Cow Culling

Controlling production costs while maximising income is a priority for dairy farmers.  Maintaining herd size is a major driver for turnover, yet the cost of rearing replacements is not well enough managed by the majority of farmers.

What is cow culling?

Reasons to cull cattle?

Cost of replacing herd?

Key culling questions to ask

Target replacement costs

What does is cost to rear a heifer?

General culling factors

What is cow culling?

The removal of cows from the main herd due to sale, slaughter, or death.  Thus the term cull includes all cows that leave the dairy, regardless of where they end up or condition they leave in. Dairy producers often encounter difficult decisions on a daily basis. One of the hardest is deciding whether to maintain and treat, or cull a cow.

 

What are the reasons for culling cattle?

There are many reasons to cull cattle dairy farmers are focused on maximising income while at the same time controlling all production costs. One area which merits considerable attention, but is all too often is ignored, is the cost of maintaining the herd size.

Herd size is a major driver of turnover yet the cost of rearing replacements is not largely understood. At the same time, culling rates in the UK which range from under 18% to well over 35% per annum, are an area where more management control could be applied. Many cows are culled prematurely leading to a higher number of heifers required.

The average cost of replacements is currently around 2.6ppl but for many herds this is closer to 3.2ppl. It should be within the scope of most farm businesses to adopt strategies that allow replacement costs to be reduced to 2.0ppl. The financial benefit of such an improvement would be around £90 per cow extra gross margin or £14,400 per annum for a 160 cow herd.

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Understanding the cost of herd replacement

The cost of maintaining the herd (that is the cost of rearing replacements less the value of culls sold) is a major proportion of the dairy herd variable costs. It is typically the second highest variable cost of milk production with only feed and forage being a greater cost. This is a cost area that needs to be looked at, but few do, and there are a number of reasons for this:

The cost is often referred to by different names such as "Herd Depreciation" or "Herd Replacement Cost". It is also made up of a range of elements such as loss of beef calf income, cull cow income, cost of youngstock feed, as well as overhead costs, and consequently is difficult to determine.

It is largely a hidden cost unlike costs such as vet bills and dairy sundries. You never write a cheque for "Herd Replacement Cost!"

It is not an easy area to tackle as it requires a clear plan and may take several years to influence. However, it is an area where management focus can have a significant impact on costs. There is a management maxim which states 'If you don't measure it, you can't manage it'. For many farmers the starting point is to start measuring the problem of culling to allow them to identify the core problems and then set about making improvements.

Ask yourself the following questions:

How many cows do you cull each year?

What are they culled for?

How many made the maximum possible price?

How many walked off the farm for sale, and how many were carried off for no income?

What is your average replacement rate?

Getting to grips with the answers to these questions can have a big impact on the cost of herd replacements and help boost margins.

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What should a target replacement cost be?

To arrive at an appreciation of replacement cost, it is important to understand two principal components:

The true cost of rearing a heifer replacement

The effect of culling rate/replacement rate on replacement costs.

 What does it cost to rear a heifer?

Rearing replacements is an expensive exercise yet many farmers fail to fully plan how many heifers they need. The effect is capital and time are tied up which could probably be better utilised elsewhere. It is worth considering all the true costs involved in rearing a replacement.

There are three component costs to rearing a replacement heifer:

1. The true cost of getting a dairy heifer calf born.

If you breed two cows to a continental beef breed, you would on average have one crossbred bull calf to sell at say £15 and one heifer at £105 - a combined income of £260. If you breed the same two cows to a dairy bull, then on average you will have one Friesian/Holstein bull to sell at about £55 and a heifer calf to rear. The difference of £205 is the effective cost of the calf you will then rear.

However, there is also a difference in semen cost, between about £6 per straw for beef and about £13 for a dairy bull. As it takes 6.5 straws of semen to get two cows in calf (allowing for conception rate, cow culling etc.) there is an additional £52 cost for the extra semen cost of getting a dairy heifer. Together these amount to £250 which is the "opportunity cost" of having the heifer calf born. That cost starts nine months before the heifer calf even arrives. And then you have to allow for 8% mortality at, or soon after birth.

2. Variable costs

These are the well understood costs of calf rearing through to calving - which in the UK is on average 2 years and 4 months. These are the feed, vet, forage and bedding costs.

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3. Overhead costs

There are numerous, although less often stated overhead costs of keeping dairy heifers. They do take time and effort, they do need silage and produce manure with associated machinery costs, and their buildings and fences need maintaining. In addition, there is the cost of interest on borrowed money and that begins when you made the decision to breed for a dairy heifer rather than have beef cross calves to sell.

The total rearing cost for an average heifer reared to calve down at 2 years and 4 months is around £1,090. Some farmers will do the job better and quicker, calving at the right bodyweight (which is 85% of the mature cow's liveweight) at 22-24 months. The feed bills may be a little higher, but the overheads and interest charges will be less, to give a total cost of £950 per heifer reared.

Others may routinely go to rearing at three years old, in which case the costs will be nearer £1,150 per heifer reared.

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General factors contributing to higher culling rates

Research shows there are a number of factors that can result in higher culling rates:

  • Culling rates tend to increase with herd size and milk yield. This is probably related to the number of cows per person and the amount of time available. Culling increases when there are more than 50 cows per full time employee
  • Higher yielding herds tend to cull more cows for low milk production, and problems with legs and feet
  • The proportion of animals culled for an 'unknown' reason increases with herd size
  • Cow mortality increases with herd size
  • Animals with a high first lactation yield are less likely to be culled than animals with a low first lactation yield.
  • Cows are more likely to be culled in early lactation, probably due to calving and nutrition related problems and higher stress levels in high yielding animals.
  • Spring calvers are more likely to be culled than summer and autumn calvers - possibly because they tend to be harder to get in calf.
  • Herds with higher disease levels tend to have higher culling rates. There is a clear link between the levels of metritis, cystic ovaries, milk fever and displaced abomasia and culling. The inference is that herds where disease prevention and management is given a high priority should see a benefit in reduced culling rates.
  • Culling rates often increase when a herd is expanded as a result of buying cows from various sources. Many herds reported that herd biosecurity was compromised and that BVD, IBR, Johne's disease and digital dermatitis were notable problems during expansion. AHDB Dairy's Cattle Purchasing Checklist is a useful way to reduce the problems associated with buying stock.

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