Cow Value, Dairy Cow Decision Aid

 

Summary

The "Cow Value" module in Dairy Comp 305 estimates the value of each cow in a dairy herd relative to an average fresh heifer. A positive Cow Value means the animal is worth more than an average heifer in that herd. A negative Cow Value suggests the animal is worth less than an average heifer. In addition to estimating the value of the cow, the module also calculates the current value of a pregnancy for each adult, to help managers decide if an open animal should be inseminated.

 

COWVAL Switch Table

G

Calculate cow values, then exit (unattended mode)

 

 

Concept

 

There are two important rules the program uses to estimate cow values:

1. At dairy running at capacity is the most profitable.

2. Less profitable animals should be replaced with more profitable animals.

Every decision made on an animal in a commercial dairy is based on improving the herd’s profitability. You keep an animal because she is more profitable to keep than to replace. You breed animals because they will be more profitable if they become pregnant. You treat animals because they will be more valuable after a treatment than they are before. Cow Value estimates can help the herd manager assign a value to animals more consistently.

 

What does Cow Value consider when it values an animal?

A commercial dairy cow’s current value is the sum of her value for beef and the value of the milk she is likely to produce in the future. The value of an animal’s future production is based on

The amount of milk she is likely to produce in the future

The price of milk in the future

The value of the money you must invest in the animal

The amount of milk an animal is likely to produce in the future is based on

Age –The younger the animal, the longer she is likely to stay in the herd and produce milk.

Stage of lactation - an animal that is 30 days in milk is likely to produce more milk in the future than an animal that is 200 days in milk

Reproductive status - an animal that is pregnant is likely to produce more future milk, than an animal that is open. An animal that was just inseminated is more likely to be pregnant than an animal that has not been inseminated.

Production level - a high producing animal is likely to produce more milk than a low producing animal.

 

Steps to using Cow Value

 

A) Start Cow Value by typing COWVAL on the command line in Dairy Comp.

Review the parameters

Allow Dairy Comp to make the two new items, CWVAL and PGVAL and let it estimate the values.

B) Make lists of animals to get a feel for how it ranks and values your cows. Change some of your assumptions and re-run the lists. Note how the values changed.

C) Put the CWVAL and PGVAL on your cow cards, and perhaps your vet list.

D) Set the scheduler to re-calculate CWVAL and PGVAL each night so the values will stay current.

Run the Cow Value module

 

Go to the command line and type COWVAL <enter>

 

A menu appears with the following choices:

 

1) Exit    

2) Edit Parameters   

3) Estimate Cow Value  

4) Calculate Parameter Estimates 

Select number 2 – Edit Parameters, and the following table appears:

 

These parameters are discussed in more detail below, and a descriptive text appears when the value is highlighted and the F1 key is pressed.

You can return to the Cow Value menu by pressing the escape (ESC) key. The menu option "Calculate Parameter Estimates" will use cow data from your cowfile to estimate the culling rates and the 305 day milk production averages. Warning: Estimates based on past performance often do not accurately project future performance.

Once you have reviewed the parameters press escape and select "estimate Cow Value" from the menu.

 

Estimate Cow Value

The first time Dairy Comp estimates Cow Value it will ask you to allow it to create two new items, first CWVAL (to store the Cow Value estimate) and then PGVAL (to store the value of a pregnancy). Press <enter> each time Dairy Comp asks if you would like to create the two new items.

 

A brief summary is displayed following the calculation of Cow Value.

After calculating Cow Value exit the Cow Value routine by pressing the escape (ESC) key.

Make a report to look at the values

There are many different ways you may want to look at CWVAL and PGVAL. A simple start is to list all adults sorted by CWVAL. The lowest value animals will be on the top of the list. The highest value animals will be on the bottom of the list.

 

There are several different "FOR" statements to consider in your report. In this example report, we used "FOR DIM>75". This narrows our cow list to those with more reliable production estimates for this lactation. It also excludes lactation zero animals. Once you get to know Cow Value estimates more, you may want to limit the list to cull candidates by using "FOR CWVAL<0".

 

 

 

CWVAL and PGVAL Relative to Reproductive Status

If an animal is not pregnant, than the value of getting her pregnant would be her current PGVAL. (If she became pregnant today her new CWVAL would be her current CWVAL plus her current PGVAL).

If the animal is pregnant her CWVAL already includes her PGVAL. If she were to abort then her CWVAL would decrease by the PGVAL.

If the animal is open and becomes bred her CWVAL goes up because she is more likely to be pregnant than before she was bred so she is more likely to produce more milk into the future.

 

Example Cow Value List

 

SHOW ID LACT DIM MILK RV RPRO DSLH DCC CWVAL PGVAL BY CWVAL FOR DIM>75

 

ID LACT  DIM MILK RV RPRO  DSLH DCC CWVAL PGVAL 

4224 3 84 26 59 BRED 11 0 -757 -248

1430 3 85 45 70 BRED 53 0 -646 157

6848 1 125 48 72 BRED 27 0 -410 587

32 3 457 47 114 NO BRED 0 0 -330 449

993 3 209 14 85 BRED 16 0 -330 -325

 

 

Animal 4224 is the least valuable animal in this herd. Her CWVAL is -$757 relative to an average springing heifer in this dairy. Further, If she were to get pregnant her value to this herd would decrease another $248 because she may be kept another lactation rather than be replaced with a more profitable animal. This suggests that the dairy will make more money, beginning today, if this animal is replaced with an average, fresh, first lactation animal.

 

Animal 6848 has a negative CWVAL but her PGVAL tells us that if she turns out to be pregnant to this current breeding (27 days ago) her value will become +$587 + (-$410) = +$147. She will become $147 more valuable than an average fresh heifer in this herd.

 

Animal 32 has been coded not to breed. The CWVAL shows that she should be replaced and the PGVAL tells us that she would have been $449 more valuable had she gotten pregnant earlier in this lactation.

--- Middle of report deleted ----

The end of the Cow Value report

ID  LACT DIM MILK RV RPRO DSLH DCC CWVAL PGVAL

5413 1 484 0 120 DRY 335 274 1782 2789

2579 1 465 79 130 PREG 127 131 1791 1359

2699 1 332 0 136 DRY 246 246 1814 2821

5324 1 343 82 135 PREG 123 91 1912 1426

 

 

This report lists the most valuable animals at the end. Animal 5324 wins. Notice that if she aborts her value will drop from $1912 to $486 ($1912-$1426). If 2699 aborts her value will drop from $1814 to –$1007 and she should be sold.

 

Key to the Report Headings

ID  Cow ID number

LACT  Lactation number

DIM  Days in milk

MILK  Last test day milk weight

RV  Relative value (internal)

RPRO  Repro code (FRESH,BRED,DRY etc)

DSLH  Days since last breeding

DCC  Days carried calf if pregnant

CWVAL estimate of cow

PGVAL estimate of value of pregnancy

 

Add CWVAL and PGVAL to your vet list

 

One of the best times to decide to stop breeding an animal is when the veterinarian declares her open at a pregnancy exam. Having the value estimates on the vet list may make it easier to make that decision more consistently.

 

 

Parameters from the Cow Value Parameters Screen

Heat Detection Rate is the ratio of heats observed to heats occurred

· Conception Rate is the ratio of conceptions to breedings. Most dairies have heat detection rates between 0.35 and 0.75 and conception rates between 0.20 and 0.60

· Pregnancy Rate is automatically calculated as the product of heat detection and conception rates. It can be interpreted as the percentage of heats that result in a pregnancy.

Voluntary Wait Period is the number of days in milk at which animals in heat will be bred.

Average Days Open is the average days in milk at conception.

· Heifer Cost is the cost to either raise or purchase a replacement heifer. If a significant percentage of heifers die, consider adding that percentage to the purchase price.

Cull Price is the average expected income from selling a cow.

The difference between Heifer Cost and Cull Price is the cash expense of replacing a cow.

·Milk Price is the expected milk price over the next few years per 100 units (pounds) of milk.

· Marginal Feed is the estimated cost of the incremental feed required to get this additional milk. A quick estimate is the cost of 40 units (pounds) of dry matter.

· Maintenance Cost is the daily feed expense to feed a cow not including milk production. A quick estimate is the daily cost to feed a dry cow, or a springing heifer.

· Discount Rate is the expected annual return a dairy should get on money invested today. It is usually slightly higher than the current interest rate.

· Cull Rate is the percent of cows that do not reach the next lactation. The defaults are .20, .30, . 45, .55, .65, .70, .75, .75, Most dairies cull between .20 to .55 per lactation. This number tends to increase with age. Dairies with excellent reproduction and low calf losses can approach .50 unless they market springing heifers.

·305 Milk is the predicted average 305 day milk production for each lactation.

· Persistency is the estimated monthly change in milk production once a cow is past her peak production. The default values are as follows:

Lact 1  0.96

Lact 2  0.94

Lact 3+  0.92

Author notes from Steven Eicker, DVM

The future value of a cow is of course, unknown. This module is based on models that estimate the future profitability of a cow based on the parameters listed above. But certainly, pregnant cows are much more likely to remain in the herd, and higher producing cows are more likely to be more profitable next lactation too. Thus, these predictions should be used as guidelines. They are not meant to replace sound judgment, but to augment it.

 

The value of a cow is always relative to that of a replacement heifer. Thus, a cow with a negative value is a potential cull. A cow with a value of $150 that is diagnosed with a displaced abomasum may be more profitable shipped than treated.

 

The estimated value of a pregnancy can assist a dairy in deciding whether it is worth the effort to breed a cow. Likewise, for a pregnant cow, the pregnancy value can help estimate the cost of an abortion. Open cows with negative pregnancy values should not be bred, as spending money on pregnancy will lower their value!

 

Perhaps the most thought-provoking concept arises when an open cow has a negative cow value, and also has a negative pregnancy value. This means she is worth less pregnant that if she remains open. However, the software algorithm assumes that cows that are not coded DNB are still trying to get pregnant, and that a percentage of the time they will. Thus, this cow will have a lower cow value while she is still eligible to be breed. Her value should INCREASE once she is flagged as a DNB. This makes sense - it is sometimes a profitable decision to flag a cow as a DNB cow. Note that a cow flagged as DNB may still have a positive cow value, until her milk production decreases below that cull/cutoff value.

 

The flip side is also of interest. Any DNB cow that has a positive pregnancy value has hopefully been flagged DNB because of some reason other than current milk production. This pregnancy value may be a crude estimate of the cost of culling her.

 

By necessity, we are modeling the future to predict the future production of each cow. We make lots of assumptions, such as eventually, all cows leave the dairy, and when they do, a replacement enters the herd. Crucial to the model is that a dairy farm will operate to maximize profitability. Again, DNB cows demonstrate some of the fundamental concepts.

 

DNB Cows

Flagging a cow DNB means she will not freshen again. It means that she will be sold once her milk production is "too low". What does "too low" mean? Two possibilities:

 

1. Her feed cost exceeds her income, somewhere around 20 pounds.

2. Her daily profit is less than a replacement, even including the cost ($1/day) of the replacement, somewhere around 50 pounds.

Assuming a dairy is trying to make a profit, the correct decision is #2. The model sells cows once they produce less than this "Cutoff" milk. Let's say cutoff milk is 50#. A cow producing 60 pounds is profitable until she reaches 50 pounds, about two more months. Her expected production is about 55 for 60 days, which generates about 60 * (55-50) = 300# or $30 more than the heifer. Fine, her CWVAL will be about $30.

 

A project of this magnitude is impossible to complete with just one person's effort. The initial idea arose in 1981, and was one of the early goals for developing Dairy Comp 305. Gerry Mitchell and Connor Jameson realized that it would be helpful to have a report every day of the approximate value of a cow to assist in the daily decisions to treat, to cull, and to decide to quit breeding. Shortly after the beginning of the development of Dairy Comp, I met John Fetrow, another dairy veterinarian, with a background in economics. Mike DeLorenzo and workers in Europe developed some models nearly a decade ago that are very similar to the approach we have used here. While I was at Cornell, we received some federal funding to study culling in New York dairy herds, and those efforts contributed. But this project was only brought to realization because of the tremendous efforts by Connor Jameson and John Fetrow, to whom I owe a tremendous debt and thanks.