Economic Analysis Tools for Dairy Reproduction Programs

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This material was presented by Dr. Victor Cabrera for DAIReXNET on Monday, April 8, 2013. For more information, please see our archived webinars page at www.extension.org/pages/15830/archived-dairy-cattle-webinars.

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Economic Analysis Tools for Dairy Reproduction Programs

  1. 1. Economic Analysis Tools for Dairy Reproduction Programs Victor E. Cabrera University of Wisconsin-Madison DAIReXNET Webinar Series, 8 April 2013
  2. 2. Rationale• Herd profitability depends on reproductive efficiency, but relationship is highly complex• Reproductive performance can be measured (e.g., 21-d pregnancy rate)• Costs of reproductive programs can be calculated (e.g., cost per pregnancy)• But, it is difficult to measure its full economic impact (e.g., profitability)
  3. 3. Profitability of reproduction• Simulate herd structure in response to a reproductive program• Calculate the expected net return under different reproductive performances (De Vries et al., 2010; Fricke et al., 2010; Cabrera, 2011)
  4. 4. Evaluation of repro programs • Analyze specific reproductive programs • Impact of reproductive management strategies on ad farm-by-farm specific basis (Giordano et al., 2011; 2012; 2013; Kalantari and Cabrera, 2012)
  5. 5. Individual cow management• Not all cows have same reproductive value within a herd• Opportunities for individual cow decision-making exist (Cabrera, 2012)
  6. 6. DairyMGT.info
  7. 7. Profit of improving pregnancy rate $20/cwt milk • Improving reproductive efficiency improves returns (Fricke et al., 2010) $15/cwt milk • Reproductive efficiency improves overall profit (De Vries, 2010; $10/cwt milk Giordano et al., 2012; Kalantari and Cabrera, 2012) • Law of diminishing DairyMGT.info/markov marginal net returns
  8. 8. Profit of improving pregnancy rate Expected additional net return ($/cow per yr) response to increased 21-d pregnancy rate.• Higher gains are due 21-d Income over Repla- Repro- Calf Overall Net to improved milk Pregnancy Rate, % feed cost cement ductive cost cost return Return income over feed 10 to 11 11 to 12 19.42 18.28 1.14 1.28 6.10 5.60 5.25 4.84 32 30 cost 12 to 13 13 to 14 17.18 16.13 1.36 1.42 5.17 4.79 4.48 4.16 28 26 14 to 15 15.12 1.44 4.45 3.87 25• Other important 15 to 16 16 to 17 14.17 13.26 1.45 1.43 4.15 3.88 3.60 3.36 23 22 factors: savings in 17 to 18 18 to 19 12.41 11.62 1.41 1.37 3.64 3.42 3.15 2.95 21 19 reproductive costs, 19 to 20 20 to 21 10.87 10.17 1.33 1.28 3.23 3.05 2.77 2.60 18 17 return for additional 21 to 22 22 to 23 9.52 8.91 1.23 1.17 2.88 2.73 2.44 2.30 16 15 calves, and savings in 23 to 24 24 to 25 8.34 7.82 1.12 1.06 2.59 2.46 2.17 2.05 14 13 replacement costs 25 to 26 26 to 27 7.33 6.87 1.01 0.96 2.34 2.23 1.94 1.84 12 12 (Cabrera, 2011) 27 to 28 6.45 0.90 2.13 1.74 11 28 to 29 6.06 0.85 2.03 1.65 11 29 to 30 5.70 0.80 1.94 1.57 10 DairyMGT.info/markov
  9. 9. Make your own analyses“Dairy Reproductive Economic • Enter farm-specific Analysis” online tool information: – Milk production – Culling rates – Abortion rates – Prices and costs DairyMGT.info/markov • Run model • Compare scenarios
  10. 10. Farm specific analyses• Value of a reproductive program assessed by : – Simulating reproductive performance along with – Estimating net returns (Giordano et al., 2011; 2012; 2013; Kalantari and Cabrera, 2012) DairyMGT.info: Tools: UW-DairyRepro$Plus
  11. 11. Farm specific analyses• Different herds with different repro programs can have same performance• Same repro program in different herds can have different outcomes
  12. 12. Farm specific decision-making• Include, exclude, or • Introduce the use of change level of TAI chemical pregnancy or HD (Giordano et al., 2011) test (Giordano et al., 2013)• Manipulate IBI for • Assessing the cost TAI programs (Giordano et al., benefit of 2012) introducing HD• Start re- devices synchronization before pregnancy diagnosis
  13. 13. Introducing heat detection devices• Increasing the percentage of cows bred in estrus from 50 to 80% increased the 21-d PR by 2%, and• Would translate in $22,000/year of additional profit in a 1,000-cow herd DairyMGT.info: Tools: UW-DairyRepro$Plus
  14. 14. Heat detection between syncs 42 d 30% • Adding 30% CR of 50% ED improves 45% profit? 82 d • No gain / No loss • Only before first TAI: Loss • Only after first TAI: GainDairyMGT.info: Tools: UW-DairyRepro$Plus
  15. 15. Earlier chemical pregnancy test• Between $40 and Effect of shorter interbreeding intervals (IBI) when conception rate was 35% $60 additional profit to 1-week shorter interbreeding interval (between 9 and 4 weeks)• However, earlier RP=rectal palpation pregnancy tests has TU=transrectal ultrasound CT=chemical test inaccuracies and is affected by early Giordano et al., 2013 pregnancy losses DairyMGT.info: Tools: UW-DairyRepro$Plus
  16. 16. Earlier chemical pregnancy test Value of using chemical test (CT) for earlier pregnancy diagnosis Giordano et al., 2013 DairyMGT.info: Tools: UW-DairyRepro$Plus
  17. 17. Make your own analyses DairyMGT.info: Tools: UW-DairyRepro$Plus
  18. 18. Individual cow decision-making• Every cow has a • Critical concepts: different contribution – Economic value of a dairy cow (Eicker and Fetrow, 2003; Groenendaal et al., 2004)• After best repro – Retention payoff (De Vries, program: individual 2004; Kalantari et al., 2010) cow management – Value ranking of cows • Crucial reproductive• Fine-tune individual decisions: cow reproductive – Breeding, VWP, DNB, … management
  19. 19. Determining the value of a cow $300 $250 $200$/cow per mo Value of cow = $328 $150 $100 $50 Evaluated Cow Average 2nd lactation 10 mo after calving $0 4 mo pregnant -$50 Replacement -$100 1 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 Months in the future Cabrera, 2012. DairyMGT.info/tools/cow_replacement/
  20. 20. Meaning of value of a cow• Positive: • Negative: – Cow provides more – Herd will have higher profit than potential profit with a replacement replacement – Relative cow value to be used for: • Ranking Vs. • Treating • Better reproductive management
  21. 21. Value of a cow illustration• Open cow 2nd lactation average production cow – Decreases – Becomes negative• Pregnant cow – Higher than open – U-shaped – Similar value at calving DairyMGT.info/tools/cow_replacement/ MIM = month in milk.
  22. 22. The impact of milk productivity 2nd lactation open 2 mo pregnant, 10 mo lactating DairyMGT.info/tools/cow_replacement/
  23. 23. Illustration of possible cow value repro management decisionsCow Value MIM MIP Manager Possible Reproductive Decision High 1 0 Consider enlarging voluntary waiting period Low 1 0 Consider shorten voluntary waiting period High 9 0 Keep breeding for at least 3 more services Low 9 0 Label do-not-breed and replace next monthVery High 3 0 Use better quality semen or female sexed semenVery Low 3 0 Consider embryo transfer or using male sexed semenVery High 4 1 Consider sooner pregnancy diagnosis confirmationVery Low 4 1 Consider replacement if negative cow valueVery High 10 5 Consider sooner pregnancy diagnosis re-confirmationVery Low 10 5 Consider replacement after calvingMIM = month in milk. MIP = month in pregnancy.
  24. 24. Make your own analyses • Critical variables: – Evaluated cow – Replacement • Important variables – Herd production – Herd reproduction – Prices and costsDairyMGT.info/tools/cow_replacement/
  25. 25. AcknowledgementProject supported by the Agricultureand Food Research InitiativeCompetitive Grant No. 2010-85122-20612from the USDA National Institute of Foodand AgricultureProject also supported by Hatch projectto V.E.C. WIS01577
  26. 26. Thanks© 2011 Wisconsin Milk Marketing Board, Inc.

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