Symposium review: An abundance of replacement heifers: What is the economic impact of raising more than are needed?

Historically, most dairy producers raised every heifer born, to ensure a supply of future replacements. However, advancements in transition and reproductive management, coupled with widespread use of sex-sorted semen in dairy heifers and cows, have led to an oversupply of dairy replacement heifers in the United States. With current market values for prepartum heifers at $1,300 and estimated raising costs ranging from $1,700 to $2,400, dairies that continue to produce quantities of heifers in excess of anticipated needs with plans of selling the extras on the open market are likely to experience significant economic loss. Adult cow herd turnover is the key driver behind the number of heifers needed to calve; however, mortality, disease, fertility, and elective culling losses throughout the heifer-raising period determine the total number of heifers that must be retained and raised to meet anticipated needs. A convenience sample of 50 US dairy herds revealed an average heifer inventory of 102% of total milking and dry cows. In this data set, the mean annualized adult herd turnover was 39%. With a mean stillbirth risk of 5.7% in calving heifers, a culling risk of 10.2% by 13 mo of age, a reproductive failure risk of 6.8% in breeding heifers, and an additional culling risk of 6.4% in pregnant heifers, only 74% of calving events with a heifer birth yielded a heifer that entered the lactating herd. Much of this heifer removal was elective, and making the correct culling decisions at the appropriate time yields the best return for the herd. To demonstrate how a herd might approach the elective culling issue, a records-based exercise with 2 large Holstein herds was performed to estimate the cost versus benefit of 3 different elective culling approaches, using a combination of genetic potential and growth performance as the selective criteria. However, the culling of heifers results in economic losses, because the revenue received is less than the cost incurred during raising. Selective culling of heifers soon after weaning yielded the best results in both herds, but despite the predicted improvement in lactation performance of the retained group, the cost associated with removal was greater than the benefit predicted. Culling a group early and then culling a second group just before calving yielded the largest loss. Moving forward, herds should breed more carefully to produce better-quality heifers from more superior dams and sires and consider the use of beef semen in inferior animals. However, to reduce the risk of not producing an adequate supply of replacement heifers, dairies should add an additional buffer to their anticipated needs. Using the assumptions within this project, having 10% extra calving events with a heifer birth would allow the annualized adult herd turnover to rise from 39 to 43% in case economic conditions or health status of the herd should change. If these heifers are not needed, the selection criteria outline could be used to help identify more valuable animals to retain.

Effect of health status upon arrival at a single milk-fed veal facility on breakeven purchase price of calves.

Male calves are purchased from the dairy industry in North America to produce red meat. The price paid for male calves varies widely, and it is unclear which variables influence the price paid for each calf. The objective of this study was to assess how the health traits of calves at the time of arrival and demographic variables affect the breakeven purchase price of a male calf entering the veal industry. A financial model was constructed using the prevalence of health abnormalities, weight at arrival, source of the calf, number of days in the barn, base carcass price, days to mortality, feed costs, season at arrival, interest rate, housing location, carcass dressing percentage, and costs associated with housing, labor, utilities, trucking, and health to calculate the breakeven purchase price and an estimate of profit. Sensitivity analysis was conducted using health variables measured at arrival and demographic variables, including season at arrival and housing location, to identify the factors with the largest impact on the predicted average daily gain, early and late mortality risk, breakeven purchase price, and profit. At the baseline inputs, the average calculated profit was -$5.36 per calf and it was most sensitive to the location of housing where calves were fed and the body weight of the arriving calf. The mortality risk in the first 21 d after arrival (early) was calculated to be 2.2%, whereas the risk of mortality after 21 d (late) was 3.7%. The risks of early and late mortality were most sensitive to the level of dehydration measured at arrival and the season at arrival for the purchased calves, respectively. The calculated average daily gain was 1.12 kg/d and it was most sensitive to housing location. The breakeven purchase price was calculated to be $242.49 per calf, which was most sensitive to the housing location where the calves were fed. The results of this analysis demonstrate that veal producers need to consider many variables before purchasing calves. In addition to overall market conditions, veal producers should factor health characteristics and the expected performance of the calves they purchase into what they are willing to pay for them.

Effect of health status evaluated at arrival on growth in milk-fed veal calves: A prospective single cohort study.

The objective of this prospective single cohort study was to determine the effect of health status at arrival on growth in milk-fed veal calves. Upon arrival at the veal facility, calves were evaluated using a standardized health scoring system and weighed, and the supplier of the calf was recorded. The calves were followed until slaughter, when the hot carcass weight (HCW) was reported. To calculate average daily gain (ADG), the HCW was transformed into an estimated live weight, weight at arrival was subtracted, and this value was divided by the number of days on feed. A mixed linear regression model was created to evaluate the association of health status on arrival with the ADG throughout the production period. A total of 4,825 calves were evaluated at arrival; however, due to inconsistent HCW data from one slaughter plant, and 357 calves dying during the production period, 2,283 calves were used for analysis. In the final model, 7 variables were significantly associated with ADG. Housing location within the farm, method of calf procurement (drover or auction-derived calves versus direct delivery from local farms) and having a higher body weight at arrival were associated with a higher ADG. The season of arrival (summer or fall compared with winter) and being dehydrated at arrival were associated with a lower ADG. Days on feed was also significant in the multivariable model and had a quadratic relationship with ADG. The associations identified suggest that there may be value in scoring dehydration and body weight at arrival to a veal facility.

The cost of clinical mastitis in the first 30 days of lactation: An economic modeling tool.

Clinical mastitis results in considerable economic losses for dairy producers and is most commonly diagnosed in early lactation. The objective of this research was to estimate the economic impact of clinical mastitis occurring during the first 30 days of lactation for a representative US dairy. A deterministic partial budget model was created to estimate direct and indirect costs per case of clinical mastitis occurring during the first 30 days of lactation. Model inputs were selected from the available literature, or when none were available, from herd data. The average case of clinical mastitis resulted in a total economic cost of $444, including $128 in direct costs and $316 in indirect costs. Direct costs included diagnostics ($10), therapeutics ($36), non-saleable milk ($25), veterinary service ($4), labor ($21), and death loss ($32). Indirect costs included future milk production loss ($125), premature culling and replacement loss ($182), and future reproductive loss ($9). Accurate decision making regarding mastitis control relies on understanding the economic impacts of clinical mastitis, especially the longer term indirect costs that represent 71% of the total cost per case of mastitis. Future milk production loss represents 28% of total cost, and future culling and replacement loss represents 41% of the total cost of a case of clinical mastitis. In contrast to older estimates, these values represent the current dairy economic climate, including milk price ($0.461/kg), feed price ($0.279/kg DM (dry matter)), and replacement costs ($2,094/head), along with the latest published estimates on the production and culling effects of clinical mastitis. This economic model is designed to be customized for specific dairy producers and their herd characteristics to better aid them in developing mastitis control strategies.