At first glance, it would seem to make sense to cull the cows—especially open cows—who are lower-end producers and whose feed costs are higher than herd average.
But in tight times like these, what looks like a no-brainer takes a bit more pondering in order to arrive at the right economic decision, says Albert De Vries, a dairy specialist with the University of Florida.
That's true if your barn is not overstocked, and particularly true if you have empty stalls and no heifers planning to come in to fill those stalls. The key, in times like these, is to look at the income over feed costs of individual cows, De Vries says.
Consider De Vries' example of $10 milk and 11¢/lb. of feed dry matter. He assumes 50 lb./cow of feed dry matter intake per day, and a 70-lb. tank average. On average, the feed cost/cwt. of milk is $8.20 in this scenario. So the easy assumption is that any cow who is eating more than that is here today, hamburger tomorrow.
A cow eating 50 lb. of dry matter but still producing 60 lb. of milk has a feed cost of $9.17/cwt. That's nearly $1 higher than herd average. Her actual feed cost/day, however, is $5.50. And at 60 lb. of milk/day, she is generating $6 of milk income. Her income over feed cost (IOFC) is a positive 50¢/day—making her a keeper, at least in the short term, De Vries says.
If her production should drop to 50 lb./day, she then becomes an immediate cull candidate. Her IOFC goes negative, losing 50¢/day.
There are other points
to consider, De Vries adds. His suggestions:
- When your barn is not full, cows only have to pay for their variable cost to keep them in the herd. Variable cost includes feed, parlor supply costs and perhaps some labor.
- Value feed prices at today's market prices. What you paid for the feed in the past is irrelevant.
- When milk prices are low, the value of marginal milk (each additional pound) is less. If you cull a high-producing, open cow early but have to buy a heifer to keep the stall full, you will have less milk income to pay for the replacement cost.
- If your barn is full, the question is if a replacement animal is more profitable than the animal currently occupying the space. "It is not uncommon that if IOFC is less than about $3/cow/day, the cow should be replaced if you have a heifer available to replace her,” De Vries says.
- You might want to try to get a lower-producing cow pregnant, dry her off early on low-cost feed or pasture and have her available when milk prices rebound. "You want to have the barn full when milk prices get better while not having to purchase a lot of heifers,” De Vries says.
- When the barn is overcrowded, it makes more sense to cull low-producing cows earlier. "With less overcrowding, milk production of the remaining cows will likely improve, and the cost/cwt. of milk will come down,” De Vries says.
"Parting the Red Sea"
-By Jim Dickrell
"Facing Cow Management Decisions with the New Cost of Production on Southeast Dairy Farms"
-By Albert DeVries