A MILLION DOLLAR OPPORTUNITY

Kelly Sporer, Ph.D., Records Analysis Consultant, CentralStar Cooperative Inc.

How do you look at new opportunities? Each day, we are faced with a myriad of opportunities, big and small. Sometimes they are easy-to-recognize and other times they are disguised as obstacles. Digging deep, reviewing data and breaking down obstacles in order to create profit-generating opportunities is my passion.

Select Reproductive Solutions® (SRS®) consultants regularly analyze a herd’s reproductive performance from all angles: conception by lactation group, breeding trigger, technician, service sire, and any number of other factors. We know that there are many factors that contribute to a herd’s profitability aside from just pregnancy rate.

Another main area that I like to investigate when analyzing herd data is cows leaving the herd in the first 60 days in milk (DIM). This gives an indication of how well cows are making it through the transition period, which we recognize as a stressful event in the life of the cow – full of changes in group, ration, immunity, uterine and mammary physiology, and more.

Recognizing achievements and pinpointing challenges

I’ll share an example based on a herd that utilizes Select Sires’ genetics and services, including biannual SRS meetings with the nutritionist, herd personnel, CentralStar sales manager, A.I. technician and Select Mating Service® genetic consultant. This herd is doing a lot of things well. They are averaging over 90 pounds of milk per cow at 6.6 pounds Combined Fat and Protein (CFP), a yearly Somatic Cell Count (SCC) average of 109,000 and a 30% 21-day pregnancy rate.

With any herd, there’s opportunity for progress and oftentimes an opportunity to save money or enhance profitability. We analyzed this herd’s data and discovered that 14.1% of cows were leaving the herd in the first 60 DIM, this value did not include dairy culls. Industry benchmarks would recommend this value remain below 6%.

Current replacement costs are estimated at $2,000-$2,500 –meaning these culls are tremendously expensive. First lactation cows haven’t even begun to pay for their rearing costs, nor have mature cows paid for their dry period costs during which they obviously weren’t producing any milk.

Herd records showed that 28% of the cows leaving in the first 60 DIM were, in fact, first lactation cows. The herd has a pretty typical cull rate of approximately 31%, but the vast majority of these culls were occurring involuntarily early in lactation.

Understanding the financial impact

The calculator below shows the estimated cost of this herd’s high losses in those first 60 DIM. Using the current milk price/CWT from a Michigan co-op, current cull cow price from a west Michigan auction yard, dry cow and replacement costs found in recent literature, we put the calculator to work.

Fortunately, this herd values their monthly Dairy Herd Information (DHI) data, so I was able to include Energy-Corrected Milk (ECM) in the calculations. I input the number of cows that were sold and had died from each lactation group, the current 305-day actual ECM from their records, and Lactation to Date (LTD) ECM to account for any production reclaimed before the cow was culled. It’s also important to note that the herd averages around 60 days dry.

Any revenue from LTD ECM, plus the salvage value of cows sold, was considered and subtracted from the total loss of production plus replacement cost for first lactation cows and dry cow costs for mature cows. When all was said and done, the analysis showed that the herd was losing more than one million dollars per year in these expensive involuntary post-transition culls.

Creating solutions and implementing an action plan

Analyzing data and pinpointing opportunities or challenges is just one part of my job as an SRS consultant. Creating viable solutions and helping herds implement an action plan is the other and perhaps the most critical component of my role.

With this herd, we discussed ways to alleviate overcrowding and improve the environment in the close-up and fresh pens. The SRS and on-farm teams also brainstormed ways to provide the overtaxed herdsman with help to monitor those sensitive pens more frequently.

We also suggested CowManager® as a herd monitoring tool for a constant set of eyes and ears. The herd quickly recognized the value in a herd monitoring system and has since ordered tags for the milking herd. With CowManager installed and other changes on the horizon, fewer cows are expected to leave before recouping their investment costs.

I always enjoy working with herds and helping them achieve their genetic and reproductive goals. There are so many metrics to consider when analyzing a dairy’s profitability and there are many times when it isn’t the obvious rates like pregnancy or conception that cost herds the most money. Contact your local SRS consultant to review your dairy’s records, identify opportunities and help you create a strategy that brings more profit to your operation. u