A method that predicts the genetic composition and inbreeding (F) of the future dairy cow population using information on the current cow population, semen use and progeny test bulls is described. This is combined with information on genetic merit of bulls to compare bull selection methods that minimise F and maximise breeding value for profit (called APR in Australia). The genetic composition of the future cow population of Australian Holstein-Friesian (HF) and Jersey up to 6 years into the future was predicted. F in Australian HF and Jersey breeds is likely to increase by about 0.002 and 0.003 per year between 2002 and 2008, respectively. A comparison of bull selection methods showed that a method that selects the best bull from all available bulls for each current or future cow, based on its calf's APR minus F depression, is better than bull selection methods based on APR alone, APR adjusted for mean F of prospective progeny after random mating and mean APR adjusted for the relationship between the selected bulls. This method reduced F of prospective progeny by about a third to a half compared to the other methods when bulls are mated to current and future cows that will be available 5 to 6 years from now. The method also reduced the relationship between the bulls selected to nearly the same extent as the method that is aimed at maximising genetic gain adjusted for the relationship between bulls. The method achieves this because cows with different pedigree exist in the population and the method selects relatively unrelated bulls to mate to these different cows. Selecting the best bull for each current or future cow so that the calf's genetic merit minus F depression is maximised can slow the rate of increase in F in the population.