Today I drove past a crew of highway maintenance workers and one was pounding in a stake, one was holding the stake, one had a white hard hat and was obviously the crew chief and three were watching. Like most Bullvine readers, my mind reacted by saying – “Now isn’t that an inefficient use of our taxpayers dollars!” Fifty percent of that crew were taking their pay check but not giving back. You could be correct if you were to say that I judged too quickly. Perhaps I did not have all the facts. Most of us are quick to judge outside situations. However when it comes to our own milk producing work force are we business like, when it comes to the number of workers required to get the job done?
Tighter Margins Means Stringent Culling
Last year when milk was $22.00 /cwt FOB the farm gate, cows below herd average for revenue generation or above herd average for problems could be tolerated. But 2015 is a new year. Milk is only returning $18.00/cwt. That $4.00/cwt difference in revenue has a significant impact on cow to cow margins. Cows are your work force. 2015 is good year to get the pencil out and do the math on which cows to cull and thereby, in fact, increase the daily herd profit.
Jack Welch 10% Removal Method
A previous Bullvine article called Why You Should Get Rid Of the Bottom 10% was based on former Chairman and CEO of General Electric Jack Welch’s theory of removing the bottom 10% of workers every year. Even though that may sound extreme, few can argue with the 4000% growth in GE’s value over the 20 years Mr. Welch led the company. That previous Bullvine article focused readers’ attention on reproduction, heifer rearing, animal health and technological changes. This article aims to apply dollars and cents to identify potential cull animals. So you can allocate the feed and energy to the animals retained.
Calculate The Dollars
Once the very obvious culls have been removed from the herd, breeders need some way to decide which animals are the next ones to be culled. As dairying is a business, it seems appropriate to make the decisions based on what drives profit. More profit comes from either less cost or more revenue. Let’s look at how that could play out on dairy farms.
These Six Animals Can Be Culled Immediately
By attaching dollar values the following six scenarios came to the top of our list:
- Her Somatic Cell is Over 3.00
Think about it. You spend $2500 to raise a heifer only to have her produce milk that is over 3.00 SCS. Cows like that help put you in a potential penalty position, when it comes to the requirement that herd average SCC be under 400,000. Why keep cows that must be milked separately and their milk pasteurized and then used to feed calves? There are no dairy purpose sale opportunities for high SCS first calving cows. With a beef market value at $1300 (net), you have just lost $1200 on her. There is considerable documented field research to show that when a cow gets a third case of mastitis in a lactation that immediately puts her in the category of loosing money, no matter what the production level is. Considering lost saleable milk, drug costs, labor costs and consumption of valuable feed, cows that have high SCS’s can easily be costing you $2.00 per milking day. And that is not to mention the danger of shipping milk that contains a drug residue.
- Her Conception Rate is Costing Time, Resources and Money
Cows that take more than three services and heifers that take more than two services to conceive, cost big time. They have increased costs of $400 – $500 per year and likely $2000 per lifetime. That is based on added semen, labor (farm manager, farm worker, vet & technician) and drugs costs. Also included are the extra days she spends being non-productive (prior to first calving and in dry pens) and her time at lower production levels in her lifetime. These types of animals are losing you $1.60 per milking day. Looking at improved reproduction from a net perspective, Jeff Stevenson of Kansas State University determined that moving up pregnancy rate by 2% will net a dairyman $132 per cow per year as a result of more milk revenue, more calf revenues and increased value of cull/dairy sales of cows when milk is $18 per cwt. It would be even more if the sale price of milk is higher.
- She Cannot Keep Up in the Milk Pail
Yield is comprised of both volume and solid content. Cows that are 10% below their age-lactation contemporaries for solids corrected milk on average are generating $1.50 (1st lactation) – $2.50 (mature) less revenue per milking day than their piers. Again why raise a heifer just to have her be 10% or more below other first calvers?
- She is a Problem at Milking Time
Slow milking animals were tolerated in stanchion barns. Every breeder knew it was not a good thing but after investing in raising the heifer they thought they needed to get a return on their investment. Times have changed. Slow milkers in palor or rotary barns create extra work and lost through put time. Even in robot herds, slow milkers reduce the volume of milk that can be harvested per day. No one wants a slow milker. Another problem are the heifers that are hard to train to the milking routine. Staff can only be expected to be patient for a couple of weeks with first calf heifers that kick the milking unit off. Unlike the cows themselves, staff must be adaptable, but at what cost? It is almost impossible to put a dollar value on the cost of slow milkers and mean tempered cows. Definitely bloodlines with undesirable milking speed and temperament should be avoided.
- She Visits the Hoof Trimming Chute Often
The Bullvine has previously covered animal mobility (Read more: MOBILITY – THE ACHILLES HEEL OF EVERY BREEDING PROGRAM). Putting a dollar value on the cows that need extra foot care ($15 per trim), eat less so they produce less, require medication and therefore milk withdrawal, require numerous extra inseminations to conceive thereby spending extra time in the dry pen can mount up quickly. A simple foot problem can take a very profitable cow and make her a money losing one. If even 5% of a herd falls into this category, it can be costing $0.25 – $0.50 per milking cow day for the entire herd.
- She’s a Poor Doer / Goer
Animals that do not thrive and therefore require extra care can make the life of dairy people a drag a best but at worst can make people leave the industry. On a heifer basis we have no population figures on averages or the relationship with bloodlines of animals that do not thrive, get sick easier or do not reach puberty by 12-13 months of age. On a cow basis we know which ones have metabolic disorders, but we do not know how that relates to their genetic make up. As The Bullvine has stated on other occasions we need to be capturing and retaining more extensive information on these areas for both the heifer and cow herds. As yet we cannot put a dollar value on these costs.
Culling is usually viewed by dairy managers as a cost. It should be viewed as an opportunity. An opportunity to improve your farm’s bottom line. In a hundred cow herd carrying an extra five cows and ten heifers every day of the year amounts to $23,725 per year for feed costs alone. As feed is 55% of all expenses, total costs for carrying these extra animals is $43,136. That is sure not pocket change.
Sires and cow families that leave progeny that fit these six scenarios need to be eliminated from herds and the entire population. Good judicious culling, like pruning a tree, always makes the harvest better.
The Bullvine Bottom Line
It’s time to base culling on dollars – either extra costs or lost revenue. Operating a successful dairy enterprise is all about maximizing profit. Removing problem animals can impact the bottom line a significant, positive way.