< Digest Paper - Profitability and efficiency of the five lactation average dairy cow

Introduction

There is a growing desire to extend the productive lifetime of dairy cattle. Extensions of productive life could be good economically, and also have benefits for environmental sustainability and society’s view of dairy farming. Productive life is generally defined as the time from first calving to leaving (exiting, culling) the herd because the cow is deemed no longer sufficiently productive and has no future on another dairy farm either.

In the UK, the average number of lactations before removal of unproductive cattle is approximate 3.6 lactations (Hanks and Kossaibati, 2019). In this survey of 500 farms, one quarter had cows exiting the herd with fewer than 3.2 lactations on average. One quarter of the farms had cows exiting the herd with at least 4.0 lactations on average.  About 7% of farms reached averages of 5 lactations or more. The natural lifespan of cattle is said to be approximately 20 years (Nowak and Walker, 1999), but very few dairy cattle reach that age.

With lactation lengths typically a little longer than one year, the 3.6 lactations translates to an annual cull rate of 27% (Hanks and Kossaibati, 2019). This implies that the 5 lactation averages is equivalent to approximately a 19% annual cull rate. Such a low cull rate is likely not reached in any of the leading dairy countries yet (Schuster et al., 2020).  A 19% annual cull rate is equivalent to a productive life of 1/19% = 5.3 years.

In contrast, annual cull rates in the USA are on average approximately 34%. In the USA, the trend is towards shorter productive lives. To illustrate, the current CDCB (USA) genetic evaluation system assumes an average productive life of 2.8 lactations, but likely will shorten this to 2.6 lactations later in 2021. The USA dairy production system is more confined, more intensive, and has higher producing cows than in the UK.

Risk factors

Judging from primary culling reasons given by dairy producers in the national milk recording scheme (DHIA) in the USA, frequently given reasons for cows exiting the herd indicate that these cows have problems. For example, the top 4 leading reasons are reproductive problems, injury or other problems, death and mastitis (De Vries and Marcondes, 2020). Low production is the fifth ranking reason given.

Looking at risk factors for culling, it is clear that older cows have greater daily risks of culling than first lactation cows (Pinedo et al., 2010).  In addition, the first 60 days after calving have greater risks of culling, an indication of calving and metabolism related causes. Pregnancy protects against culling. A recent review describes many risk factors for culling (De Vries and Marcondes, 2020). To summarize that review, cows with 4 events per lactation (1 calving, 1 breeding, 1 pregnancy diagnosis, 1 dry off) survive the longest, at least if they are decent milk producers. These cows stay  unnoticed. Removal of risk factors such as failure to conceive, lameness, mastitis, metabolic problems, and structural udder defects creates greater opportunity to keep cows longer.

Genetic selection is already resulting in cows that are genetically better able to get pregnant, with lower risk of mastitis, and lower chances of death in at least the last 20 years since more selection emphasis has been placed on functional traits (https://queries.uscdcb.com/eval/summary/trend.cfm). Selection in the past 60 years has resulted in an increase of approximately 20 months in the breeding value for the trait productive life in the USA. However, this gain has not resulted in a decrease of the annual cow cull rate. This fact shows that within-herd competition, rather than the absolute ability to avoid culling, is an important driver of the number of lactations that cows stay in the herd. Many cows exit the farm when the dairy producer has a choice, not because there is no future production possible.

In the USA, it is becoming widely recognized that the number of calving heifers drives cow cull rates (Overton and Dhuyvetter, 2020). High cull rates are often the result of too many raised heifers. In the USA, improvements in fertility and a greater use of sexed semen are leading to more dairy heifers born than in the past. Traditionally, all dairy heifers are raised with the intent to become lactating dairy cows. Dairy producers make room for calving heifers by culling cows. Only in the last 5 years is a viable beef-on-dairy market emerging, which offers dairy producers the option to produce calves that are not raised as dairy heifers. This implies that dairy producers need to rethink the number of replacement heifers that are needed. There is some room to affect cow culling and the number of lactations they stay.

Given the options of conventional, sexed and beef semen (and embryos), dairy producers and their advisors are also rethinking how to best use these semen types in their heifers and cows. For example, a popular and simple strategy is to use sexed semen on all heifers and some first lactation cows, then use beef semen on all older cows. In this system there is no use of conventional semen and no consideration of individual genetic merit. Dairy heifer calves are obtained from younger and generally genetically better dams. The number of dairy heifer calves made is sufficient to replace cows in the future assuming a given annual cow cull rate. Clearly, if cows stay more lactations, fewer dairy heifer calves are needed and more beef semen could be used.

A simple economic model

The lowest possible annual cull rate, which would result in the greatest average number of lactations, is not necessarily the most profitable. What follows is a simple model that illustrates the impact of five key drivers on the cost of herd structure. Herd structure is here defined as the demographics of cows in the herd by age. A high annual cull rate leads to a greater fraction younger cows and fewer older cows than a low annual cull rate. Maintaining a herd structure has a cost per cow per year. The cost is the sum of either expenses or opportunity costs. The limiting factor in this simple model is a cow place or slot. The goal is to maximize profitability per cow place per year. This is equivalent to finding the herd structure that results in the lowest herd structure cost per cow per year. The annual cull rate which results in the lowest total herd structure cost is, in theory, the economically optimal annual cull rate. Hence, the economically optimal average number of lactations is determined. The model assumes that one lactation is one year. The risk of culling is assumed to be the same in every lactation. Annual cull rates are varied from 10% to 50%, which drives the frequency of cows in each lactation. An earlier version of this simple model was first described in De Vries (2020). The results are in USA dollars. Today, 1 USA dollar equals approximately 0.74 Pound sterling. Caution, the results aim to assist our thinking about the optimal number of lactations, but are not intended to be prescriptive.

Herd replacement costs

The first driver are herd replacement costs. Cows depreciate in value from first calving to the time of exit from the herd. In the USA, typical costs to obtain a calving heifer are $1,800. If the average income for a cow that leaves the herd is $800, then the depreciation costs are $1,000. Longer productive lives means that depreciation costs can be spread out over more lactations. The greater the average number of lactations, the lower the herd replacement costs per cow per year.

Lack of maturity costs and aged cow costs

The second and third drivers are related. The idea is that mature cows are the most profitable when considering milk sales and feed cost. Mature cows in this simple model are cows in their fifth and sixth lactation. In order to become mature, cows have to move through the first four lactations. Lack of maturity costs are the result of young cows in the herd that are not mature. These are opportunity costs. For example, first lactation cows may generate $500 less per year than mature cows. Aged cow costs are opportunity costs of keeping cows in the herd that are past maturity. In this simple model these are cows older than 6 years. Aged cow costs are difficult to estimate because few cows become aged and they are the survivors of earlier culling pressure. Therefore, the expected performance of aged cows is biased. Given the aged cow opportunity costs, one could cull all old cows, except that would increase herd replacement costs. Zero aged cow costs is therefore not necessary optimal.

Calf value opportunity costs

An advantage of a low annual cull rate is that fewer dairy heifers need to be made to replace culled cows. This allows more breeding for more valuable calves for sale, such as beef-on-dairy to produce crossbreds. The calf value opportunity costs are therefore greater with higher cull rates. This driver ought to include the genetic value of the dairy heifer calves that are made. Making fewer dairy heifer calves allows for greater selection intensity of the dams. On the other hand, a low annual cull rate results in fewer younger and higher genetic merit dams. Genetic value of calves is not included in the simple model.

Genetic opportunity costs

Genetic opportunity costs occurs when the herd is genetically older. Better genetics is only slowly brought into the herd. This delay causes opportunity costs. Because of genetic progress in sires, younger cows are on average genetically better than older cows. The rate of genetic progress has approximately doubled since the introduction of genomics a decade ago. This implies that the genetic opportunity costs have doubled compared to a decade ago. Genetic opportunity costs are never zero because of the time lag between the availability of high genetic merit sires, the lower genetic merit of females in the herd, and the almost three years between insemination and the start of milk production of the daughter. Genetic opportunity costs are greater with a lower annual culling rate. A review of the literature of more sophisticated cow culling models suggests that the annual cull rate should increase at most a few percentage points when the rate of genetic progress is doubled (De Vries, 2017).

Other drivers towards a five lactation average

Adding the five drivers together with reasonable estimates gives the total herd structure cost in Figure 1 (see below). In this figure, the lowest herd structure cost is obtained with an annual cull rate of 25%. The opportunity costs from cull rates other than 25% are the blue line.

Figure 1: An illustration of five key drivers of the total cost of maintaining herd structure, in $/cow/year: herd replacement costs, lack of maturity costs, aged cow costs, calf value opportunity costs, and genetic opportunity costs. The optimal herd replacement rate is the one where the total cost is the lowest; 25% in this example. The opportunity cost from economically optimal is the increase in cost per cow per year from the optimal herd replacement rate in the blue line.

Other drivers of the desire to increase the number of lactations to five may not be directly financial, but nevertheless important for society at large (De Vries and Marcondes, 2020). For example, greenhouse gas emissions per unit of milk are lower with more lactations per cow because fewer heifers need to be raised. In addition, a relatively short length of life compared to the natural lifespan, and a majority of culling reasons that suggest health problems, may be undesirable to consumers.

Decision support

The main limitation to obtaining the five lactation average cow may be failure, or reduced performance, of too many cows. Genetic improvement and good management should be able to reduce these culls. On the other hand, optimal culling decisions are not necessarily intuitive to make. There is evidence that different dairy producers would not cull the same cows presented to them. Financially, it could be advantageous to keep cows longer or shorter, for example by treating a sick cow instead of culling her, or by culling a cow that is a low producer but otherwise healthy. Although many cow replacement decision aids have been developed in the past, with more or less accuracy, little has been implemented. To move to a five lactation average also includes revisiting and developing better decision support aids (De Vries and Marcondes, 2020). We are currently developing such aids.

Take home messages

The average number of lactations in the UK is approximately 3.6. A fifth lactation average implies that most UK farms would need to reduce their cull rate. Cows in their fifth lactation are mature and the most profitable in terms of milk sales and feed cost. However, the risk of culling increases with age, in part because of more health problems, including failure to conceive, and defects such as lameness and udder conformation. Increasingly cows are culled to make room in the herd for calving heifers. Dairy producers need to rethink the number of dairy heifers they need. This is easier said than done if one accepts that culling is in part driven by people making economic decisions. A simple model shows five drivers of the optimal number lactations. Using realistic inputs, the optimal cull rate is often lower than is observed in practice, suggesting that a five lactation average is an economically sound goal. Finally, there is a need for quantitative decision support aids to help dairy producers make better culling decisions. Collectively, the five lactation average maybe within reach.

References

De Vries, A. (2017). Economic trade-offs between genetic improvement and longevity in dairy cattle. Journal of Dairy Science, 100: 4184–4192. https://doi.org/10.3168/jds.2016-11847

De Vries, A. (2020). Symposium Review: Why revisit dairy cattle productive lifespan? Journal of Dairy Science, 103: 3838–3845. https://doi.org/10.3168/jds.2019-17361

De Vries, A. and Marcondes, M. (2020). Review: Overview of factors affecting productive lifespan of dairy cows. Animal, 14: S1,s155–s164. https://doi.org/10.1017/S1751731119003264

Professor Albert De Vries
Department of Animal Sciences, University of Florida, Florida, USA