Economics of delayed replacement when cow performance is seasonal

An optimal dairy cow culling and replacement model was developed; it included the option to delay entering heifers into the herd after cows were culled. The objective was to investigate whether leaving a slot temporarily vacant, to enter a heifer at a more favorable time of the year, could be economically advantageous when cow performance is seasonal. The goal of the optimization was therefore to maximize net return per slot per year. The model consisted of 3 modules: 1) a bioeconomic module to enter and calculate cow performance data and prices, 2) a replacement policy module based on dynamic programming to calculate optimal culling decisions for individual cows and when to enter heifers, and 3) a herd performance module based on Markov chains to calculate summary results for the herd. Results for the optimal culling policy under typical conditions in Florida showed that immediate replacement was economically advantageous throughout the year. However, for a nonoptimal culling policy, cows culled in May, June, and July would not be replaced by heifers until August. Realistic increases in seasonality or heifer prices, or lower milk prices, showed economic advantages of delayed over immediate replacement for both culling policies. The maximum advantage of delayed replacement of 486 price scenarios was 88 US dollars per slot per year; cows that left the herd in the early summer and spring were not replaced by heifers until the late summer. Delayed replacement was economically advantageous when fixed costs and net returns per slot were low and seasonality was high, which is the case for a portion of Florida dairy producers.     

Economic trade-offs between genetic improvement and longevity in dairy cattle

Genetic improvement in sires used for artificial insemination (AI) is increasing faster compared with a decade ago. The genetic merit of replacement heifers is also increasing faster and the genetic lag with older cows in the herd increases. This may trigger greater cow culling to capture this genetic improvement. On the other hand, lower culling rates are often viewed favorably because the costs and environmental effects of maintaining herd size are generally lower. Thus, there is an economic trade-off between genetic improvement and longevity in dairy cattle. The objective of this study was to investigate the principles, literature, and magnitude of these trade-offs. Data from the Council on Dairy Cattle Breeding show that the estimated breeding value of the trait productive life has increased for 50 yr but the actual time cows spend in the herd has not increased. The average annual herd cull rate remains at approximately 36% and cow longevity is approximately 59 mo. The annual increase in average estimated breeding value of the economic index lifetime net merit of Holstein sires is accelerating from $40/yr when the sire entered AI around 2002 to $171/yr for sires that entered AI around 2012. The expectation is therefore that heifers born in 2015 are approximately $50 more profitable per lactation than heifers born in 2014. Asset replacement theory shows that assets should be replaced sooner when the challenging asset is technically improved. Few studies have investigated the direct effects of genetic improvement on optimal cull rates. A 35-yr-old study found that the economically optimal cull rates were in the range of 25 to 27%, compared with the lowest possible involuntary cull rate of 20%. Only a small effect was observed of using the best surviving dams to generate the replacement heifer calves. Genetic improvement from sires had little effect on the optimal cull rate. Another study that optimized culling decisions for individual cows also showed that the effect of changes in genetic improvement of milk revenue minus feed cost on herd longevity was relatively small. Reduced involuntary cull rates improved profitability, but also increased optimal voluntary culling. Finally, an economically optimal culling model with prices from 2015 confirmed that optimal annual cull rates were insensitive to heifer prices and therefore insensitive to genetic improvement in heifers. In conclusion, genetic improvement is important but does not warrant short cow longevity. Economic cow longevity continues to depends more on cow depreciation than on accelerated genetic improvements in heifers. This is confirmed by old and new studies.     

Influence of Production and Prices on Optimum Culling Rates and Annualized Net Revenue

Dynamic programming was used to make optimum insemination and culling decisions for a dairy enterprise. Monthly costs and revenues for cows were calculated from milk and fat yields, calf values, feed costs, veterinary costs, housing and equipment costs, and interest. Cows were described in the dynamic programming model by lactation number, month in lactation, milk production during the present and previous lactations, and time of conception. The model considered variation in milk yield, replacement heifer costs, carcass values, involuntary culling, genetic improvement, conception rates, semen costs, and interest. Prices and parameters were chosen to represent the Holstein population in the US. Optimum average yearly culling rate was about 25% (optimum average herd life was 47.8 mo) and the yearly annuity of net revenue for a replacement heifer over a 15-yr planning horizon was $443 in the base situation. Various average mature equivalent yields, replacement heifer prices, milk prices, and feed prices were used in a sensitivity analysis. The yearly annuity of net revenue was sensitive to changes in all these parameters. Milk yield, milk prices, and feed prices had major effects on yearly annuity. Optimum culling decisions were sensitive to changes in replacement heifer prices. Average mature equivalent milk yield, milk price, and feed price had small effects on culling.     

Characterizing biosecurity, health, and culling during dairy herd expansions

Our objectives were to investigate strategies for biosecurity, expansion, and culling for expanding dairy herds in the Upper Midwest. Eighteen dairies in Iowa and Wisconsin were visited, and dairy managers and veterinarians were interviewed to characterize five biosecurity practices, herd culling practices, vaccines administered, and ensuing disease status for the herds. The majority of herds that were interviewed failed to employ comprehensive biosecurity programs for incoming cattle. Nearly 60% of herds obtained cattle from sources for which it was difficult to document genetic backgrounds and health histories, fewer than half required health testing for incoming cattle, and approximately 50% quarantined new cattle on arrival. Despite high rates of vaccination for bovine viral diarrhea, all herd owners and managers indicated that herd biosecurity was compromised as a result of expansion. Half of the interviewed herds indicated that bovine viral diarrhea and papillomatous digital dermatitis were notable disease problems. Herds that obtained cattle with unknown backgrounds and health status experienced the largest number of diseases. Before expansion, the most frequently cited reasons for culling were reproductively unsound; low milk production; mastitis, poor udder health, and high SCC; during expansion, the strategic decision to cull cows for low milk production was used less often. In addition, the stochastic simulation model, DairyORACLE, was used to evaluate economic outcomes for several expansion alternatives. Five model scenarios studied were: base scenario (herd size was maintained) and four expansion scenarios--all paired combinations of heifer quality (high, low) and voluntary culling (implemented, not implemented). Culling for low milk production yielded an additional $23.29 annually (6-yr annuity) per cow, but on the basis of purchased replacements, no voluntary culling was most profitable. Purchasing high versus low quality replacement heifers for expansions returned an additional $113.54 annually ($681.24 total net present value) per heifer purchased. Many opportunities exist to improve cattle-related factors for dairy herd expansions, including the use of comprehensive biosecurity programs, realistic planning and budgeting for cattle purchases, and cost effective purchase and culling practices.     

A stochastic animal life cycle simulation model for a whole dairy farm system model: Assessing the value of combined heifer and lactating dairy cow reproductive management programs

This analysis introduces a stochastic herd simulation model and evaluates the estimated reproductive and economic performance of combinations of reproductive management programs for both heifers and lactating cows. The model simulates the growth, reproductive performance, production, and culling for individual animals and integrates individual animal outcomes to represent herd dynamics daily. The model has an extensible structure, allowing for future modification and expansion, and has been integrated into the Ruminant Farm Systems model, a holistic dairy farm simulation model. The herd simulation model was used to compare outcomes of 10 reproductive management scenarios based on common practices on US farms with combinations of estrous detection (ED) and artificial insemination (AI), synchronized estrous detection (synch-ED) and AI, timed AI (TAI, 5-d CIDR-Synch) programs for heifers; and ED, a combination of ED and TAI (ED-TAI, Presynch-Ovsynch), and TAI (Double-Ovsynch) with or without ED during the reinsemination period for lactating cows. The simulation was run for a 1,000-cow (milking and dry) herd for 7 yr, and we used the outcomes from the final year to evaluate results. The model accounted for incomes from milk, sold calves, and culled heifers and cows, as well as costs from breeding, AI, semen, pregnancy diagnosis, and calf, heifer, and cow feed. We found that the interaction between heifer and lactating dairy cow reproductive management programs influences herd economic performance primarily due to heifer rearing costs and replacement heifer supply. The greatest net return (NR) was achieved when combining heifer TAI and cow TAI without ED during the reinsemination period, whereas the lowest NR was obtained when combining heifer synch-ED with cow ED.     

Associations between nondietary factors and dairy herd performance

Forty-seven dairy herds (approximately 3,129 lactating cows) from northeast of Spain that were offering exactly the same lactating ration were surveyed to determine the effect of nondietary factors on herd performance. The survey collected information on the profile of the owners (their future intentions, the number of workers, and time devoted to the enterprise), information regarding the animals (reproductive performance, incidence of pathology, culling rate, etc.), information on the facilities (number of feeders, waters, stalls, cleanliness, etc.) and information on management practices (numbers of daily milkings, feed deliveries, feed push-ups, cleaning frequency, etc.). In addition, the chemical quality of drinking water from each dairy enterprise was determined. Also, amount of feed delivered to each herd, daily total milk production, and milk quality were obtained for each herd for a period of 8 mo before the fulfillment of the survey. Mortality rate of calves tended to be lesser in herds that weaned progressively than in those that weaned abruptly. Age at first calving was negatively correlated with level of milk production (mainly due to the type of heifer rearing system used). Culling rate tended to be lower in herds that used a close-up ration than in those that did not. Using gloves and paper towels (instead of cloth towels) tended to reduce the somatic cell count in milk. Concentration of calcium in the drinking water tended to be negatively correlated with the number of days open and with the proportion of cows culled due to infertility problems. Despite that the 47 herds fed the same ration and shared a similar genetic base, average milk production per cow ranged from 20.6 to 33.8 kg/d. A positive relationship (r = 0.57) between the number of stalls per cow and milk production was found. The most important nondietary factors that affected milk production in these dairy herds were age at first calving, presence or absence of feed refusals, number of free stalls per lactating cow, and whether feed was pushed up in the feed bunk. These factors accounted for more than 50% of the observed variation, not attributable to the diet, in milk yield.     

Economic and genetic performance of various combinations of in vitro-produced embryo transfers and artificial insemination in a dairy herd

The objective of this study was to find the optimal proportions of pregnancies from an in vitro-produced embryo transfer (IVP-ET) system and artificial insemination (AI) so that profitability is maximized over a range of prices for embryos and surplus dairy heifer calves. An existing stochastic, dynamic dairy model with genetic merits of 12 traits was adapted for scenarios where 0 to 100% of the eligible females in the herd were impregnated, in increments of 10%, using IVP-ET (ET0 to ET100, 11 scenarios). Oocytes were collected from the top donors selected for the trait lifetime net merit (NM$) and fertilized with sexed semen to produce IVP embryos. Due to their greater conception rates, first ranked were eligible heifer recipients based on lowest number of unsuccessful inseminations or embryo transfers, and then on age. Next, eligible cow recipients were ranked based on the greatest average estimated breeding values (EBV) of the traits cow conception rate and daughter pregnancy rate. Animals that were not recipients of IVP embryos received conventional semen through AI, except that the top 50% of heifers ranked for EBV of NM$ were inseminated with sexed semen for the first 2 AI. The economically optimal proportions of IVP-ET were determined using sensitivity analysis performed for 24 price sets involving 6 different selling prices of surplus dairy heifer calves at approximately 105 d of age and 4 different prices of IVP embryos. The model was run for 15 yr after the start of the IVP-ET program for each scenario. The mean ± standard error of true breeding values of NM$ of all cows in the herd in yr 15 was greater by $603 ± 2 per cow per year for ET100 when compared with ET0. The optimal proportion of IVP-ET ranged from ET100 (for surplus dairy heifer calves sold for ≥$300 along with an additional premium based on their EBV of NM$ and a ≤$100 embryo price) to as low as ET0 (surplus dairy heifer calves sold at $300 with a $200 embryo price). For the default assumptions, the profit/cow in yr 15 was greater by $337, $215, $116, and $69 compared with ET0 when embryo prices were $50, $100, $150, and $200. The optimal use of IVP-ET was 100, 100, 62, and 36% of all breedings for these embryo prices, respectively. At the input price of $165 for an IVP embryo, the difference in the net present value of yr 15 profit between ET40 (optimal scenario) and ET0 was $33 per cow. In conclusion, some use of IVP-ET was profitable for a wide range of IVP-ET prices and values of surplus dairy heifer calves.     

The economic cost of metritis in dairy herds

The objective of this study was to estimate the cost of metritis in dairy herds. Data from 11,733 dairy cows from 16 different farms located in 4 different regions of the United States were compiled for up to 305 d in milk, and 11,581 cows (2,907 with and 8,674 without metritis) were used for this study. Metritis was defined as fetid, watery, red-brownish vaginal discharge that occurs ≤21 d in milk. Continuous outcomes such as 305-d milk production, milk sales ($/cow), cow sales ($/cow), metritis treatment costs ($/cow), replacement costs ($/cow), reproduction costs ($/cow), feeding costs ($/cow), and gross profit per cow ($/cow) were analyzed using mixed effect models using the MIXED procedure of SAS (SAS Institute Inc., Cary, NC). Gross profit was also compared using the Kruskal–Wallis test. Dichotomous outcomes such as pregnant and culling by 305 d in milk were analyzed using the GLIMMIX procedure of SAS. Time to pregnancy and culling were analyzed using the PHREG procedure of SAS. Models included the fixed effects of metritis, parity, and the interaction between metritis and parity, and farm as the random effect. Variables were considered significant when P ≤ 0.05. Metritis cost was calculated by subtracting the gross profit of cows with metritis from the gross profit of cows without metritis. A stochastic analysis was performed with 10,000 iterations using the observed results from each group. Milk yield and proportion of cows pregnant were lesser for cows with metritis than for cows without metritis, whereas the proportion of cows leaving the herd was greater for cows with metritis than for cows without metritis. Milk sales, feeding costs, residual cow value, and gross profit were lesser for cows with metritis than for cows without metritis. Cow sales and replacement costs were greater for cows with metritis than for cows without metritis. The mean cost of metritis from the study herds was $511 and the median was $398. The stochastic analysis showed that the mean cost of a case of metritis was $513, with 95% of the scenarios ranging from $240 to $884, and that milk price, treatment cost, replacement cost, and feed cost explained 59%, 19%, 12%, and 7%, respectively, of the total variation in cash flow differences. In conclusion, metritis caused large economic losses to dairy herds by decreasing milk production, reproduction, and survival in the herd.     

Economic losses due to Johne's disease (paratuberculosis) in dairy cattle

Johne's disease (JD), or paratuberculosis, is an infectious inflammatory disorder of the intestines primarily associated with domestic and wild ruminants including dairy cattle. The disease, caused by an infection with Mycobacterium avium subspecies paratuberculosis (MAP) bacteria, burdens both animals and producers through reduced milk production, premature culling, and reduced salvage values among MAP-infected animals. The economic losses associated with these burdens have been measured before, but not across a comprehensive selection of major dairy-producing regions within a single methodological framework. This study uses a Markov chain Monte Carlo approach to estimate the annual losses per cow within MAP-infected herds and the total regional losses due to JD by simulating the spread and economic impact of the disease with region-specific economic variables. It was estimated that approximately 1% of gross milk revenue, equivalent to US$33 per cow, is lost annually in MAP-infected dairy herds, with those losses primarily driven by reduced production and being higher in regions characterized by above-average farm-gate milk prices and production per cow. An estimated US$198 million is lost due to JD in dairy cattle in the United States annually, US$75 million in Germany, US$56 million in France, US$54 million in New Zealand, and between US$17 million and US$28 million in Canada, one of the smallest dairy-producing regions modeled.     

Determining the optimum replacement policy for Holstein dairy herds in Iran

The objective of this study was to determine the optimum replacement policy for Holstein dairy herds in Iran using a dynamic programming model. Cows were described in terms of state variables that included milk production class, parity, pregnancy status, and month in milk with a 1-mo stage length. The objective function maximized the net present value of cows over a 15-yr planning horizon. Markov simulation was used to estimate expected herd dynamics under the optimal decision plan determined by dynamic programming. Stochastic elements included probabilities of pregnancy and abortion, production level, and involuntary culling. The optimum annual culling rate was estimated to be 31.4%, and cows had an expected herd life (time from first calving until culling) of 3.18 yr. High replacement cost and low carcass value resulted in only 2.87% voluntary culling (i.e., optimal model-based replacement). Assuming a heat detection rate of 0.4, cows averaged 2.8 services per lactation under the optimal policy. Sensitivity analyses were carried out to evaluate the effect of milk price, herd-average production, feed cost, heifer price, and carcass value on optimum replacement decisions. Herd-average production, replacement cost, and risk of involuntary culling were important factors affecting the optimal culling policy. Changes in the price of feed, calves, and milk and the probability of pregnancy had no considerable effect on the optimal policy considering the market situation in Iran during 2008.     

Economic comparison of natural service and timed artificial insemination breeding programs in dairy cattle

The objective was to compare the costs of natural service (NS) and timed artificial insemination (TAI) as breeding programs for dairy cows. Both programs were directly compared in a field study from November 2006 to March 2008. Reproductive results in that study were similar and served as inputs for this study. A herd budget accounting for all costs and revenues was created. Net cost during the field study for the NS program was $100.49/cow per year and for the TAI program was $67.80/cow per year, unadjusted for differences in voluntary waiting period for first insemination (VWP) and pregnancy rates (PR). After inclusion of the differences in VWP and PR, the economic advantage of the TAI program was $9.73/cow per year. Costs per day a cow was eligible for insemination were estimated at $1.45 for the NS program and $1.06 for the TAI program. Sensitivity analysis revealed that if the marginal feed cost increased to $5/hundredweight (cwt; 1 cwt = 45.36 kg), the advantage of TAI increased to $48.32/cow per year. In addition, higher milk prices and greater genetic progress increased the advantage of TAI. When semen price increased from $6 to $22, the NS program had an economic advantage of $33.29/cow per year. If each NS bull was replaced by an additional cow, the advantage of the TAI program was $60.81/cow per year. Setting the PR for both programs at 18% and the VWP at 80 d resulted in an advantage of $37.87/cow per year for the TAI program. In conclusion, any advantage of TAI depended greatly on cost to feed bulls, semen price, and genetic merit of semen.     

Lifetime risk and cost of clinical mastitis in dairy cows in relation to heifer rearing conditions in southwest Sweden

Relationships between heifer rearing conditions and the risk of veterinary-reported clinical mastitis (VRCM) during productive life were studied by generalized linear mixed modeling at the lactation level. Data consisted of 5,693 lactations in 2,126 Swedish Reds, Swedish Holsteins, or dairy cows of other or mixed breeds, representing all female animals born in 110 herds in southwest Sweden in 1998. During a lactation, a cow was defined as affected by VRCM if one or more cases were reported by a veterinarian, starting from 7 d precalving. The applied model of VRCM included effects of breed, parity, diarrhea between 3 and 7 mo of age, increase in body weight from weaning to first breeding, increase in daily concentrate ration before first calving, herd-level median age at first calving, cow housing, and random effects of cow and herd. The VRCM incidence was 14% in a given lactation, or 0.11 cases/cow annually; 31% of the cows had VRCM at least once during their productive life. Ninety percent of the variation in mastitis risk was due to factors at the lactation level such as parity, milk yield, cow diseases, and other disturbances, instead of cow or herd factors. Severe diarrhea between 3 and 7 mo of age was associated with 2.8-fold higher odds of VRCM compared with mild diarrhea during the same period, whereas the VRCM odds of calves with mild diarrhea were half that without diarrhea. The odds of VRCM had a predicted maximum at an estimated prepubertal growth rate of 859 g/d and increased with 10% for every 1-kg increase in concentrate ration during the last 2 mo before first calving. Costs of VRCM were estimated based on assumptions regarding veterinary service, extra labor, culling and herd replacement, discarded milk, and production loss depending on parity and lactation stage when VRCM was diagnosed. The total mean costs of VRCM were estimated to be $735 per lactation with a diagnosis of CM, $103 per lactation across all cows, or $95 per cow annually during lifetime.     

Risk and success factors for good udder health of early lactation primiparous dairy cows

We compared the management and housing of dairy heifers from calf to calving in herds that were very successful versus less successful in preventing mastitis in early lactation primiparous cows. This retrospective observational study included 170 Swedish dairy herds. Eligible herds were identified from the Swedish official milk recording scheme (SOMRS). Each herd had at least 60 cows per year, production data from 3 consecutive years, and at least 10 primiparous cows per year with their first milk recording 5 to 35 d after calving and their second milk recording 20 to 40 d after the first milk recording. In each herd, primiparous cows with a low (≤75,000 cells/mL) cow somatic cell count (CSCC) at both the first and second milk recording were categorized as low-low (LL); those with a high (>100,000 cells/mL) CSCC at both recordings were categorized as high-high (HH). Cows with high CSCC at the first recording and low at the second were categorized as high-low (HL). The annual proportions of LL, HL, and HH cows within each herd were calculated. Herds with an above-median proportion of LL, HL, or HH cows during the first year of a 3-yr selection period, and above the third quartile proportion of LL, HL, or HH cows, respectively, during the second and third year were identified. These herds (LL herds, n = 129; HL herds, n = 92; HH herds, n = 139) were contacted until a maximum of 60 herds per category had agreed to participate. Field technicians/veterinarians visited each herd once in the mid to late indoor season to collect data on housing and management of the heifers from birth to calving. Additional data were retrieved from the SOMRS. Associations between herd category (LL, HL, or HH) and variables collected were analyzed in 8 multivariable multinomial logistic regression submodels covering herd characteristics, milk-fed calves, heifers in early pregnancy, heifers in late pregnancy, calving and colostrum period, miscellaneous factors, summarized heifer housing data, and general health, culling, and fertility data. A final multivariable model was built from the results of the submodels and univariable analyses. The final model showed that having a standard operating procedure for colostrum feeding was more common in LL and HL herds than in HH herds; the mean bulk milk SCC and overall culling rate due to udder health was higher in HH herds than in LL and HL herds; and automatic milking was less common in LL herds than in HL and HH herds. Several herd and management variables differed between herd categories in the submodels. In conclusion, we identified several success factors for herds with good udder health among early lactation primiparous cows. This knowledge can be used to improve preventive measures in dairy herds to ensure sustainable and economic milk production.     

Effect of claw disorders on milk production,fertility, and longevity,and their economic impact in Spanish Holstein cows

The aims of this study were (1) to estimate the phenotypic association between different degrees of severity of claw disorders and production, fertility performance, and longevity in Spanish dairy cattle, and (2) to quantify its economic impact at the animal and herd level. In this study, claw data comprised 108,468 trimmings collected between 2012 and 2014 by 25 trimmers from 804 Holstein dairy herds. The claw disorders considered were the 3 most frequent disorders in Spanish dairy herds: dermatitis (DE), sole ulcer (SU), and white line disease (WL). The presence of SU or WL was associated with a significant decrease in milk production and was more important in cows in second or later lactations. A severe lesion of SU or WL lead to twice the milk losses associated with a mild lesion, ranging from 1.47 to 2.66 kg/d of energy-corrected milk. The presence of SU or WL during the early lactation period was associated with more days open, fewer inseminations to get pregnant, and longer calving to first service interval (4.83 and 8.0 d longer due to mild and severe lesions of SU, respectively, and 4.94 and 17.43 d longer due to mild and severe lesions of WL, respectively). The occurrence of a case of SU or WL in first lactation had a significant effect on longevity, with severe lesions reducing up to 71 d of productive life. The cost of a mild lesion ranged from $53 to $232 per affected cow and year, whereas the cost of a severe lesion ranged from $402 to $622 per affected cow and year. The annual costs per cow for DE, SU, and WL were $10.80, $50.9, and $43.2, respectively. An average herd with 64 cows had an extra expenditure of $691/yr due to DE, $3,256/yr due to SU, and $2,765/year due to WL. Milk losses, longer calving intervals, and premature culling contributed to more than half of the costs. Therefore, providing this information to farmers could help decide on strategies to reduce the incidence of claw disorders on the farm.     

The association of herd milk production and management with a return-over-feed index in Ontario dairy herds

Associations of herd milk production and management variables to a return-over-feed (ROF) herd profit index were examined among 95 dairy farms. The ROF index is derived from 2 important determinants of profit on dairy farms: milk income and feed cost. All producers were participants in the Dairy Herd Improvement (DHI) ROF program in Ontario, Canada during 2002. Nutrition, housing, health, and other management data were collected through a phone survey of herd managers. Herd milk production, milk component percentages, and somatic cell count data were obtained from the Ontario DHI database. The linear regression model accounting for significant variation in ROF with highest R2 (0.66) included standardized milk production, milk protein percentage, milk fat percentage, and use of monensin in lactating cow rations. A 1-kg increase in standardized milk production (kg/d per cow) or a 0.1 percentage unit increase in milk protein was associated with $0.35/d per cow or $0.26/d per cow increase, respectively, in the ROF of the dairy herd. However, a 0.1 percentage unit increase in milk fat was associated with a $0.10/d per cow decrease in ROF, probably because of a negative association of milk fat with milk yield. Use of monensin in lactating cow rations was associated with a $0.39/d per cow increase in ROF. In a separate model (R2 = 0.27) that examined management factors independent of production variables, herds using 3 times daily milking had a $1.25/d per cow higher ROF vs. herds using twice daily, whereas use of an Escherichia coli mastitis vaccine was associated with $0.59/d per cow higher ROF. Production-related variables accounted for more variation in the ROF index than management variables, and the latter, e.g., use of monensin, only marginally increased R2 of production-based regression models.     

Milk production and economic measures in confinement or pasture systems using seasonally calved Holstein and Jersey cows

This 4-yr study examined total lactation performance of dairy cows in two feeding systems: pasture-based and confinement. Spring and fall calving herds were used and each seasonal herd had 36 cows on pasture and 36 cows in confinement with 282 Holstein and 222 Jersey cows included over seven seasonal replicates. Pasture-fed cows received variable amounts of grain and baled haylage depending upon pasture availability. Confinement cows received a total mixed ration with corn silage as the primary forage. Data were collected on milk production, feed costs, and other costs. Pasture-fed cows produced 11.1% less milk than confinement cows. Across treatments, Jerseys produced 23.3% less milk than Holsteins, but calving season and various interactions were not significant. Feed costs averaged $0.95/cow per day lower for pastured cows than confinement cows. Feed costs were lower for Jerseys than Holsteins and for cows calving in spring. Income over feed costs averaged $7.05 +/- 0.34 for confinement Holsteins, $6.89 +/- 0.34 for pastured Holsteins, $5.68 +/- 0.34 for confinement Jerseys, and $5.36 +/- 0.34 for pastured Jerseys; effects of breed were significant but treatment, season, and interactions were not. Economic factors such as labor for animal care, manure handling, forage management, and cow culling rates favored pastured cows. Higher fertility and lower mastitis among Jerseys partially offsets lower income over feed cost compared with Holsteins. Milk production was lower in this study for pasture-based systems but lower feed costs, lower culling costs, and other economic factors indicate that pasture-based systems can be competitive with confinement systems.     

Economic effects of exposure to bovine viral diarrhea virus on dairy herds in New Zealand

The economic loss to dairy farmers associated with bovine viral diarrhea virus (BVDV) is believed to be high in New Zealand, but no estimates are yet available. The aim was therefore to estimate the economic loss associated with BVDV in dairy herds in New Zealand. Bulk tank milk (BTM) from a random sample of 590 herds from the Northland, Bay of Plenty, and Waikato regions was tested for antibody against BVDV. The inhibition percentage (sample to positive ratio), based on a threshold validated in an earlier study, was used to indicate herd-level infection. Herd reproductive indices, herd lactation-average somatic cell counts, and herd average production of milk solids were regressed on BTM inhibition percentage. Herd averages of the overall annual culling rate, the rate of culling because of failure to conceive, the proportion of physiological inter-service intervals, the first-service conception rate, the pregnancy rate at the end of mating, and somatic cell counts were not associated with BVDV antibody in BTM. Abortion rates, rates of calving induction, the time from calving to conception, and the number of services per conception increased, however, whereas milk production decreased with increasing BVDV antibody in BTM. The results indicated significant reproductive and production loss associated with the amount of BVDV antibody in BTM. Total loss attributable to infection with BVDV was similar to reports from other countries and estimated as NZ$87 per cow and year in affected herds, and NZ$44.5 million per year for the New Zealand dairy industry based on an estimated 14.6% affected herds. The loss estimate excludes added cost and negative consequences with respect to animal welfare attributable to increased induction rates, and a greater incidence of production disease because of BVD-induced immune suppression.     

An economic spreadsheet model to determine optimal breeding and replacement decisions for dairy cattle

The aim of this paper is to describe a user-friendly spreadsheet culling model that was constructed to support economical, optimal breeding and replacement decisions on dairy farms. The model was based on the marginal net revenue technique. Inputs for the model can be entered for specific farm conditions, and the output is easily accessible. In the model, the retention pay-off (RPO) value of individual dairy cows was calculated. The RPO value of a cow is equal to the total additional profits that a producer can expect from trying to keep the cow until her optimal age, taking into account the changes of involuntary removal compared with her immediate replacement. To calculate the RPO values, the future production, revenues, and costs of dairy cows at different levels of milk production with different numbers of days open (DO) were determined. Furthermore, the ranges of carcass value, calf revenues, and the range of involuntary disposal rates of cows within and across lactations were taken into account. To illustrate the model, parameters in the model were chosen to represent a typical Holstein dairy herd in Pennsylvania. The results of this model are very comparable with earlier, more complex models that are more difficult to use on the farm. In addition to using the RPO values to evaluate the decision to breed or replace a cow, the costs per additional DO were estimated. Early conception was most profitable with the costs per additional DO varying from $0 to more than $3/d. The model can be used as a decision-supporting tool for producers, extension personnel, veterinarians, and consultants. In addition, researchers, economists, and government organizations can use the model to determine the costs of culling dairy cows in a disease control program. The model and manual are available at http://cahpwww.vet.upenn.edu/software/econcow.html.     

Evaluating the effect of ration composition on income over feed cost and milk yield

Feed is generally the greatest expense for milk production. With volatility in feed and milk markets, income over feed cost (IOFC) is a more advantageous measure of profit than simply feed cost per cow. The objective of this study was to evaluate the effects of ration cost and ingredient composition on IOFC and milk yield. The Pennsylvania State Extension Dairy Team IOFC tool (http://extension.psu.edu/animals/dairy/business-management/financial-tools/income-over-feed-cost/introduction-to-iofc) was used to collect data from 95 Pennsylvania lactating dairy cow herds from 2009 to 2012 and to determine the IOFC per cow per day. The data collected included average milk yield, milk income, purchased feed cost, ration ingredients, ingredient cost per ton, and amount of each ingredient fed. Feed costs for home-raised feeds for each ration were based on market values rather than on-farm cost. Actual costs were used for purchased feed for each ration. Mean lactating herd size was 170 ± 10.5 and daily milk yield per cow was 31.7 ± 0.19 kg. The mean IOFC was $7.71 ± $1.01 cost per cow, ranging from −$0.33 in March 2009 to $16.60 in September 2011. Data were analyzed using a one-way ANOVA in SPSS (IBM Corp., Armonk, NY). Values were grouped by quartiles and analyzed with all years combined as well as by individual year. Purchased feed cost per cow per day averaged $3.16 ± $1.07 for 2009 to 2012. For 2009 to 2012 combined, milk yield and IOFC did not differ with purchased feed cost. Intermediate levels (quartiles 2 and 3) of forage cost per cow per day between $1.45 and $1.97 per cow per day resulted in the greatest average IOFC of $8.19 and the greatest average milk yield of 32.3 kg. Total feed costs in the fourth quartile ($6.27 or more per cow per day) resulted in the highest IOFC. Thus, minimizing feed cost per cow per day did not maximize IOFC. In 2010, the IOFC was highest at $8.09 for dairies that fed 1 or more commodity by-products. Results of the study indicated that intermediate levels of forage cost and higher levels of total feed cost per cow per day resulted in both higher milk yield and higher IOFC. This suggests that optimal ration formulation rather than least cost strategies may be key to increasing milk yield and IOFC, and that profit margin may be affected more by quality of the feed rather than the cost.     

Economic and environmental feasibility of a perennial cow dairy farm

More efficient and economical production systems are needed to improve the sustainability of dairy farms. One concept to consider is using perennial cows. Perennial cows are those that maintain a relatively high milk production for ≥2 yr without going through the typical dry period followed by calving. Farm records show that some cows have produced over 20 kg/d after 4 yr of continuous lactation. A farm simulation model was used to evaluate the long-term performance, environmental impact, and economics of a conceptual perennial cow production system on a typical dairy farm in Pennsylvania. Compared with a traditional 100-cow farm with replacement heifers produced on the farm, a perennial herd of 100 cows and purchased replacements provided environmental benefit but sustained a substantial economic loss. However, increasing the perennial herd to 128 cows better utilized the feed produced on the farm. Compared with the traditional 100-cow farm, use of the perennial 128-cow herd reduced supplemental protein and mineral feed purchases by 38%, increased annual milk sales by 21%, reduced nitrogen losses by 17%, maintained a phosphorus balance, and increased annual net return to farm management by $3200. A traditional 120-cow dairy farm with purchased replacements also used a similar amount of farm-produced feed. Compared with this option, the farm with 128 perennial cows reduced protein and mineral feed purchases by 36%, maintained similar annual milk sales, increased manure production by 7%, reduced N losses by 10%, and increased annual net return by $12,700. The economic feasibility of the perennial-cow dairy farm was very sensitive to the milk production maintained by the perennial herd and market prices for milk and perennial replacement animals. The analysis was relatively insensitive to the assumed useful life of perennial cows as long as they could be maintained in the herd for at least 3 yr. Thus, a perennial cow production system can improve the economic and environmental sustainability of a traditional dairy farm if a similar level in annual milk production per cow can be maintained.