Milk production in South Africa comes under pressure periodically as a result of market forces, but can dairy producers effectively respond to these market forces? During these periods a large number of dairy cows are slaughtered and their numbers decrease. As the average productive life of dairy cows is 2.3 lactations, their numbers cannot be increased easily if market forces change. This paper demonstrates that the national dairy herd can only increase by 1 – 3% per life cycle through normal population growth. Short-term financial issues influencing the milk price or input costs can thus have a drastic and long-term effect on the population dynamics of the national herd. The low surplus numbers imply that selection pressure from the female side is almost non-existent. This raises the question as to whether South Africa breeds of dairy cattle are adapted to local conditions especially as large quantities of semen are imported. The low participation of only 24% in official milk recording is of concern as the performance of cows in milk recording is substantially better, viz. the difference between cows in milk recording and those that are not, as far as the productive herd life is concerned, is an improvement of 43%, and in milk production 81%. World-wide agricultural production is increasingly practiced in a systems relationship. The South African dairy industry must realize how interdependent they are and begins to think in terms of a systems approach.