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Replacement herd costs

Holstein cows feeding
RAISING REPLACEMENTS: Raising calves and heifers is an expensive part of a dairy operation, but it is often overlooked since no direct income is derived from the replacement herd.
Dairy Team: Did you know it costs $2,510 to raise a heifer to freshening?

By Mark Hagedorn

Raising dairy replacements continues to be expensive. The cost of raising calves and heifers is often the second-highest expenditure on dairy farms after milking herd feed costs. In 2013, these costs were determined using data collected by University of Wisconsin Extension agriculture agents from 36 dairy farms and custom calf and heifer growers across the state. However, in the past few years, costs have changed — especially feed cost, which has dropped, and calf value, which has risen. This article provides updated costs as of 2015. 

A few assumptions were made to standardize certain input costs, which are listed below for 2013 and 2015.  Notice that only the feed costs and calf value are changed in the 2015 update. All other costs are producer-specific and represent real farm costs in 2013. 

Calf enterprise
Calf rearing expenditures were broken into four management areas:  feed cost, labor and management, variable costs (veterinary service, bedding, death loss and interest) and fixed costs (housing and equipment). The major change since 2013 was increased calf value ($400 vs. $150 per calf), which caused both death loss and interest costs (other variable costs) to increase. Other variable costs increased from $41 per calf (64 cents per day) to $51 per calf (70 cents per day). No other areas were changed for calf costs. 

In 2013, feed was the most expensive cost at $165 per calf ($2.40 per day). Feed costs included liquid feed (milk replacer or pasteurized milk), starter and forages. Labor and management costs were the next largest expense at $134 per calf ($1.95 per day). Fixed costs averaged $23 per calf (35 cents per day). 

The average total cost to raise a calf in 2015 was $374 per calf, or $5.51 per calf per day, not including the calf value.

The cost for raising calves ranged from $3.81 to $5.59 per calf per day, with the average being $5.51 per day over 68 days.                                                  

The heifer enterprise
Since 2013, feed costs have decreased significantly, from $1,046 per heifer ($1.71 per day) to $910 per heifer ($1.37 per day) in 2015. Labor and management were the next largest expense at $342 per heifer (53 cents per day). Other variable costs were about $278 per heifer (44 cents per day) and were similar to 2013 costs, with slightly lower interest costs due to lower feed costs, but higher death loss costs due to higher calf value in 2015. Fixed costs averaged $217 per heifer (32 cents per day).

The average cost for raising a dairy heifer from weaning to freshening (or returned to the dairy by custom grower) in 2015 was $1,736 per heifer, or $2.77 per day (range was $2.04 to $4.32 per heifer per day). That was 10% lower compared to 2013 ($1,914 per heifer).

Total costs
Since the cost of many farm inputs have increased in the past few years, it is to be expected that dairy replacement rearing costs have increased as well. As mentioned earlier, most data collected was producer-specific. Only a few key assumptions were made to help standardize inputs. The same approach was used when the study was performed in 1999 and 2007.

Based on the 2015 cost updates, the total cost to raise a heifer from birth to freshening averaged $2,510 (including the $400 value for the calf). This is actually higher than total heifer costs in 2013, which were $2,427 per heifer due to a $250 higher calf value in 2015.

Calf and heifer raising is an expensive part of a dairy operation, but it is often overlooked since no direct income is derived from the replacement herd. The data collected in this study provides an excellent benchmark on dairy replacement rearing costs for dairy producers and agribusiness professionals. However, to truly understand your own costs of production, you need to analyze your actual farm inputs. This information should be used to compare the performance and cost of your own dairy replacement management program. Identifying areas to improve producer efficiency may lead to enhanced profitability.

The UW Extension Dairy Team is currently collecting new data on the cost of raising wet calves with automatic feeding systems. Data for conventional feeding systems is also being refreshed. As an owner or producer, if you would like to be involved in this research project, feel free to contact your local Extension ag agent or me at 715-839-4712 or [email protected]

Final reports and fact sheets will be available in October 2017. For any and all information on the Intuitive Cost of Production Analysis, please refer to eauclaire.uwex.edu/uwex-icpa-project.

Hagedorn is the Eau Claire County Extension ag agent. This column is provided by the University of Wisconsin Extension Dairy Team.

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