Success StoryEconomic Impact of Dairy Heifer Rearing Programs on a Dairy Business



Economic Impact of Dairy Heifer Rearing Programs on a Dairy Business

Author: Donna Amaral-Phillips

Planning Unit: Animal and Food Sciences

Major Program: Dairy

Outcome: Intermediate Outcome

Reduced milk and salvage dairy cow prices, caps placed on marketable milk volumes, increasing milk hauling costs, and increasing input costs have strained cash flow on many dairy businesses.  Dairy producers have already trimmed expenses in obvious areas, such as feed, and restructured debt, if possible.  To facilitate further improvements in financial efficiency, producers need to examine if financial improvements can be made in the replacement dairy heifer enterprise. Costs associated with rearing replacement heifers represent 15 to 20% of the total cost of producing milk and carrying more heifers than needed puts financial strains on the dairy business.  Producers routinely do not review heifer raising costs since they are included in expenses associated with the entire dairy enterprise.  By separating these expenses from those associated with the lactating herd, cost efficiencies, or lack thereof, can be detected and changes made, if needed, to improve financial stability.  Although financial considerations are a cornerstone of all businesses, farmers are generally unwilling to share these numbers, never mind spend time calculating costs associated with this component of a dairy enterprise.  To get producers to examine their own cost to raise heifers and whether they are raising the appropriate numbers for their operation, meetings along with articles in various KY Extension publications were used.  As an outcome from this program, attendees actually reviewed the number of heifers needed and made plans to make changes.  Others calculated their cost for raising heifers at $1340 to $1500 per springing dairy heifer accounting for housing, feed, labor and other variable costs, which was not done previously.  By calculating costs to rear replacement dairy heifers, dairy farmers can better use their financial resources.






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