Decisions4Dairy - Cost of Production: Herd replacement cost

Decisions4Dairy - Cost of Production: Herd replacement cost

Herd replacement cost is the cost of maintaining desired herd size and is calculated as the cost of replacements minus the income from cull animals. Total annual replacement cost will depend on the herd replacement rate and the individual replacement cost. Clearly, it is heavily influenced by individual herd circumstances, for example, an expanding herd will inevitably have a high replacement rate. Typically, herd replacement cost is the third highest cost of milk production but it is often overlooked*.

 

Julia Moorhouse of EBVC takes a look, as part of the Decisions4Dairy cost of production theme.

 

How can I reduce total herd replacement cost?

Three factors contribute to herd replacement cost: replacement rate, income from cull animals and cost of replacements. These will each be discussed below.

What is a reasonable replacement rate?

The average replacement rate on UK dairy farms is 30% but variation between farms is huge (between 11% and 62% in a recent unpublished survey). It is not necessarily helpful to benchmark and compare replacement rates between farms due to differences in circumstances. However, it is important to compare your own farm’s replacement rate year on year and look at the reasons behind any changes.

Should I always be looking to reduce my herd replacement rate?

It is not always appropriate to reduce your herd replacement rate, for example, the risk of keeping a chronically infected mastitis case in your herd may outweigh the benefit of a reduction in replacement rate.

 What difference do cows exiting the herd make?

Income from cull animals and those sold for milking has a major influence on the cost of each replacement. An audit should be carried out to determine the proportion of culls which leave the farm dead, those sold for milking and those which enter the food chain.  It is important to record the major reasons for culling for each individual as this helps to prioritise herd health planning programmes (AHDB Dairy cull cow calculator can help with this).

Average income from cull animals can be increased by:

  1. Minimising the proportion of animals leaving the farm dead
  2. Increasing the value of the individual cull by improving body condition prior to sale (AHDB Dairy Finishing calculator can help you decide whether this would be a profitable thing to do)
  3. Where possible, targeting sale of culls at a time when market price is high.
  4. Where appropriate, increasing the proportion of culls sold for milking.

 What is a reasonable cost to rear my own replacements?

A recent AHDB Dairy-funded study demonstrated that the average cost of rearing dairy heifer replacements in Great Britain was £1819 (Boulton, 2015). The first step must be to determine your own herd’s heifer replacement cost. This can be done by utilising the AHDB Dairy Heifer Rearing Cost Calculator.  A realistic target can then be set for your own herd.  On the majority of farms, there is scope for significant cost reduction as the range of rearing costs is huge – from £1073 to £3070.

How do I reduce the cost of rearing replacements?

The biggest factor affecting heifer rearing costs is the age at first calving. The target should be an average age at first calving of 24 months with heifers weighing 90% of mature cow body weight at calving. In order to achieve this, several targets must be met along the way (see box below) – monitoring regularly will allow a herd to determine which targets are being achieved and focus on where improvements need to be made. A huge range of factors can impact on growth rates including nutrition and disease. By identifying the stage(s) during which calves underperform, focused investigation can then take place to determine why performance is suboptimal.

HRC 1

There is considerable variation in mature cow body weight between farms, therefore it is essential to measure this for your own unit by weighing some 3rd or 4th lactation cows. If you don’t have a weigh scale, a weigh band gives an approximation or put a few in a trailer and take to a local weighbridge.
The potential savings are significant – figures show that a reduction in average age at first calving from 26 months to 24 months represents a saving of 15.7% of the total cost of rearing (Boulton, 2015).

Another key consideration is heifer mortality. On average, 14% of heifer calves born alive in the UK fail to reach their first lactation (Wathes, 2008). Accurate mortality figures for an individual herd must be used in calculating actual heifer replacement costs for that herd. Mortality rates for each stage of rearing should be compared to targets and action taken, where necessary.

For support in achieving these targets with the AHDB Dairy campaign Calf 2 Calving, visit: dairy.ahdb.org.uk/c2c

Is it better to home rear, contract rear or buy in my replacements?

This depends on a range of factors, however, if you are currently rearing your own heifers, the first step is to determine your current cost of heifer rearing.  This then allows comparison with other options. 

Contract rearing or buying in replacements may be an attractive option to farms which lack the resources (time, buildings or labour) to rear their own replacements. The potential biosecurity risk of these strategies must be taken into account (the Cattle purchase check list can help you). In contract rearing scenarios, it is imperative that the terms of the contract focus on the primary aim – which should be to rear heifers to calve at 2 years old and 90% of mature body weight.

Tues 1 

 

Julia Moorhouse BVM&S CertCHP MRCVS 

Veterinary Nutrition Consultant

The Evidence Group

juliammoorhouse@ebvc.eu

http://www.ebvc.co.uk/