INTRODUCTION:
The decision which cows to own and breed from is one of the most
critical in the dairy industry since for most breeders the cows are
expected to pay the bills. Whether the choice made is to focus
selection on animals excelling in production, type or a combination of
the two, means must be available not only to identify animals with those
traits, but also to constantly evaluate the appropriateness of their
choice in terms of the bottom line for most breeders--profitability.
Whereas individuals high in the production, or type categories are quite
quickly identified by our present ranking systems (milk recording,
BCA's, classication, shows), those animals which quietly 'stack up'
the profits by combining efficient production and type characteristics
in a relatively maintenance-free, long-lasting package are largely
unrecognized-- the means to assess their profitability as yet
unaddressed. The purpose of this paper is to propose a means of
attaching actual $ values to an animal's lifelong achievements--such a
system thus not only providing grass-roots dairymen with a powerful
management tool in identifying their most profitable animals, but also a
tool for all dairymen in evaluating the appropriateness of their own
particular emphasis on 'desirable' production and type traits. Intended
to complement, rather than replace, existing systems, the prototype
herein described is designed first and foremost as a basic management
tool for any dairyman, whatever his focus. Its potential to yield more
far-reaching 'payback' benefits is an extra that can be explored later.
A LOOK AT
THE PROTOTYPE:
(In this case, for easier display, figures used are Ontario averages)
In actuality, sets of numbers for expenses, income etc are required
from two sources:
l. national averages and actual ODHIC values
2. numbers from the individual farm - for that farmer's own use
(the more numbers from individual farms that are provided, the more
accurate evaluations will be as an aid in answering current questions)
N.B. Optional provision for the breeder to enter specific values
customizes this system for the individual herd allowing room to input
differing $ values depending on the level of efficiency and focus toward
commercial or purebred (ET,show etc). Since these values are not as
relevant to the majority of breeders, they would not be included in the
overall numbers but could be of use analyzed as a separate group in
other calculations geared more for pedigreed breeders' purposes.
Expense and Income Categories to Calculate:
l. Rearing &/or purchase cost: i.e. accumulated cost upon
entering the milking row
- based on lst calving date and OFMAP avg rearing cost to 24 mos of
age
- $1500 + $3 a day (the 'average' Ontario heifer 'owes' $1679
by lst calving time)
2. Lact Overhead Costs: i.e. housing, hydro, equipment etc.
-based on the OFMAP avg cost per cow of $3.21 per day
3. Lact Maintenance Feed Cost
-to keep animal alive each lact after lst calving
-based on the OFMAP avg cost of $1.66 per day
4. Lact Marginal Feed Cost:
-to support milk production
-based on OFMAP avg cost of $2.31/kg fat
5. Lact Health Costs:
-to help determine if there is a genetic basis (as many suspect), it
is necessary to record health traits and their costs in some way for
further study such as:
i. Normal Calving, Live calf, Bull : $0 Cost
Heifer: $0 Cost
ii. Difficult Calving: Cost = vet fees including caesarian etc
iii. DA's: Cost = vet DA fee + cost of lost production (currently
bridged)
iv. Mastitis, mild case (approx 2 tubes & 4 days milk lost): Cost
= $100
acute case with vet care: Cost = up to $500
6. Lact Quota Opportunity Cost:
-interest cost (not principal) for the amount of quota necessary to
support the cow's level of production (to ensure that high production
animals are not given an unrealistic advantage)
7. Lifetime Lactation Expense: the total of Expenses for the
Individual Lacts
(#2+#3+#4+#5+#6)
8. Lifetime Total Expense: Rearing/purchase cost + Lifetime Lactation
Expense
(#1) (#7)
9. Lactation Milk Value
-gross value of milk produced
i.e. the Ontario price for milk components minus deductions
l0. Lifetime Milk Value:
-accumulated value of milk produced in lifetime to date
l1. Lactation Progeny Value:
-entered as average values: bull $100, heifer $250
-opportunity for breeder to enter realistic individual values
(this can also include value of ET offspring as long as all ET
expenses have been
deducted first)
l2. Lifetime Progeny Value: cumulative
l3. Salvage (or Resale) Value: (projected figures if actual not
available)
Beef Purposes - 36 mo value (determined by 'taping' at closest test
or using size classification values to estimate)
Dairy Purposes - it is important that only realistic numbers
be entered by the individual breeder
l4. Lifetime Total Value: Lifetime Milk(#10) + Progeny(#12) +
Salvage(#13)Value
l5. Net Income: Lifetime Total Value(#14) - Lifetime Total
Expense(#8)
- the number that indicates which cows are profitable
- can be used in the herd's managment & breeding program to
improve 'bottom line'
POSSIBLE
ADVANTAGES OF THE ABOVE PROTOTYPE SYSTEM:
l. To encourage the breeding of profitable cows!
2. Will provide dairy farmers with a much better tool to make
management decisions
3. Should be a strong encouragement to maintain breeders on test and
encourage new people to get involved
4. Should provide concrete numbers to solve age old debates on which
type traits are the most profitable e.g. size (which is more profitable?
a 1600 lb or 1200 lb cow?)
KEY PROBLEM
AREAS WHICH COULD BE ADDRESSED:
l. Cull Rates: In the present method of calculating proofs, an animal
culled before 90 days is ignored-- if after 90 days, her lactation
results are prorated
i.e. weighted according to the # of days actually completed. Thus her
negative influence on the sire's proof is only partially weighted--the
earlier identified as unsuitable and subsequently culled, the less the
influence.
What this means is that present bull proofs are based on a system in
which it can take at least 4 daughters culled between 90-200 days to
have the same amount of weighting as 1 daughter who lives to complete 3
lactations.
With this 'payback' system, however, each daughter culled would leave
with a net income value on her final day whether it was at 10 days
fresh, or after 3 or even 12 lactations. This value would be included in
her sire's proof.
2. Calving Interval and Reproductive Efficiency:
Currently, calving interval is not considered in our BCAs, cow
indexes or bull proofs. With this system, it would automatically be
calculated into the net income value of each cow and the average
calculated into that of her sire.
3. Longevity: Many breeders now base their decision-making on the assumption
that good type as it is now defined results in increased longevity and
therefore, greater profits. When this system is used in conjunction with
our elite classification system, numbers will be available to actually test
the above theory giving further insight into the type traits most
necessary for the balancing of production and longevity to achieve
maximum profitability.
4. Health Traits:
Predominantly unexplored here in Canada, health is an area that other
countries are already dealing with at various levels-- we need to get
started. This system could be used to gather information and determine
the genetic correlations and financial returns.
5. Age at First Calving:
The trait for producing growthier and faster maturing daughters (who
can thus enter the milk row sooner) needs to be identified and the
appropriate sires rewarded.
6. L.P.I. and T.E.V:
These are based on theoretical future values and are not always
relative to the animals that are making the farmer money in the barn
today.
This system is based on actual $.
HOW TO USE THE
NUMBERS GENERATED BEYOND IMMEDIATE MANAGEMENT AND RESEARCH?
l. Identification and Rewarding of Top Cows:
The identification of 'elite' cows would yield much truer results if
evaluation for county awards, honor lists etc was based on net income
(at 36mos, 48 mos, 60 mos,etc...,lifetime) rather than using BCAs or
deviations etc.
2. Identification of Top Bulls:
Although not meant to replace listings for other purposes, this
system could be more useful than current lists (LPI or TEV) in selecting
bulls to supplement particular traits. Bull proofs would be based on
daughters' average net income values at 36, 48, 60 mos etc instead of
lst, 2nd, 3rd lacts etc.
These proofs would automatically identify the bulls whose daughters
were the most profitable based on
i) Production -- under today's payment program
ii) Type -- since the % of 3rd lact daughters is the largest
determinant of profitability
iii) Cull Rates -- since every animal culled will have a net income
value to include in proofs
iv) Calving Interval
v) Health Concerns --- these are calculated into every cow's
vi) Age at lst Calving net income value
N.B. This system was designed to complement current type or
production proofs, not replace them. Instead of taking anything away
from cows and bulls already high on today's ranking lists, it will
identify a third important group of animals very important to most
breeders, but sometimes missed in today's rating systems -- those
selected for profitability!
CONCLUSION:
This approach may do more than anything yet to encourage dairy
farmers to breed cows that are not only high-producing, but made
correctly to last over many lactations with relative ease of management.
Moreover, once these profitability numbers have been generated, their
analysis could be extremely useful in aiding producers to find answers
to many other relevant questions.
Canadian breeding philosophy has always emphasized that the most
profitable animal is the one combining high production with high type
i.e. the 'type' that enables this production and reproduction over a
long period of time with relative ease of maintenance. At present
though, too many ambiguities and inconsistencies arise when comparing a
cow's production (BCA) and classification scores with her ultimate
profitability (in terms of lifelong contribution through milk,
offspring, resale value etc). True justification of the Canadian
balanced breeding approach is only possible when it is ensured that the
measurement tools used really do represent accurate gauges of profitable
production and the type that enables it. The purpose of this
proposal is to suggest that if these tools could be developed to work
'in synch' actually reflecting realistic DOLLAR VALUES, then the
relatively small hassle and cost of the development of such a system
would be more than justified by the enormous benefits it could supply
not only as a day-to-day management tool for profitable dairy herd
operation, but equally important, as a cornerstone for genetic
improvement geared towards the same profitability.
Lloyd Wicks
Grasshill Farm Ltd.
102 Kenstone Beach Rd.
Bobcaygeon, Ontario, K0M 1A0
phone: (705) 738-2787
fax: (705) 738-4580
email: grasshil@peterboro.net
Example:
Lloyd
& Barbara Wicks