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Dairy Improvement Services: Which ones are worth investing in?


As the saying goes … ‘Nothing is as constant as change’.  Today in the dairy farming industry, the world over, owners and managers face a change in the data services they use, which data pieces are important to them and who has access to their data. This article will focus on factors milk production focused farms need to assess when it comes to the use of dairy cattle improvement programs and services.

Herds of The Future

Currently, the average US dairy herd size is 250+ milking cows (in 37,000 herds) and 90+ in Canada (in 10,500 herds). Those averages have been increasing and will increase faster as labor availability diminishes, technology is applied, and margins per cow remain narrow.

Recent USDA analysis has shown that in the US 2000+ cow herds have a 20% lower daily cost per cow as compared to herds with 100-200 cows – “on a per hundredweight basis, large farms face 12% lower feed costs, 20% lower operating costs, and 45% lower allocated overhead than smaller operations” (Ben Laine, dairy analyst for Rabobank). Twenty per cent savings is huge – so we can expect to see larger herds. Presently 55% of US milking cows are in herds of 1000+ cows.

Double the current average herd size may not be the answer. The USDA study also shows only 4-5% savings in daily cow cost for 500 cow herds compared to 100-200 cow herds.

Canadian herds are currently considering how they address the loss of market share to foreign milk products, the payback on purchasing technology and the size of quota holding for their operation.

Milk producers in both the US and Canada need data on which to base their planning and management.

It’s a Changed Business Model

Only milk with unique content (A2A2, BB … etc.) will demand a significantly higher future farm gate price.

For most farms, the market for surplus heifers and cows no longer exists.  A profit centre, often 10% but up to 50% of farm revenue, has disappeared.

With sexed semen, only the top 60% of females need to be bred dairy to produce herd replacements. The remaining animals including low fertility animals can be breed to beef sires.

Dairy farms will sell both milk and meat. The meat revenue will be from beef-dairy cross animals born on the farm.

Dairy farm managers will need to focus on ways to increase revenue while keeping costs under control.

In short, generalization is gone, and specialization and focus must be practiced – in order to have a positive bottom line.

Future On-Farm Focus

These three areas of dairy farming will be added to milk producer planning in the future:

  • Producing to consumer demands/needs.
  • Efficiencies will supplant production, type, cattle shows and high records.
  • A total business approach must be considered – from the soil to the consumers’ tables.

Improvement Services for Milk Producers to Invest In

The following are areas for milk producers to consider when enrolling or investing in improvement services in the future:

  • Virtual Management Service will be Very Important

All farms, no matter the size or country, will need an animal, herd and farm information to plan, manage, feed and breed their operations. Progressive farms will not stop animal and herd recording. They need the data. They may, however, discontinue traditional DHI and herdbook recording and go to global cloud-based data systems that are linked to their on-farm electronic data capture systems.

  • Genotyping Service will be Very Important

Herd replacements females need to be genotyped. To identify: 1. Accurate parentage; 2. Animals that can be culled and not raised based on production, longevity, functionality; reproductive fitness and resistance to disease genetic results; 3. Desired protein (beta and kappa caseins) genotypes, as well as other ingredients in milk; and 4. For optimal mating decisions.

  • Private vs Cooperative Service will not matter

Traditional animal and herd recording systems have been provided by cooperative type organizations. However, that is changing. Private organisations are now providing parentage verification, data capture, new trait evaluations plus indexing and testing for a host of other things with more services promised.  So, where once it was the domain of cooperatives to provided trusted information, it now comes down to the trust that producers put in the information provided by whomever.

  • Animal Traceability Service will, in time, be Important

Being able to guarantee product by having an effective and accurate animal traceability system in place exists in many countries. It will come to North America. There are three components to animal traceability: premise identification; electronic identification; and tracking of animal movement. In most areas, North America has the first two, however not the third one. All livestock owners will require a service whereby an animal’s location and movement can be known. Farm biosecurity, including records, will also be a necessity.

  • Animal Purity will not be necessary

Animal purity in milk production herds will not add revenue for the milk shipped or reduce on-farm costs. Milk producers need to breed for the gene make-up in their animals, not purity.

  • Third-Party Verification will not be necessary

Milk producers need to be focused on their farm and its profitability but do not require third-party verification of the data on their farms.

The Future for Improvement Services

Milk production focused farms will decide on a cost: benefit basis which improvement services or programs they will use. Not all the current services will survive either entirely or in their current format.

The Bullvine Bottom Line

Herds will be fewer and larger. Consumers, efficiencies and a total farm approach will need to be added to what is important in animal, herd and farm improvement services.

The future scope, options and services in improvement programs offered to milk producers will need to be different from the past or present services. Milk producers will participate according to their plans and needs.


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