An Economic Analysis of the Costs Associated with Pre-Weaning Management Strategies for Dairy Heifers

SIMPLE SUMMARY: Rearing of replacement female calves on a dairy farm is of critical importance to maintain herd sizes, improve the genetic quality of the herd, and remain economically sustainable. A 2-year investment period is needed for replacement female heifers to grow before entering the milking herd. The management of replacements over this 2-year period can vary greatly among operations, making it difficult to compare producers’ cost to benchmark. The objective of this project was to develop a model to calculate the cost of rearing a replacement heifer from birth to weaning under different housing, milk source, allotments, and labor and health management decisions to be used as a dairy farm decision support tool. We calculated the cost for management options with general cost values. We found that the average feed cost represented 46% of the total cost while labor, and fixed and variable costs represented 33%, 9%, and 12%, respectively. The total cost increased as milk allotment increased, but cost per Kg of gain decreased. The ranges in total cost within each management scenario often exceed the difference in cost from one scenario to the next. In conclusion, variable costs have the potential to vary among operations, playing a major role in the total cost of rearing replacements from birth to weaning. ABSTRACT: Dairy calves are raised in various housing and feeding environments on dairy farms around North America. The objective of this study was to develop a simulation model to calculate the cost of raising replacement dairy heifers using different inputs that reflect different management decisions and evaluate their influence on the total cost. In this simulation, 84 calves were modeled between 0–2 months of age to reflect a 1000 heifer herd. The decisions associated with housing, liquid diet source and allowance, labor utilization, and health were calculated. Costs and biological responses were reflective of published surveys, literature, and market conditions. A 10,000-iteration economic simulation was used for each management scenario using @Risk and PrecisionTree add-ons (Palisade Corporation, Ithaca, NY, USA) to account for variation in pre-weaning mortality rate, weaning age, and disease prevalence. As milk allotment increased, total feed cost increased. Feeding calves a higher allowance of milk resulted in a lower cost per kg of gain. Average feed cost percentage of the total cost was 46% (min, max: 33%, 59%) while labor, and fixed and variable cost represented 33% (20%, 45%), 9% (2%, 12%), and 12% (10%, 14%), respectively. Total pre-weaning costs ranged from $258.56 to $582.98 per calf across all management scenarios and milk allotments.