Optimizing Replacement Decisions for Finnish Dairy Herds

P. J. Rajala-Schultz, Y. T. Gröhn, H. G. Allore

The purposes of the study were to determine how "an optimal herd" would be structured with respect to its calving pattern, average herdlife and calving interval, and to evaluate how sensitive the optimal solution was to changes in input prices, which reflected the situation in Finland in 1998. The study used Finnish input values in an optimization model developed for dairy cow insemination and replacement decisions. The objective of the optimization model was to maximize the expected net present value from present and replacement cows over a given decision horizon. In the optimal solution, the average net revenues per cow were highest in December and lowest in July, due to seasonal milk pricing. Based on the expected net present value of a replacement heifer over the decision horizon, calving in September was optimal. In the optimal solution, an average calving interval was 363 days and average herdlife after first calving was 48.2 months (i.e., approximately 4 complete lactations). However, there was a marked seasonal variation in the length of a calving interval (it being longest in spring and early summer) that can be explained by the goal of having more cows calving in the fall. This, in turn, was due to seasonal milk pricing and higher production in the fall. In the optimal solution, total replacement percentage was 26, with the highest frequency of voluntary culling occurring at the end of the year. Seasonal patterns in calving and replacement frequencies by calendar month and variation in calving interval length or herdlife did not change meaningfully (< 1%-2% change in the output variables) with changes in calf, carcass or feed prices. When the price of a replacement heifer decreased, average herdlife was shorter and replacement percentage increased. When the price increased, the effect was the opposite.