Economics of Using Bovine Somatotropin in Dairy Cows and Potential Impact on the US Dairy Industry

Abstract

Budgets with a microcomputer spreadsheet were developed to evaluate the economics of bovine somatotropin use and to estimate the impact on US dairy cow numbers. Income over feed and variable costs increased with somatotropin use and low feed prices. With high feed prices, income responses were less favorable, and when combined with low milk prices, somatotropin use resulted in less income than from control cows. Price of somatotropin did not have a major effect on production costs. The number of cows needed to meet US milk requirements is primarily influenced by per capita consumption and production per cow. With continuing yearly increases in per capita consumption of 2kg of milk equivalent and cow milk yields of 114kg, the number of milk cows needed through 1992 remains at the 1987 figure of approximately 10.3million. In the scenario of a 15% increase in milk yield due to somatotropin, 20% of cows receiving the hormone, and cows receiving the hormone being 10% above the national average of all cows; the number needed in 1992 is 9.77million, or a drop of 5.4% from 1987. Somatotropin use will have a less drastic effect on cow numbers than originally predicted.