This an industry that does not really care all that much about workers or farm animals. If it "works", there's little incentives for the industry to switch

They have to extract the semen in the first place too

You suggesting they go to town on a cow with a bad dragon?

First, states have ban on bestiality. Industry somewhat neutral at first, but then the industry start to want to artificially insemination. For several reasons. Farm animals can be resistant of their attempts to force them to mate and artificial insemination makes it harder for them to avoid. Animal farmers want to have fewer male farm animals since it's cheaper to kill them than to pay to raise them. Farmers also want to be able to better artificially select genes meaning more "productivity" (higher slaughter weight, more milk production, more egg production, etc.) even if at the expense of their health. The dairy industry especially wants this because they have to keep a cow pregnant constantly to produce milk

Process to collect semen for artificial insemination requires restraining farm animal and then forcibly jerking them off, electrically simulating, or similar. Process to inseminate requires restraining cow and then putting hand up their genitals to keep them pregnant.

No way to collect semen for artificial insemination without removing ban on bestiality since both ends of it break those law. So they lobby hard to add an exemption for themselves