an eeo/affirmative action employer, the university of wisconsin-extension provides equal...

An EEO/Affirmative Action employer, the University of Wisconsin-Extension provides equal opportunities in employment and programming including, Title IX and ADA requirements.©2007 by Board of Regents of the University of Wisconsin System, doing business as the Division of Cooperative Extension of the University of Wisconsin-Extension

Cost of Raising Dairy Cost of Raising Dairy ReplacementsReplacements

S. Huntzicker, T. Kohlman, S. Huntzicker, T. Kohlman, A. Zwald, and P. Hoffman A. Zwald, and P. Hoffman (University of Wisconsin)(University of Wisconsin)

2007 by Board of Regents of the University of Wisconsin System, doing business as

the Division of Cooperative Extension of the UW-Extension


ContributorsContributorsMaria BendixenMaria Bendixen Adam HadyAdam Hady Lee MilliganLee Milligan

Greg BlondeGreg Blonde Mark HagedornMark Hagedorn Zen MillerZen Miller

Bob CroppBob Cropp Abby HuibregtseAbby Huibregtse Aerica OpatikAerica Opatik

Aliesha CroweAliesha Crowe Steve HuntzickerSteve Huntzicker Mahlon Mahlon PetersonPeterson

Paul DykPaul Dyk David KammelDavid Kammel++,*++,* Ryan SterryRyan Sterry

Ronda GildersleeveRonda Gildersleeve Tina KohlmanTina Kohlman Sandy StuttgenSandy Stuttgen

Matt GlewenMatt Glewen Tom KreigelTom Kreigel++++ Jon ZanderJon Zander

Scott GundersonScott Gunderson Matt LippertMatt Lippert++Center for Dairy Profitability, University of Wisconsin-Madison* Biological Systems Engineering, University of Wisconsin-MadisonAll other contributing authors are affiliated with the University of Wisconsin-Extension


Heifers…An Investment in Heifers…An Investment in the Future Dairy Herdthe Future Dairy Herd

Providing high Providing high quality replacements quality replacements for improving genetic for improving genetic progress progress

Heifer raising is the Heifer raising is the 22ndnd largest largest expenditure on a expenditure on a dairy farmdairy farm


Intuitive Cost of Intuitive Cost of Production Analysis (ICPA)Production Analysis (ICPA)

An analysis system that calculates An analysis system that calculates producer-specific rearing cost and producer-specific rearing cost and labor efficiencies of rearing dairy herd labor efficiencies of rearing dairy herd replacementsreplacements

An economic and An economic and labor efficiency labor efficiency benchmark for benchmark for dairy herd dairy herd replacementsreplacements


Intuitive Cost of Intuitive Cost of Production Analysis (ICPA)Production Analysis (ICPA)

ICPA Computer ModelICPA Computer Model CalvesCalves HeifersHeifers

Evaluates cost, group cost, and Evaluates cost, group cost, and labor efficiencieslabor efficiencies

49 Commercial operations49 Commercial operations- 15 tie-stall barn operations- 15 tie-stall barn operations

- 21 free-stall barn operations- 21 free-stall barn operations- 13 custom calf-heifer growers- 13 custom calf-heifer growers

40 calf enterprises, 44 heifer 40 calf enterprises, 44 heifer enterprisesenterprises


Calf EnterpriseCalf Enterprise


Calf EnterpriseCalf Enterprise

ITEMITEM Defined InputsDefined Inputs

Calf valueCalf value $500 per calf$500 per calf

Calf age Calf age definitiondefinition

Age moved to Age moved to group housing group housing

LaborLabor $12.00 per hour$12.00 per hour

ManagemenManagementt

$20.00 per hour$20.00 per hour

Interest rateInterest rate 8.0%8.0%


Calf Enterprise Calf Enterprise Continued…Continued…

ItemItem Defined Defined InputsInputs

Wooden Calf Wooden Calf HutchHutch

$200$200

Purchased Purchased Calf HutchCalf Hutch

$300$300

Greenhouse Greenhouse BarnBarn

$10 per $10 per square square

footfoot

Post-Frame Post-Frame Calf BarnCalf Barn

$12.00 per $12.00 per square square

footfoot


$0

$20

$40

$60

$80

$100

$120

$140

$160

Cos

t pe

r ca

lf

Feed Variable Labor & Mgt Fixed

Cost Area

19992007

Table 1

Cost of Raising Calves Cost of Raising Calves


Changes in Cost of Rearing Changes in Cost of Rearing CalvesCalves1999 vs. 20071999 vs. 2007

% Change% Change % Change % Change per Yearper Year

VariableVariable

Liquid FeedLiquid Feed 147.4147.4 18.418.4

Calf StarterCalf Starter 11.511.5 1.41.4

ForageForage -51.2-51.2 -6.4-6.4

BeddingBedding 22.122.1 2.82.8

VeterinaryVeterinary 104.8104.8 13.113.1

Death LossDeath Loss 222.8222.8 27.927.9

InterestInterest 201.5201.5 25.225.2

LaborLabor 129.5129.5 16.216.2

Paid MgtPaid Mgt 102.9102.9 12.912.9

FixedFixedCalf HousingCalf Housing -11.0-11.0 -1.4-1.4

Calf EquipmentCalf Equipment 72.472.4 9.09.0

Present Present CostCost

Base Cost + Calf Base Cost + Calf ValueValue 217.6217.6 27.227.2

Labor & Mgt Labor & Mgt EfficiencyEfficiency

Labor/Mgt RequiredLabor/Mgt Required 33.433.4 4.24.2

Calves per hourCalves per hour -13.7-13.7 -1.7-1.7

Calves per dayCalves per day -13.5-13.5 -1.7-1.7

Table 4


Proportions of CostProportions of Cost

47%

4%15%

34%

Fixed Costs Labor & Mgt Feed Variable Costs

Table 1


Daily Calf Rearing Costs by OperationDaily Calf Rearing Costs by Operation

$0.00$0.25$0.50$0.75$1.00$1.25$1.50$1.75$2.00$2.25$2.50$2.75$3.00

Cos

t p

er c

alf

per

day

Tie-Stall Free-Stall Custom Grower All Operations

Feed Variable Labor/Mgt Fixed

Table 3


Cost Per Day To Raise A Dairy Cost Per Day To Raise A Dairy CalfCalf

Calf Cost per Day*Calf Cost per Day*

Tie-Tie-StallStall

Free-Free-StallStall

CustoCustom m

GroweGrowerr

AllAll

Variable Variable

CostCost$3.45$3.45 $5.01$5.01 $2.63$2.63 $4.20$4.20

Fixed CostFixed Cost $0.19$0.19 $0.17$0.17 $0.41$0.41 $0.20$0.20

OpportunitOpportunity y

CostCost$2.15$2.15 $0.41$0.41 $0.11$0.11 $1.02$1.02

Present Present

CostCost$5.78$5.78 $5.59$5.59 $3.16$3.16 $5.42$5.42

*Does not include calf value

Table 3


Calf Labor EfficiencyCalf Labor EfficiencyAll Operation SurveyedAll Operation Surveyed

Table 1

AveragAveragee

HighHigh LowLow

Calf per Calf per HourHour

7.97.9 2.32.3 26.826.8

Minutes Minutes per Calfper Calf

7.67.6 2626 2.22.2


What Price Do We Pay For What Price Do We Pay For Lack Of Efficiency?Lack Of Efficiency?

Farmer 1:Farmer 1: 2.3 Calves/Hour = 26 Minutes/Calf2.3 Calves/Hour = 26 Minutes/Calf $12 an hour for labor$12 an hour for labor It costs $5.21 calf/hour!!It costs $5.21 calf/hour!! 18.7 calves/day @ $5.21/calf/hour=$97.43/day18.7 calves/day @ $5.21/calf/hour=$97.43/day

Farmer 2:Farmer 2: 26.8 Calves/Hour = 2.2 Minutes/Calf26.8 Calves/Hour = 2.2 Minutes/Calf $12 an hour for labor$12 an hour for labor It costs $0.45 calf/hour!It costs $0.45 calf/hour! 214.6 calves/day @ $0.45/calf/hour=$96.57/day214.6 calves/day @ $0.45/calf/hour=$96.57/day

Cost Difference= $4.76 calf/hour and 195.9 Cost Difference= $4.76 calf/hour and 195.9 calves per day!calves per day!


Labor Saving Ideas for Labor Saving Ideas for CalvesCalves

Bulk liquid delivery systemBulk liquid delivery system In-line bucket systemsIn-line bucket systems Batch milk re-placer mixersBatch milk re-placer mixers Automated bottle-filling Automated bottle-filling

systemssystems Calf starter feeding bottlesCalf starter feeding bottles Ergonomic calf pens or Ergonomic calf pens or

hutcheshutches Liquid-feed mixing roomLiquid-feed mixing room Power mixers to mix milk Power mixers to mix milk

re-placersre-placers Dedicated calf equipment Dedicated calf equipment

and feed mixing facilityand feed mixing facility Motorized carts to deliver Motorized carts to deliver

liquid feeds, starter, waterliquid feeds, starter, water Hand carts to carry suppliesHand carts to carry supplies

Source: Compiled by P.C. Hoffman, University of Wisconsin, Source: Compiled by P.C. Hoffman, University of Wisconsin, 2003—”Raising Dairy Replacements”2003—”Raising Dairy Replacements”

Location of calf housingLocation of calf housing Easy gate access to pensEasy gate access to pens DishwasherDishwasher Automated bottle filling Automated bottle filling

equipmentequipment All in all out calf housingAll in all out calf housing Water and electric utilities Water and electric utilities

located close to calveslocated close to calves Carts to carry and transport Carts to carry and transport

calvescalves Locate bedding close to calvesLocate bedding close to calves Bedding delivery cartsBedding delivery carts Rear access to calf pens or Rear access to calf pens or

hutcheshutches Front fence buckets or bottle Front fence buckets or bottle

holdersholders


Heifer EnterpriseHeifer Enterprise


Heifer EnterpriseHeifer Enterprise

ItemItem Defined Defined InputsInputs

Feed Costs:Feed Costs:

Legume SilageLegume Silage $100 per ton $100 per ton DMDM

Corn SilageCorn Silage $85 per ton DM$85 per ton DM

CornCorn $116 per ton $116 per ton DMDM

Weigh-backsWeigh-backs $100 per ton $100 per ton DMDM

Soybean MealSoybean Meal $200 per ton $200 per ton DMDM

LaborLabor $12.00 per hour$12.00 per hour

ManagementManagement $20.00 per hour$20.00 per hour

Interest rateInterest rate 8.0%8.0%


Heifer Enterprise cont.Heifer Enterprise cont.

ItemItem Defined InputDefined Input

Bedded Bedded Pack BarnPack Barn

$15 per $15 per square footsquare foot

Freestall Freestall BarnBarn


Mound Mound System or Dirt System or Dirt

LotLot

$0.09 per $0.09 per square footsquare foot

Concrete Concrete LotLot



$0

$100

$200

$300

$400

$500

$600

$700

Cos

t pe

r he

ifer


Cost Area

19992007

Cost of Raising Heifers Cost of Raising Heifers Table 8


Changes in Cost of Rearing HeifersChanges in Cost of Rearing Heifers1999 vs. 20071999 vs. 2007

% Change% Change per

Year

Variable

Feed 5.6 0.7

Bedding 68.8 8.6

Veterinary -13.2 -1.7

Breeding 85.9 10.7

Electrical and Fuel -3.1 -0.4

Interest 103.3 12.9

Death Loss -59.4 -7.4

Labor 98.5 12.3

Management 72.5 9.1

Fixed

Manure Storage -12.1 -1.5

Housing 38.9 4.9

Equipment -48.8 -6.1

Present Cost Base Cost + Calf Value 62.9 7.9

Labor & Mgt Efficiency

Labor/Mgt Required -0.4 0.0

Heifers per hour -6.6 -0.8

Heifers per day -6.4 -0.8

Table 8


Proportions of Cost to Raise Proportions of Cost to Raise HeifersHeifers

52%

12%18%

18%

Fixed Costs Feed Labor & Mgt Variable Costs

Table 5


Daily Heifer Rearing Costs by Daily Heifer Rearing Costs by OperationOperation

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

Cos

t p

er h

eife

r p

er d

ay

Tie-Stall Free-Stall Custom Grower All Operations

Feed Variable Labor/Mgt Fixed

Table 7


Cost Per Day To Raise Cost Per Day To Raise HeifersHeifers

Heifer Cost Per Day*Heifer Cost Per Day*

Tie-Tie-Stall Stall

Free-Free-StallStall

CustoCustom m

GroweGrowerr

AllAll

Variable CostVariable Cost $1.60$1.60 $1.69$1.69 $1.52$1.52 $1.63$1.63

Fixed CostFixed Cost $0.23$0.23 $0.27$0.27 $0.24$0.24 $0.25$0.25

Opportunity Opportunity CostCost $0.30$0.30 $0.07$0.07 $0.17$0.17 $0.17$0.17

Present CostPresent Cost $2.12$2.12 $2.04$2.04 $1.93$1.93 $2.05$2.05

*Does not include calf rearing costs

Table 7


Heifer Labor EfficiencyHeifer Labor EfficiencyAll Operations SurveyedAll Operations Surveyed

Table 5

AveragAveragee

HighHigh LowLow

Heifers Heifers per Hourper Hour

50.1450.14 47.347.3 69.769.7

Minutes Minutes per Heiferper Heifer

1.21.2 1.31.3 .86.86


What Price Do We Pay For What Price Do We Pay For Lack Of Efficiency?Lack Of Efficiency?

Farmer 1:Farmer 1: 47.3 Heifers/Hour = 1.3 Minutes/Heifer47.3 Heifers/Hour = 1.3 Minutes/Heifer $12 an hour for labor$12 an hour for labor It costs $0.25 heifer/hourIt costs $0.25 heifer/hour 378.6 heifers/day @ $0.25/heifers/hour=$94.65/day378.6 heifers/day @ $0.25/heifers/hour=$94.65/day

Farmer 2:Farmer 2: 69.7 Heifers/Hour = .86 Minutes/Heifer69.7 Heifers/Hour = .86 Minutes/Heifer $12 an hour for labor$12 an hour for labor It costs $0.17 heifer/hourIt costs $0.17 heifer/hour 557.6 heifers/day @ $0.17/heifer/hour=$94.79/day557.6 heifers/day @ $0.17/heifer/hour=$94.79/day

Cost Difference= $0.08 heifer/hour and Cost Difference= $0.08 heifer/hour and 179 heifers per day!179 heifers per day!


Labor Saving Ideas for Labor Saving Ideas for HeifersHeifers

Hand drawn or powered equipment and feed cartsHand drawn or powered equipment and feed carts Convenient feed storageConvenient feed storage Manure scrapersManure scrapers Animal handling systemAnimal handling system HeadlocksHeadlocks Drive-by feedingDrive-by feeding Equipment storage roomEquipment storage room Medication tool beltMedication tool belt Pen or hutch arrangementPen or hutch arrangement

Source: Compiled by P.C. Hoffman, University of Wisconsin,Source: Compiled by P.C. Hoffman, University of Wisconsin,

2002 - “Raising Dairy Replacements”.2002 - “Raising Dairy Replacements”.


Rearing Cost by Heifer Rearing Cost by Heifer WeightWeight

$0.10

$0.60

$1.10

$1.60

$2.10

$2.60

Heifer Weight (lbs)

Cos

t pe

r da

y


Table 9


Changes in Cost of Rearing Changes in Cost of Rearing Replacement HeifersReplacement Heifers

1999 vs. 20071999 vs. 2007

$0

$500

$1,000

$1,500

$2,000

$2,500

Calves Heifer Total wo calf Total + calf value

1999 2007


SummarySummary We must take into account We must take into account

each year what our costs each year what our costs are for raising our are for raising our replacement heifers. If we replacement heifers. If we don’t normal inflation will don’t normal inflation will take over!!take over!!

Always look at costs in the Always look at costs in the calf enterprise because of calf enterprise because of liquid feed costs.liquid feed costs.

Raising calves and heifers Raising calves and heifers have no genetic progress to have no genetic progress to fall back on.fall back on.


Special Appreciation To…Special Appreciation To…

Mike WildeckMike Wildeck

Zen MillerZen Miller

Pat HoffmanPat Hoffman

For use of slides that were presented For use of slides that were presented with the 1999 ICAP Data!with the 1999 ICAP Data!


Thank You…Thank You…For more information please contact:Steve Huntzicker, Agriculture AgentLa Crosse County UW-Extension(608)[email protected]

Annette Zwald, UW-Madison Dairy Science Student(608) [email protected]

Tina Kohlman, Dairy and Livestock AgentSheboygan County UW-Extension (920) [email protected]

Pat Hoffman, UW-Extension Dairy Replacement Specialist(715) [email protected]

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