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There is a cost to raising heifers

Progressive Dairyman Editor Karen Lee Published on 29 May 2015

Raising replacement heifers is one of the most costly aspects of a dairy farm. Heifers don’t bring a return for two years or more until they enter the milking string.

They are also the future of the dairy herd, and without them the dairy wouldn’t last long.

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“When raising heifers, the aim is to get the animals out of the youngstock herd and into the production herd as early as feasible,” Roger Mills said.

“We want to get the raising cost under control and at the same time maximize the production of those animals when they get into that first lactation,” he continued.

Mills is a dairy business consultant with the Manitoba Dairy Farm Management Group. He addressed a crowd at the Western Canadian Dairy Seminar earlier this year with a presentation titled “Replacement Heifers Aren’t Free.”

He focused on the cost of raising heifers, age at first calving, using sexed semen, and custom-raising and purchasing replacements instead of raising heifers at the home farm.

Cost of raising heifers

“What we’re not trying to do is to raise [heifers] as cheaply as possible – because then we’re likely going to be delaying that age at first calving and then it’s going to cost more to raise the heifers,” Mills said.

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He is able to obtain costs from a software program his group uses to set benchmarks.

The first step in determining production costs is to place a value on the calf. He calculated that value using the total cost of semen used on the farm during that year (including the cost of any synch programs) divided by the number of live heifers at the end of the year.

Mills did not use the total number of calves born because mortality can be a big factor. He ended up with a value of $120 for the calf.

Both milk and milk replacer have a cost. The value of milk replacer is simply the purchase price. For whole milk, Mills said to use the farm’s cost of milk production for a value.

Mills shared some data relating to variable costs in raising heifers. Dating back to 2009, the variable cost of raising a heifer was $1,650. It increases consistently over time to a value slightly more than $2,180 in 2013. Most of that is feed, he said, which represents 80 percent of the cost of raising a heifer.

Data from another project with 32 farms in Ontario and British Columbia broke down the costs at each stage of the heifer’s life (see Table 1). Calving is a moving target, and in this study, the average age at first calving was 25 months.average feed costsWhen combining the total from Table 1 of $1,670 with $200 for other direct costs such as veterinary, breeding and bedding, plus $120 for the calf, it amounts to almost $2,000.

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Fixed costs vary quite a bit from farm to farm. Labour, interest payments and depreciation would be the main components, but manure removal, machinery repairs and personal withdrawals also come into that category.

With a new facility, there will be higher payments and higher depreciation costs.

“All of those things have to be shared with the youngstock as well as the production herd,” Mills said.

For fixed costs, add $500 to $1,000 to the cost, and the total value of a farm-raised heifer is somewhere between $2,500 to $3,000.

Age at first calving

The right age at first calving gives animals a chance to optimize their production in first lactation and their lifetime production, Mills said.

Data shared from Valacta indicated animals calving at 24 and 25 months achieve optimal milk yield. As heifers have an older age at first calving, they produce less.

To hit the optimal age at first calving, heifers need to grow well, at least 0.9 kilograms per day all the way through, he said.

Producers should consider breeding when the heifer is 350 kilograms and 13 months old to have a chance of having them calve at 22 to 24 months.

Accelerated feeding programs with higher-protein milk replacer and automated feeding with higher rates of feeding are working to increase calf growth to ensure heifers are big enough to breed at the target age.

Sexed semen

Using sexed semen is one way to increase the heifer population in the herd, but there has to be a plan or a farmer could end up with a lot more heifers than he or she could use.

“We tend to want to keep every heifer calf that we actually get, but it does cost money,” Mills said.

Surplus heifer sales very rarely result in surplus cash. With the costs outlined in Table 1, it gives an idea of what to pitch for an asking price at various stages of growth.

Mills offered three options for dealing with surplus heifers:

1. Bring them all into the herd, which provides an opportunity for voluntary culling. There is very good revenue from cull cows at the moment, but that won’t always last. A high cull rate will cost the business a lot of money to use heifers to maintain herd size, he said.

Forty percent of producers in his benchmarking group had cull rates of 40 to 50 percent. A 40 percent cull rate means the animals are in the herd for 2.5 lactations, Mills said.

If it takes 1.5 lactations to pay for raising cost, they’re not given much of a chance to contribute to revenue stream of the farm.

2. Cull or sell some during the raising cycle knowing it is unlikely to recoup more than the cost to raise the animal to that point. One idea is to filter heifers at breeding and take out the poor breeders, as they will likely be poor breeders for life.

3. Cull or sell some in the first few weeks of life using results from genomic testing. There is a cost for the test but also the chance to save $2,000 on heifers that aren’t going to contribute any length of time in the herd because they don’t have that genetic potential, he said.

Custom-raising

This is a good option for producers who have very limited facilities, not enough labour or insufficient land base to produce enough feed.

“If putting out to a custom raiser, it is going to be the same cost, and the raiser wants a fee on top of that. It’s not necessarily going to be any cheaper,” Mills said.

He suggested having a contract that outlines the guidelines and specifications, such as target weights and breeding at the right time.

Purchasing replacements

“Based purely on economics, this would be your best decision,” Mills said, mentioning it can be tough to change the mindset from raising your own to raising none.

There is also a much greater risk of importing disease when buying from more than one source.

He said producers with experience in purchasing animals say heifers coming onto the farm can underperform. They are entering a different environment with different nutrition and management. “Sometimes the performance can be very disappointing,” he said.

When raising replacement heifers, it is important to know production costs and develop a program to optimize growth.

Lastly, Mills said, producers should raise only as many heifers as required with 10 percent extra.  PD

Karen Lee
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