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What is the best replacement rate for your dairy?

Dairy farms with a goal of raising a cost-effective number of replacement cows know it’s expensive to raise more heifers than needed. The University of Minnesota FINBIN database shows that the average cost to raise a heifer was over $2100 in 2022. Estimates show that replacement costs average about 20 percent of the overall operating cost of a dairy, the third largest cost behind feed and labor.

Every time a cow is culled the dairy producer incurs a cash cost, which is the price of the replacement animal minus the salvage value of the culled cow. This number has decreased recently because of the high value of cull cows. Even with higher springing heifer values, it’s still not profitable for most farms to raise excess replacements.

Cull rates will vary

The optimum cull rate in every herd is going to vary depending on factors including goals, replacements available, current, and future herd dynamics (growing, shrinking or stable), capital available, milk price and cull cow value. The goal should be to fill the pens so that each pen is maximizing income over feed cost. It’s also important to think about the future productivity of the animals in the pen. 

Farmers can be challenged to reach an optimum cull rate based on a specific benchmark. High-performing farms may be able to achieve a 25 percent cull rate, but that is the exception. Even though models show that having a higher percentage of cows in later lactations is more profitable than a young herd with a higher cull rate, it may not be the best strategy for your farm or management style. Many farmers are very profitable and successful with a little higher cull rate. 

How to come up with a replacement strategy?

Cull rate can be a little misleading because it does not indicate why or when the cows were culled. To find out how your operation is truly performing you must know when and understand why cows are culled. Below is a process that might help you think about the best replacement strategy for your farm.

  1. Think about each cow as a potential profit generator. The goal is to fill the barn with cows that will generate the most profit. This includes not only milk production but also cows that are trouble-free. In concept, replace a cow anytime her replacement is likely to be more profitable.
  2. Evaluate early lactation cull rate. Early lactation culls are expensive and almost always culled because of transition disease or injury. A good goal is for less than 8 percent of cows to leave less than 60 days in milk.
  3. Evaluate forced cull rate. If forced culling is high due to mastitis, infertility, lameness, or other health reasons, management should evaluate what steps can be taken to minimize the risk of culling in the future. 
  4. Evaluate the voluntary cull rate. Consider culling cows with below-average production or that could be replaced with an animal of higher potential. These could also be cows that have a history of chronic health conditions or are challenging to work with. In robotic milking herds, these could be cows that milk slowly or that the robot has a difficult time attaching to. 
  5. Evaluate replacements available and required in the future. Identify potential gaps and excesses over the next couple of years. Most of the AI companies have excellent models that can predict future heifer numbers.
  6. Then determine a replacement strategy based on a target cull level for the herd and include a few spares as an insurance policy. Work with your management team to develop a breeding strategy with the best mix of conventional, sexed and beef semen to hit the target number of replacements needed.

The optimum replacement rate is different across farms. Rather than targeting a specific replacement rate, management should evaluate the timing and reasons for culling. Work with your management team to determine the best replacement strategy based on your goals and management style. Farms can be successful with a wide range of replacement rates if it is for the correct reasons. 

Author: James Salfer, Extension dairy professor


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