It’s no secret that sustaining profitability in the dairy industry has been a challenge in recent years, with the strain of lower milk prices testing the resolve of many dairy producers. Inevitably, one of the byproducts of a difficult economy is a renewed focus on profit drivers. Even in the best of times, a focus on profitable production builds equity, enables future business expansion, and fulfills operational requirements for employees and ownership. For dairy producers, this should include assessing what drives profitability of individual animals within their herd.
A recent study examined the relationship between herd production metrics and net income. The key drivers identified, in rank order from largest influence, were net herd replacement cost, 21-day pregnancy risk, heifer survival, energy corrected milk production, somatic cell count, and cow mortality (Table 1). While these insights are valuable in benchmarking herds, they also provide important guidance on what makes one cow more profitable than another. While perhaps obvious to the seasoned dairy producer, this information tells us that profitable dairy cattle are those that stay in the herd longer, achieve timely pregnancy, avoid mastitis, and put quality milk in the bulk tank lactation after lactation. What may not be so obvious is how we identify those cows, and, equally important, how we get more of them?
The influence of genetics on traits like milk production, fertility, and longevity is well understood. Furthermore, the Holstein breed has made substantial improvement in these traits during the last two decades (Figure 1). Recent gains have been further bolstered through the application of genomic technologies that increase the accuracy of selection decisions. However, direct genetic predictions for health and wellness traits – including key traits like mastitis, metritis, and calf health – have only become available more recently. These new predictions have created opportunity for more comprehensive genetic management of phenotypic outcomes influencing profitability.
Figure 1: Council on Dairy Cattle Breeding (CDCB) genetic trends for Holstein females born 1990-2015. Traits examined include milk production (Milk), somatic cell score (SCS), productive life (PL), livability (LIV), and daughter pregnancy rate (DPR).2
Understanding the individual traits that contribute to differences in profitability among cows is no doubt important. However, at a practical level, we need to identify a single metric we can use that summarizes genetic merit across a range of economically relevant traits. Fortunately, modern selection indexes do exactly that, providing a methodology for looking at total genetic value and avoiding the pitfalls of single trait selection.
There are many indexes available in the Holstein breed. Some of these indexes are built by assigning emphasis to component traits proportional to their economic value to the dairy. These bioeconomic indexes largely seek to describe differences in genetic potential for lifetime profit among animals. Examples include Net Merit (NM$), Fluid Merit (FM$), Cheese Merit (CM$), and Grazing Merit (GM$) produced by the Council on Dairy Cattle Breeding, and Dairy Wellness Profit (DWP$®) produced by Zoetis for animals tested with CLARIFIDE Plus.
As with any predictions of genetic merit, it is important to understand how well indexes correlate to what actually is observed in the cow. In the case of a bioeconomic index, the question we should be asking is whether the index actually describes differences in observed lifetime profit. This is a challenging question because it requires following cows throughout their life and summarizing their performance relative to the genetic prediction that would have been available as a calf prior to entering production. Zoetis has examined a number of herds that have been using genetic testing as part of their management strategy for the last 7 to 8 years. Herd records were used to calculate the net profit per cow expressed as the net present value (NPV) based on their actual performance from first freshening to exiting the herd – summarizing all of the data related to milk and solids production, reproductive efficiency, cost of treating illness, and cull value. This NPV was then compared against the DWP$ value that those females would have had as a calf, without consideration for her future production records. Data from a cohort of Holstein females born in 2011 shows a strong correlation between DWP$ and NPV. When ranked by DWP$, the top 10% of females were predicted to have $1,100 greater lifetime profit than the bottom 10%. The economic data shows that the animals in the top 10% had an actual NPV that was $1,700 greater than the bottom 10%. Further, we see a strong linear association between DWP$ ranking and average NPV across the deciles.
Armed with this confidence in the DWP$ index, it is logical then to conclude that increasing the average DWP$ of the herd will increase the average NPV or profitability of the herd. There are several ways to achieve this, driven largely by making some very basic decisions about a herd’s breeding program and use of reproductive technologies. On average, cattle with higher DWP$ scores will produce offspring with higher DWP$ scores. So let’s consider preferential use of sexed semen in heifers with higher scores so that the next generation of female calves will come disproportionately from those better heifers. Let’s also consider how herds that leverage embryo transfer or in vitro fertilization (IVF) use DWP$ to select donor females. We should be looking for sires with higher DWP$ scores when deciding which bulls to put in the semen tank. And finally, we should be looking at those heifer calves with DWP$ scores in the bottom 10-20% and asking ourselves whether knowing that she is likely to be $1,000 or more less profitable over her lifetime changes our mind about whether we want to keep her on the dairy as a replacement.
The economics of dairy production require an exquisite focus on sustained profitability. Genomic technologies, including characterization of fertility, health, and longevity, are demonstrating the importance of individual animal differences in achieving this goal. It is improtant that each investment in improved genetic quality stays within the herd and becomes a permanent fixture in economic success of the dairy.
Dr. Jason Osterstock is the head of Global Genetics at Zoetis based in Kalamazoo, MI, USA. He holds degrees in animal science and veterinary medicine from The Ohio State University, and a doctorate in epidemiology from Texas A&M University. Over his career, Dr. Osterstock has worked in private veterinary practice, on the clinical and research faculty at Texas A&M, and in global technical and marketing roles at Zoetis.
 Data on file, Dairy Scorecard Project no. 14CARG0TH01, Zoetis, Inc.
 Council on Dairy Cattle Breeding, Trends for milk, somatic cell score, productive life, livability, and daughter pregnancy rate for Holstein or Red & White, calculated April 2019
 CLARIFIDE Plus Dairy Wellness Profit Index and Wellness Trait Index Fact Sheet, Zoetis, Inc.
 Data on file, January 2019, Zoetis, Inc.
 Dr. Jesse Randall, from research conducted for capstone project (A Tale of Two Tails: An Analysis Comparing the 10th (Left-Tail) and 90th (Right-Tail) Percentiles of a Genomic Prediction Index to Observed Lifetime Phenotypic Value of Holstein Dairy Cows) in partial fulfillment of requirements for AgEcon 686, Purdue University, West Lafayette, IN, May 2018.
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