Economic Benefits of Rightsizing the Farm Dairy Replacements

By Michal Lunak

During the last few years, dairy producers have been facing not only low milk prices but also low prices on the heifer market. Producers can't rely on raising replacements and later selling them to generate cash. To raise a heifer to the age of 24 months for $1,700 to $2,200 and then sell her for half of what she is worth is not a sustainable thing to do. In some cases, even the feed cost alone is approaching the sale price.

So, what can dairy operators do? It depends on what the manager's intentions are. If he/she plans on a herd expansion or aggressive culling of sick, low production, and cows with high SCC, it is perhaps a good reason to keep the heifers you raise. However, if expansion is not in the future, then selling them as soon as possible would save you a bundle.

Things managers need to know to take action:

1. How many heifers do you need to replace annually (herd replacement rate)
2. How many heifers does the herd produce annually
3. The farm costs of raising a heifer
4. Current heifer market price
5. Which heifer to sell, and which heifer to keep

The number of replacements a manager needs every year for the herd and how many heifers the herd produces annually. The difference between these two numbers is the number of heifers that can be sold.