DairyNZ: Strong payouts offset high farm costs
The dairy sector is in a relatively stable position, with strong milk price payout forecasts continuing to offset ongoing high farm costs, according to DairyNZ.
The manager of DairyNZ subsidiary New Zealand Animal Evaluation Ltd stated “AI using high breeding worth (BW) bulls is a cost effective way to continuously improve the profitability of your herd and to maximise cow capital value."
The use of service bulls -- part or whole season -- complicates grazing management and brings hidden costs such as feed and damage to infrastructure. Bulls also introduce risks to staff safety and animal health.
Farmers deciding to opt out of AI this year will need to consider their strategy for herd replacements in the 2017-18 season. Calves reared from service bulls are highly likely to be genetically inferior, and this will have a detrimental impact on farm profits.
It is estimated that bringing just one year of naturally mated replacement heifers into your herd will cost at least $30,000 in lost profit over ten years. This loss can be reduced by buying surplus heifers from other farmers, but this is likely to be expensive.
“Farmers who need to buy replacement heifers will be vulnerable to market supply and demand, and could end up paying top dollar for below average genetic merit animals,” says Bryant.
Farmers looking to save cash or gain extra revenue next season could consider other AI options offered by breeding companies.
This could include more targeted allocation of elite dairy sires to their highest BW cows, while using cheaper beef or short gestation-length sires over low BW/PW cows.
