Seasonal Effects on Income Over Feed and Replacement Costs

¹ Department of Animal Science
² Department of Agricultural Economics, Texas A&M University, College Station 77843

Lactation curves were estimated from DHIA data and incorporated into a model for annualized net present value. Calf value, expected daily milk income, and feed costs were discounted to the time of first freshening and accrued over a three-lactation decision horizon. The cow was assumed to be culled at drying off in the third lactation after a number of DIM determined by the model, and, at this time, discounted salvage value was offset against initial replacement cost. The model was interfaced to a nonlinear optimizing program to maximize annualized net present value for calving date and days open by parity with rolling herd average for milk, replacement cost, calf value, and salvage value as input variables. Difference in minimum and maximum annualized net present value was estimated to be 48% for cows that were managed differently only for first calving and subsequent days open. For cows that calve during spring, days open from first and second lactation that maximized annualized net present value ranged from 85 to 115 d for all but one scenario; however, for cows that calve in other months in a herd with a 7500-kg rolling herd average for milk, all first lactation days open were >115 d.

Key Words: profitability • days open • seasonal effects • economic model

Submitted on June 15, 1992
Accepted on February 1, 1993

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