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What are your targets to improve your dairy farm profitability?

The key takeaway from this article

  • The Selko profit calculator can be used to identify areas of improvement that will increase Lifetime Daily Yield and farm profitability
  • Standard protocols and production parameters should be analysed to make the additional profit calculated a reality
  • The biggest opportunity for change is improving longevity of dairy herds

Lifetime Daily Yield is your baseline measurement

Lifetime Daily Yield is defined as the total lifetime production divided by the total days of life, from birth to culling. It can be used to compare performance between farms. The Selko profit calculator is a simple tool that can be used to identify opportunities to increase Lifetime Daily Yield and thus make dairy farming more profitable and sustainable1.

Lifetime Daily Yield

There are 4 parameters that have an impact on LDY: age at 1st calving, production per lactation, calving interval and number of productive years2. Out of these, the number of productive years, in other words: longevity has the biggest impact.

What is the relation between sustainability and performance of dairy farms?

The more traditional definition of dairy farm sustainability is related to environmental footprint. It looks at emissions of greenhouse gas, nitrogen and phosphate and at the use of arable land and water. More recently, it includes health and welfare of dairy cows. Modern consumers of milk expect farmers to ensure their animals are healthy and happy. Concerns about the antimicrobial resistance of human pathogens as a consequence of use of antibiotics in animals are increasing. Reducing the replacement rate on a dairy farm by 5% can reduce methane emissions by 11.7% per kg of milk produced1.

A very relevant definition of sustainability is often overlooked: dairy farming can only be sustainable if it provides dairy farmers with an income, today and in the future. Dairy farms have often been in the family for many generations. Farming is not a profession but a way of life. Financial health is therefore a key indicator for sustainability. The Selko profit calculator can be used to improve financial performance of a dairy farm.

How does the Selko profit calculator work?

Step 1

The first step is to identify the current farm status by providing a number of farm variables such as number of cows, annual production and farm gate milk price (see Figure 1: Farm data). The second step is to change the 4 key performance indicators of the farm (see Figure 1: Selko production indicator values) so thay also meet your current farm status:

  • Age at 1st calving
  • Replacement rate
  • Days in milk at which peak production is reached
  • Heifer/cow production rate

The impact of the 4 Selko Key indicators

Step 2 and 3

Based on your farm input, a number of production variables such as Lifetime Daily Yield, number of young stock and total milk production are calculated (see Figure 2: Impact on farm KPIs). Subsequently an assessment of the farm profitability is made a number of financial parameters are calculated (see Figure2: Impact on financial results).

The next step is to change the 4 key performance indicators at the bottom, after which the effect on farm profitability is immediately calculated. If e.g. the age at 1st calving on the 100 cow farm in the example presented in Figure 1 is reduced from 24 to 22 months, profitability goes up by € 7971,-. This is partly related to a reduction of rearing costs and partly related to an increase in milk production. Research carried out at the Trouw Nutrition Kempenshof research farm has shown that intensive feeding schedules that enable farmers to reduce the age at 1st calving from 24 to 22 months result in an increase of milk production and a reduction of culling rate during the first and second lactation3.

How can farmers translate the profit calculations into action?

Some of the input variables used in the profit calculation might be subject to debate, but that doesn’t really have a significant impact, as we are comparing a current situation with a desired situation while using the same assumptions. Translating the findings of the calculations into actions is however a potential challenge. The Profit calculator will tell us what the impact of improvement could be, but it does not tell us how to improve and what resources would be required to actually achieve a certain improvement.

If a farm for example does not use an intensive feeding schedule in calves and has an age at 1st calving of 25 months, it is to be expected that by changing to an intensive feeding schedule, it is realistic to reduce the age at 1st calving by 2-3 months. The resources required to make this happen can be calculated fairly easily. In some other cases, this might be more difficult. Reducing the involuntary culling rate from 30 to 25% might be a bit harder.

How can the 4 dairy farm performance indicators be improved?

The age at first calving has a strong correlation with the quality of the calf rearing programme and can be controlled relatively easy. The other 3 performance indicators are all heavily impacted by the quality of the transition to lactation. Traditionally, management of this transition focusses on 3 areas:

  • Stress free calving process, clean and well managed
  • Reducing the impact of negative energy balance
  • Managing the blood calcium levels after calving

Recent research4,5,6,7 suggests that the impact of hindgut health is huge. Poor hindgut health results in hindgut acidosis and loss of gut barrier function (“leaky gut”). As a result of leaky gut, bacterial toxins reach the circulation and cause systemic inflammation. Inflammation is a very costly process from a nutrient and energy point of view, resulting in direct competition with milk synthesis8. In addition to its direct consequences on performance, systemic inflammation has been associated with a variety of diseases typical for the transition period9 (see graph) and with poor reproduction9,10. Improving hindgut health is likely to result in an improvement in the other 3 focus areas.

Improving transition management

Analysing the opportunities to improve various areas of transition management can be done in two ways. One would be to compare farm management with best practice principles. Standard protocols on managing the calving process, reducing the effects of negative energy balance and managing blood calcium levels are widely available from various sources. Reviewing these protocols and comparing them with the management practices on farm may reveal gaps. In many cases, once a gap has been identified, scientific evidence or common sense will enable the reader to assess the impact of change.

A second option would be to compare output variables on the farm with target values. In a well-managed herd, the incidence of clinical milk fever, measured as a percentage of cows entering their 3rd or subsequent lactations should be below 5%. It is often much higher11. It is worth noting that for every cow with clinical milk fever, there are at least 4-5 animals in the herd with sub-clinical milk fever12. Therefore, if the incidence of milk fever is significantly above 5%, a management programme to increase blood calcium level will deliver a return on investment.

A healthy cow has a body condition score (BCS) between 3 and 3.5 during the entire production cycle. If the BCS drops below 2.5 or if the milk fat/protein ratio increases above 1.5 in a significant number of fresh cows, reducing the impact of negative energy balance should be a target for the farm.

Increasing milk production

Improving hindgut health will have a direct positive impact on milk production7. Improving transition management will reduce of the incidence of metabolic diseases and will thus have an indirect impact on production per lactation. It is however not easy to evaluate if cows produce according to their genetic potential by just looking at the total amount of milk produced in a lactation. An alternative would be to look at resilience by evaluating the Wilmink curve.

A cow that can adapt during the transition to lactation in such a way that there is no need for involuntary culling is a resilient cow13 (see graph). A resilient cow will perform according to her genetic potential. One of the characteristics of a resilient cow is that she peaks at 50-70 DIM.

Improving fertility

Out of the 4 performance indicators that can be changed in the Profit calculator, the replacement or culling rate has by far the biggest impact. Culling can be voluntary or involuntary. If involuntary, it can be culling early in lactation or late in lactation. Involuntary culling early in lactation is almost exclusively the result of poor transition to lactation and can have a negative financial impact of € 800-1,000.- per case.

Involuntary culling at the end of lactation is almost exclusively the result of fertility problems. It is less costly, but it often affects the higher producing cows in a herd. Thus, in herds that have a high milk production because the farmer manages to keep the incidence of metabolic disease low, fertility may be a logical target to reduce the replacement rate.

Another reason to focus efforts on improving fertility may be the calving interval. Traditionally farmers were aiming at a calving interval of about 365 days. Modern dairy cows usually have a good persistence of lactation and as a result, the daily yield at the end of lactation might be close to the LDY. In those cases, the impact on the LDY of keeping the calving interval short seems ignorable. This is only valid under one assumption: cows will not increase their BCS above 3.5 at the end of lactation. Particularly if the farm is not big enough to have a separate early lactation and late lactation group, cows with a moderate persistence of lactation will start the dry cow period with a BCS above 3.5. These cows are likely to be culled early during their next lactation as a result of metabolic disease. More and more farmers are therefore working with an individual optimal calving interval.

Download more research and documentation

You can access all of our documentation about Selko protocols, sustainable dairy farming and latest research insights about dairy cow transition management.

Poor fertility of a dairy herd can be a direct effect of hindgut acidosis6. It can also be related to an increased incidence of infections of the reproductive tract, to a poor transition to lactation34,35,37,38 or to other management factors.

For background information and practical advice on improving the fertility of your herd, please download our Technical brochure "Managing fertility on farm" and our protocol on dairy cow fertility.

Or visit our download center for more information:

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Calculate your profit!

See how sustainable dairy farming will result in more profitability of your farm

In contrast to common belief, it is very well possible to run a farm in a sustainable way while generating a healthy income.

Calculate your profit by influencing the 4 key indicators that help improve the Lifetime Daily Yield on your farm.

Find out more about how to improve Lifetime Daily Yield...