Revealing the Effects of Reproduction and Turnover Rate on Farm Profitability through Herd Structure Dynamics

Abstract

Dairy herd structure influenced by reproductive performance and herd turnover rate affects the whole farm profitability because each group of animals has a distinctive production efficiency reflected in costs and revenues. The objective of this study was to reveal the interactions among reproductive performance, turnover rate, herd structure, and farm profitability. A monthly Markov chain model was used and updated with a newly developed heifer module. A 1,000-Holstein herd producing 10,442kg/ cow per yr in the US was simulated as the baseline herd, reaching steady-state with 45% turnover rate (TR), 16% 21-d pregnancy rate (21-d PR), and 0% voluntary calf culling rate (VCC). The baseline herd was imposed 25% TR or 40% 21-d PR and VCC combinations to maximize net return or breakeven the demand of replacements. Results showed that lower TR slightly increased net return primarily due to lower replacement demand, increased cow longevity, and had minor impacts on lactating and pregnancy statuses. Higher 21-d PR improved reproductive efficiency, placed more multiparous cows in earlier stages of lactation, and generated a larger number of replacements. Under current market conditions, if calves were not voluntarily culled, it led to considerable replacement rearing, decreasing net return. The combined strategy of 25% TR, 40% 21-d PR and 44% VCC increased net return by $16/cow per mo. Additionally, this strategy decreased percentage of youngstock (44.3% to 34.4%), reduced lactating herd average DIM (187 to 169) and increased herd average longevity (49.7 to 81.6 mo). Sensitivity analysis indicated that milk price significantly affects farm profitability regardless of herd structure. The optimal VCC to maximize net return highly depends on heifer rearing cost and market springer price. VCC could be 0 when the on-farm cost of raising a springer outnumbers selling price, or 100% otherwise. However, the minimum number of heifers for herd turnover should be raised on-farm considering biosecurity and sustainability under any market conditions.For practical utilization of the model developed for this research in commercial farms, target values of the combined strategy could be imposed progressively to alleviate volatility of net return in the short- and medium-term (6 to 34 mo), but still reach the same herd performance and economic outcomes in the long-term.