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Optimizing culling and herd structure for better profitability

Murilo Carvalho for Progressive Dairy Published on 11 February 2022

The discussion around increasing productive lifespan is not new. With tight margins, very high feed costs and a limited increase in milk prices, it is essential to fine-tune every aspect of your dairy operation to make sure your farm is profitable and sustainable.

At the end of the day, a profitable bottom line is highly linked to the average production and longevity of the cows. Considering feed costs are the highest expenditure in any herd, the investment to raise heifers is higher than ever. Therefore, these heifers must last longer to return the capital you have invested in raising them. Taking into account the average productive lifespan in Canada is 2.4 lactations and the average cow takes about 1.5 lactations to pay back her raising cost, the “profit window” is currently very short.

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The main reason for culling in Canada is reproduction (see Figure 1), although we know the decision to ship a cow out is rarely due to a single reason.

Reason for culling

In addition, fertility is heavily affected by several environmental factors, such as diseases, heat stress and nutritional problems. The same can be said about feet and leg problems and mastitis. These issues can drastically affect production long-term, so all the five major culling reasons are linked together. It is impossible to point out a single aspect that shortens cows’ productive life, so a comprehensive approach is necessary to find the bottlenecks.

Genetic opportunity, maturity costs and depreciation

The genetic opportunity cost is how much you “miss” by keeping a cow longer instead of replacing her with a heifer with higher genetic merit. The breed improves genetically year-over-year, so you make genetic gain by selecting bulls and dams that transmit higher production and longevity. This is not easy to measure at the herd level, but the average breed gain ($250 Pro$ per year) can be used as a benchmark. In practical terms, each year the heifers born generate more profit than their dams and so on.

The maturity cost works the other way around: It is how much you “miss” by having a first-lactation cow instead of a mature one. First-lactation cows produce around 20% less than fully mature cows (third to fourth lactation). In the end, this is 20% less income over a year and a lower return over the feed cost. Therefore, a very young herd is not as desirable as a more mature herd because you could fill the same amount of quota with fewer animals.

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The depreciation cost, or replacement cost, is the trade-off between genetic gain and longevity. Similar to buying a new machine, an investment is made to raise a heifer that will calve and start to generate income (from milk). At some point, you “trade” the cow in to invest in a new one – that is when you sell her, get back some income and replace her with another one. The depreciation cost is the difference between the raising and selling prices, which can be diluted over the productive lifetime of that cow.

Thinking about a tractor, anyone would invest an extra $5,000 on one that lasts three more years because the higher cost is almost irrelevant compared to how much more money it is going to bring. That logic works for cows, too. Just keep in mind: At some point, that tractor will be old enough that it is more advantageous to buy a new model that is more economical and efficient. This is valid for cows, too – the key is balancing out genetic gain and longevity.

Ideal longevity and right-sizing your inventory

Striving for longer-lasting cows is a goal around the industry, but is there a goal point? This varies herd by herd, but an average between four to five lactations seems to be economically ideal, according to a study published in 2020. This translates into a culling rate below 25%, considerably lower than the national average of 32.5%. That way, you optimize average production (more mature cows) while still making good genetic progress. Tables 1 and 2 show what the herd structure would look like.

Example of herd structure distribution of lactation

Number of heifers required each year according to replacement rate and age

The other benefit is the drastic reduction in the replacements required. For a 100-cow herd, moving the herd turnover from 30% to 25% means around five fewer heifers to keep each year, which can save over $15,000 per year.

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Talking about replacements, this is where herds can easily see the economic impact. Historically, there was a good market for fresh heifers, but this is not the reality anymore; fresh heifers are being sold 20% to 30% below raising costs. This has resulted in many older cows being sold to make room for a fresh heifer just to avoid economic loss. Looking forward, keeping tight control of your heifer inventory can boost your financial returns. It is also a good idea to calve them around or before 24 months old, as long as they are developed enough. That way, you can reduce the amount of heifers and the cost to raise them.

Ways to improve longevity and profitability

Striving for cows that have high production and lactation persistency allows you to give more chances for them to become pregnant before deciding it is not economically worth it to try again. Some high-producing herds with a high 21-day pregnancy rate are even delaying the first breeding because they know their cows hold high amounts of milk for a long time. Along with that, it is crucial to make sure the udders, feet and legs are well built to sustain high production for several lactations while the cow is still functional and mobile. We know some conformation traits have a strong relationship with longevity (see Figures 2 and 3).

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Finally, special attention around parturition: Most of the outcomes of the following lactation are drastically affected by the conditions and events just before and after parturition. Together, these strategies should help you reduce expenses while boosting income through higher production and longer-lasting cows. end mark

References omitted but are available upon request. Click here to email an editor.

Murilo Carvalho
  • Murilo Carvalho

  • Education and Extension Specialist
  • Strategic Communications
  • Holstein Canada
  • Email Murilo Carvalho

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