Effects of Housing System on Dairy Heifer Replacement Cost From Birth to Calving: Evaluating Costs of Confinement, Dry-Lot, and Pasture-Based Systems and Their Impact on Total Rearing Investment

Replacement heifer rearing is critical for the future of dairy operations, to improve genetic merit and maintain herd size. A myriad of options exist on how to manage, feed, and ultimately raise replacement heifers. Pasture is perceived to offer optimal welfare and an economical housing system for replacement animals, but confinement systems are gaining popularity. This study investigates the costs associated with replacement heifer management decisions from birth to calving, considering the factors of housing systems, labor, feed, and health. The objective of this study was to develop an economic model to determine the cost of raising a replacement heifer managed in confinement, dry-lot, and pasture-based scenarios post-weaning. We accounted for variation in feed, labor, and health inputs and quantified the impact of these individual management decisions. An economic simulation with 10,000 iterations were completed for each situation using @Risk and PrecisionTree add-ons (Palisade Corporation, Ithaca, NY) where health incidence, commodity prices, and management variables were made stochastic. Published literature or sample farm data created parameters used in Pert distributions. Costs and biological responses were reflective of published surveys, literature, and market conditions. Management decision inputs had 3 main factors: housing type, ration composition, and labor utilization. Housing systems were calculated separately for confinement, dry-lot, and pasture scenarios. The mean total cost (min, max) to raise a replacement heifer from birth to calving, assuming the same pre-weaning strategy of group housing with an automatic calf feeder, was found to be $1,919.02 ($1,777.25, $2,100.57), $1,593.57 ($1,490.30, $1,737.26), and $1,335.84 ($1,266.69, $1,423.94) for confinement, dry-lot, and pasture, respectively. Total housing cost per replacement heifer was $423.05, $117.96, and $207.96 for confinement, dry-lot, and pasture management systems, respectively. When compared to total cost, housing contributed 21% for confinement, 7% for dry-lot, and 15% for pasture. Upon analysis of all scenarios, utilizing pasture to raise heifers resulted in a lower overall cost when compared to confinement housing options. Percentage breakdowns of feed, labor, housing, and fixed and variable costs provided more information on efficiency rather than total cost, which makes each situation different in relation to on-farm cost. This cost analysis is critical to assisting farms in making decisions in the utilization of their resources for replacement dairy heifers.