Should Herd Grow or Heifers Go?

3/8/2014 7:00 AM
By Charlene M. Shupp Espenshade Special Sections Editor

EAST EARL, Pa. — Raising heifers is one of the top three costs for a dairy farm, along with feed and labor. There is a two-year investment in these calves before they enter the herd.

Steve Bodart, a business consultant from AgStar who spoke at last week’s Agricultural Veterinary Associates Dairy Producers meeting at Shady Maple, said farmers need to understand how their culling decisions will affect farm profitability.

“You have to know your costs. We are in this to make money,” he said. “Replacements have gotten lost” in the decision-making process.

Farmers can reduce the cull replacement rate by culling at the appropriate time, identifying sources that result in cow culling and minimizing the number of cows that leave early, he said.

Conventional wisdom is to raise all the heifers. If there are extras, they can replace older cows on the assumption a younger heifer will be more profitable. Or farmers can sell the extra springing heifers.

Bodart disputes that view. On average, he said, it costs about $2,000 to raise a calf from birth to freshening. Costs are about the same for custom-raised heifers.

The chance of realizing profits on selling springers, or heifers close to calving, is “slim at best,” he said.

As for adding heifers in the milking herd, each will have to produce 32,000 pounds of milk to cover her rearing costs, which means it will take more than one lactation before she is profitable.

So what should a farmer do? Raise calves, sell springers or cull the milking herd?

Bodart said farmers should use the net replacement cost, or difference between the cost of a replacement heifer and the value of the replaced cull cow, as a benchmark for making decisions.

“Culling for the sake of culling as a hobby is not a profit-making decision,” he said.

Bodart has been working with herds to refine the model. It’s usually assumed, he said, that heifers will be genetically superior to the cows they replace. But when heifers are genomically tested, it becomes apparent that some are better, others are not.

Several of Bodart’s clients are implementing a modified culling model using genomic testing to make their decisions.

He said farms that retained 85 percent of their heifers were $331 per cow more profitable than those that kept 100 percent of their heifers if they based their culling decisions on the milk-production indicator from genomic total parent average, or GTPA, testing at 4 months of age.

Additional culling is adjusted to herd size.

The higher income is the result of both increases in milk production and lower costs from raising fewer heifers.

Based on these initial findings, Bodart projects that farm profitability will continue to climb as these heifers enter the herd.

No matter what farmers decide to do with their heifer programs, Bodart said, they need to implement strategies that meet their near- and long-term goals.

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