If the body continuously produces new sperm, how is there room for it?
Your testes are a sort of waiting room where sperm hang out, and if ejaculation does not occur, they eventually die, just like red blood cells (or any of your body's cells). Once cells in your body die, they are broken down, and your body uses the components and nutrients to create new cells. 

So it's a continual cycle of replacement and death.

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