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Heifers and economics: Is raising excess heifers hurting your bottom line?

Kelli Boylen for Progressive Dairyman Published on 06 May 2019

“Over the past decade, it’s now become common to have more replacement heifers than needed. Trying to balance those numbers all the time is not a simple equation,” says Leo Timms, dairy specialist and Morrill professor at Iowa State University.

“Everyone thinks that sexed semen is the major reason,” he says. “But that is just a small piece of it.” Timms says increases in pregnancy rates, lower mortality rates and an earlier age at first calving all have resulted in “more calves on the ground.”

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Nationally, the pregnancy rates have gone up from 12.4 percent in 2010 to 18.8 percent in 2018.

Early on there was an 8 to 15 percent lower conception rate with sexed semen and a $10 to $20 higher investment per insemination. “Because of this, most sexed semen was targeted toward heifers (higher fertility) in order to optimize returns,” Timms says. “Recent advances have narrowed the conception rate differences. Our recent surveys show many herds using it on cows as well as heifers in order to maximize females from selected high-genetic animals in their herds (returns worth far more than extra costs). Many of these herds have also made decisions to crossbreed lower-genetic-value animals to beef to optimize calf income.”

Total cost to raise a dairy replacement from birth to freshening

To maintain a static herd size, Jennifer Bentley of Iowa State University Extension offers the following equation: HS x (AFC / 24) x CR x (1 + NRC). Or, to state in an expanded version: herd size x (age at first calving / 24) x culling rate of herd x (1 + non-completion rate, which is mortality and heifers culled.)

For example, a herd of 100 cows that has an age at first calving of 23 months, a cull rate of 35 percent and a non-completion rate of 10 percent sets up as 100 x (23 / 24) x .35 x (1 +.10), equals 37 heifers each year or 74 replacements at one time.

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A herd of 500 cows with an age at first calving of 25 months, a cull rate of 30 percent and a non-completion rate of 12 percent sets up as 200 x (25 / 24) x .30 x (1 + .12) = 174 heifers each year or 349 replacements at one time.

So how many heifers should a dairy producer expect from his or her herd? Timms offers the equation of HS x (12 / CI) x SR x (1 - CM) x (AFC / 24). Or, to state in an expanded version: herd size x (12 / calving interval in months) x sex ratio of calves born alive x (1 - calf and heifer mortality) x (age at first calving / 24).

For example, a herd with 100 cows has a calving interval of 13.5 months, a sex ratio of 65 percent heifers (some use of sexed semen), a calf and heifer mortality of 7 percent and age at first calving of 23 months. This sets up as 100 x (12 / 13.5) x .65 x (1 - .07) x (23 / 24) equals 51.5 heifer calves available each year.

Replacements: to raise for sell as springer

A herd of 500 cows with a calving interval of 15 months, a sex ratio of 49 percent heifer calves, a calf and heifer mortality of 5 percent and an age at first calving of 24 months equates to 500 x (12 / 15) x .49 x (1 - .05) x (24 / 24) equals 221 heifer calves available annually.

“Raising replacements is the second- or third-highest cost on an operation, second only to feed (and possibly labor) costs,” says Timms, noting the need for good information to make good decisions about raising replacements.

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The price of replacements closely correlates with the price of milk, says Timms. For about the last five years, it has cost more to raise replacements than they can be sold for.

Timms’ colleague at Iowa State University, Larry Tranel, created a publication for budgets on the costs of raising heifers available online (Heifer raising costs in 2019).

Feeding 6 tons of dry matter over 24 months per heifer costs $1,167 (using corn at $3.25 per bushel, $140 per ton for hay and 18 cents for supplements). Livestock costs (hauling, veterinary, breeding, marketing, bedding, fuel, utilities, etc.) adds another $240.62, and facilities and equipment is estimated at $240.62. This totals $1,672.02 or about $2.30 per day or, with labor added in, it is $2.67 per day, says Tranel.

He adds for producers selling raised heifers, an additional $110 needs to be added in for interest on investment and the initial calf value of $175 creates a breakeven sale value of $2,241 for a heifer calving in at 24 months.

“Reducing the heifer-raising period from 24 months to 23 months saves approximately 93 dollars per heifer,” Tranel says. “For a 100-cow herd raising 40 replacement each year, this savings would equal 3,720 dollars per year.”

He also explains that a 10 percent reduction in the cull rate would further reduce heifers needed by four, thus reducing heifer-raising costs by another $7,892 ($2,148 - $175 calf value equals $1,991 x 4. The $2,148 figure is the cost of raising a heifer to 23 months instead of the total estimated costs of raising a heifer to 24 months.)

Timms says key performance indicators to watch for are the survivability from birth to weaning and freshening along with age at first breeding and age at first calving. Dairy Calf and Heifer Association (DCHA) targets for heifer calf survivability are better than 97 percent and better than 90 percent from birth to weaning and freshening, respectively. Age at first calving targets are 24 months (can be 21 to 24 months if heifers are grown properly, including early structural growth). The keys are doubling birthweight from birth to wean followed by proper growth rates for both weight and stature. This can lead to animals being properly grown to start breeding at 12 to 13 months old.

Less than 10 percent of matings in a given herd should be to any one bull, says Timms. “This enhances the opportunity to optimize genetic improvements while minimizing risks. With potential for excess females or replacements, producers should consider methods to select the best females to raise replacements from. In the past, this was often based on genetic parent averages (PTA). Today, the potential use for genomics or genetic information enhances the accuracy and reliability of parental genetic information,” he says.

Timms says there are four ways to use genomics on your farm starting now. Initially producers were simply trying to identify elite bulls or cows as bull mothers (still an option including identifying genetic defects). A second use is animal ID and parentage verification (Is this the animal I think it is?). On an overall herd basis, it can be used to select the best (genetically superior) dams for mating herd replacement selections while also defining lower-genetic females than can be crossbred to beef, or make earlier culling decisions on cows as well as young replacement animals.

“In order to get more herd-basis success, a larger population of animals (even whole herd) need to be tested. At an average cost of 40 to 50 dollars, this concerns many, especially with tight margins and the time it takes to recognize this genetic success,” says Timms. Herds that have done this exceed industry breed genetic gains while also optimizing their culling decisions.

With excess replacements as an issue, many dairy producers are breeding lower-genetic-merit cows to beef bulls. Beef-cross calves are valued higher compared to dairy calves, thus enhancing income from excess calves. Timms notes that very little has been studied of what is the best dairy/beef cross and notes both individual breeding companies and national councils on dairy and animal breeding are currently examining and researching these opportunities in terms of initial fertility, calving ease and survivability, rates of gains, and carcass performance and traits. Management and marketing timing practices will also have to be optimized to capture these genetic assets.  end mark

Kelli Boylen is a freelance writer based in northeast Iowa.

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