Heifer rearing – worth the investment?

Published 31 March 15

A recent DairyCo-funded study sheds light on the critical areas of youngstock rearing. Here, Dr Alana Boulton from the Royal Veterinary College reports on results of her PhD study on the economics of heifer rearing in Britain.

Rearing is often perceived as a ‘non-productive’ period of the dairy farming system, and the length of this period is determined to a large extent by the farmer’s decisions on the level of nutrition and reproduction management. While a higher plane of nutrition may generate greater daily feed costs, these are generally recouped when heifers calve at a younger age, through savings on labour, housing and overall feed costs.

A trial including 900 dairy animals raised in a contract heifer operation in Spain and followed into 3 different dairy herds reports that on average, calves gaining 1kg a day could be expected to produce about 1,000kg more milk during their first lactation than calves reared on a traditional system gaining about 500g a day. They are also more likely to reach a second lactation. Therefore, providing the necessary nutrition to sustain rapid growth rates (>750g a day) during the first two months should not only result in more efficient (economical) heifer rearing but also in more effective (greater milk performance) results.

Recent estimates of the cost of rearing have ranged from £1,000 to £1,500, and tend to average around £1,200. But to create a more accurate estimate – and address an absence of GB-based empirical data on current heifer rearing practices and costs of rearing – a DairyCo funded survey of 102 dairy farms in England, Scotland and Wales was undertaken. The rearing period was separated into three development periods, (i) birth to weaning, (ii) weaning to conception and (iii) conception to calving. Farm factors and key rearing events, including mortality were analysed and a gross margin calculated for each farm. The length of time it took for the heifer to repay its cost of rearing was also determined.

The cost of rearing, including fixed and variable costs, interest on capital and opportunity costs ranged from £1,073.36 to £3,070.46, with an average cost of £1,819.01 – considerably more than previous estimates. The period from birth to weaning contributed on average to 10.8% of the total cost of rearing, weaning to conception had an average contribution of 40.4% to total cost, with conception to calving contributing 24.5%. Interest on capital and opportunity cost of a dairy heifer accounted on average for 24.3% of the total cost of rearing.

The daily cost of rearing per heifer ranged from £1.47 to £3.35 with an average of £2.31. The period from birth to weaning had the highest average daily cost of £3.14, weaning to conception had an intermediate daily cost of £1.65 and conception to calving had the lowest daily rearing cost of £1.64 per heifer. These differences could be explained in part by the difference in input costs (eg milk powder has the highest per tonne cost) during the three periods and the labour and housing costs once the heifer is weaned. 

To determine the repayment period for the heifer to pay back the cost of its rearing, for each day after first calving extra cost in the form of maintenance or variable costs (food, housing, breeding, veterinary, etc.) was balanced against the revenue secured from milk production. In this study the average number of days post first calving that heifers paid back their cost of rearing was 530 days, ranging from 168 to 2,321 days. This translates into approximately 1.5 lactations (range 1 to 6 lactations) before heifers begin to make a profit for the farm.

The largest contribution to costs overall was from feed. Excluding interest and opportunity cost, purchased feed and home grown forage contributed 36.8% and grazing 6.9% to the total cost of rearing. Labour and bedding were the next two largest contributors accounting for 22.3% and 8.7% of the total rearing costs respectively.

The factors identified as having the most significant effect on cost of rearing were age at first calving (AFC), the percentage of time the heifer spent at grass, calving pattern, herd size and breed. The mean cost of rearing increased by £2.87 for each day increase in AFC and decreased by £6.06 for each percentile increase in time spent at grass. Both spring and autumn block calving herds had lower average costs of rearing compared to all year round calving and multi block calving farms. Those with herd sizes greater than 100 had lower average costs of rearing compared with farms with less than 100 cows. This is likely due to economies of scale where all input costs and cost of mortality is apportioned to a larger number of surviving heifers. The average cost of mortality apportioned to each surviving heifer was £139.83, ranging from £103.49 to £146.19, which represented average mortality rates of between 3.4% and 7.9% throughout the heifer rearing period.

Gross margins per heifer averaged £441.66, ranging from -£367.63 to £1,120.08. It is important to note that gross margins do not include fixed costs and estimates of output rely on livestock market and disposal sale prices, which vary greatly depending on the time of year, breed, genetics of the animal and livestock numbers available for sale.

Overall, the results of the economic analysis indicate that management decisions on key reproduction events and grazing policy significantly influence the cost of rearing.

Heifers are the future of the dairy herd and deserve to have the best management that incorporates all the latest research and management advice. In return they will repay the investment through higher milk production and a longer productive life. With this in mind, DairyCo have produced a series of factsheets and associated short films on how to optimise calf performance. The films are available to watch and the factsheets are available for download at www.dairyco.org.uk/calves

Alana Boulton hosted a webinar on her research study on Wednesday 11 March 2015, including the areas above and the costs of mortality. The webinar as seen above can also be accessed on YouTube

Alana is a graduate of the Royal Veterinary College with a PhD in the economic analysis of heifer rearing and breeding selection on GB dairy farms and a MSc in Veterinary Epidemiology. Alana’s research provides dairy farmers with an evidence base for decision-making on youngstock rearing production and health management as well as on the monitoring and evaluation of the system.