per head value. From April to July, replacement values climbed 9 percent ($1,810 to $1,970).
Replacements were bringing top dollar in Colorado at $2,200 this July followed closely by Wisconsin and Arizona at $2,100. On the low end were New York and Ohio at $1,800 each.
As for replacement numbers across the country, USDA's Cattle publication reported in late July that there were 3.9 million head 500 pounds and over. This number was down 200,000 head from July 2012 (no 2013 numbers were collected because of sequestration). That calculates out to a ratio of 42.1 heifers for every 100 milk cows. In 2012, that ratio was 44.5.
This market valuation is taking place at a time when cull cow prices are at historic highs. The July issue of Agricultural Prices reported that cull cows were bringing a record $1.13 per pound or $113 per hundredweight.
Even so, milk prices are trumping beef prices in the minds of dairy farmers. Through June, dairy cow culling was down 176,000 head when compared to January to June of 2013.
