Hugh Chester-Jones, Animal Scientist, University of Minnesota

September 24, 2005 

The costs of raising dairy heifer replacements represent 20 to 25% of the total costs of milk production. Benchmarks for the economics of raising dairy heifers, whether custom or home raised, provide opportunities for application to individual farm situations and to identify cost saving control areas. The investment in dairy heifers is an incentive to raise high quality productive heifers as economically as possible for the labor, feed resources and facility options available on each farm. Keeping heifers healthy and attaining within breed growth goals at critical phases is essential to protect the investment. The number of replacements required to maintain herd size impacts overall heifer raising costs. Age at first calving is another factor that can reduce raising costs. Feed and labor are key control factors that will impact the bottom line.

An excellent 1998 study at the University of Wisconsin by Pat Hoffman and others laid the ground work for understanding cost relationships for raising heifers in the Midwest. The study also emphasized the variation among farms. This study surveyed 62 Holstein herds. An average cost of raising heifers from birth to first calving age was $1,360, with a range of $922 to $1,807. Cost/day from birth to pre-freshening was $1.69 (range $1.33 to $1.94). Highest costs were from birth to 9 weeks of age (average weaning age 53 days) averaging $2.78/calf daily (range $1.51 to $6.75). Feed accounted for 40%, labor and management 38%, fixed costs 7%, and variable costs 15%. From 9 weeks of age to pre-freshening average daily costs were $1.61/heifer (range $1.24 to $1.88) with feed accounting for 60%, labor and management 13%, variable costs 14%, and fixed costs 13%.

Feed costs are the most prevalent area where costs can be refined. Data in Table 1 is taken from the Wisconsin survey showing feed costs from 3 months to pre-freshening. Again, the range is clearly shown.

Table 1. Variation in heifer feed costs of 287 heifer groups on 62 commercial dairies^a

^aAdapted from Hoffman (1999).

Understanding heifer nutritional requirements and how to adjust to changing environments without over conditioning is important. Other feed cost factors include feeding precise amounts of minerals and vitamins, not overfeeding protein, using efficient bunk feeding management techniques, using acceptable management tools such as ionophores, and keeping good control on forage costs. If there are opportunities to integrate intensive rotational grazing on the farm, there is potential here for cost control with good management. A recent Minnesota 3-year study on a commercial livestock farm found that intensive rotational grazing of heifers from 400 to 800 lbs reduced total daily costs by 39 cents/heifer compared to confinement heifers.

On most farms, the 2nd highest costs for raising heifers is labor. Labor efficiencies should be measured to see where improvements can be made especially from birth to weaning. Grouping of heifers in relationship to growth phase and ration formulation can improve labor management. The average heifers per labor hour is a criteria to evaluate labor efficiency. In a 2003 Cornell study by Jason Karszes on 8 New York dairy farms (average 1st calving age 22.5 months; calving BW 1,302 lb; average daily gain 1.78 lb), pre-weaned heifers /labor hour was 9 and post weaned heifers was 66/labor hour. Pre-weaning the range was 6.7 to 11.4 heifers/labor hour and post weaning 36.3 to 96.4 heifers/labor hour. Looking at facility design and management or use of grazing systems could potentially help with improving labor efficiencies. In the Cornell study, the total investment for raising heifers by stage of growth was summarized (Table 2). The relative differences between total costs by stage of growth will help evaluate the expenses on individual farms.

Table 2. Costs of raising dairy heifers by stage of growth^a

^aAdapted from Karszes (2005).

The average total investment for raising heifers on these 8 New York dairies was $1,429 plus a $151 value put on each heifer. Feed accounted for 49%, labor 17%, interest on investment 7%, and building overhead 5%.

Keeping heifers healthy, meeting growth goals without over conditioning, lowering calving age, lowering cull rates, reducing feed costs and improving labor management are key factors for heifer enterprise management. There are areas where costs for raising heifers can be combined with costs of the overall dairy enterprise. These will include managing forage inventories, ability to spread fixed costs over more activities, potential for fully utilizing management resources and potential use of feed sweeping from the dairy herd (after knowing compositional analyses). First and foremost, however, is being able to separate costs in order to provide a better picture of the heifer enterprise to help make good management decisions.