To Cull Or
—Bradley J. Hilty
Senior Extension Associate
Information Management
Penn State University
Dairy Alliance
I once heard a noted dairy
business consultant comment
that the answer to high milk
prices is to add more cows and
the answer to low milk prices is
add more cows.
Although his comments were
made somewhat in jest, this
thinking does have some merit.
The reasoning is as follows: in a
period of high milk prices,
adding cows increases overall
profits of an already profitable
dairy; in a period of low milk
prices, adding cows can spread
the fixed costs of the business
over greater units of production,
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Not To Cull
thus decreasing the total cost of
production, increasing net prof
its and improving cash flow.
Both lines of thinking are
based on the premise that
adding cows on an individual
farm will not lower the price of
milk. -However, when many
farms react to prices, low or
high, in such a manner, supply is
affected. If not offset by an in
crease in demand, prices will de
cline.
In light of the current dairy
business environment, much at
tention has been given to a dif
ferent approach to dealing with
low milk prices. The theory is
that if each dairy operation
would cull two extra cows,
supply would decrease to a level
more in line with demand,
which would result in higher
prices.
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The concept behind this
theory is that every operation
has two cows that are not
making any money for the busi
ness. Whether this reasoning is
correct can only be determined
on an individual basis by closely
examining the costs incurred by
the low producing cows in a par
ticular herd.
In periods of low prices, many
dairymen are reluctant to dry
off or sell animals because it will
decrease volume. They see the
decrease in volume resulting in
lower gross profits (i.e. less
money to pay the bills, mortgage
and owner draws). Although
this is true, in many instances
the corresponding decrease in
expenses will more than offset
the decrease in milk income, re
sulting in higher net profits (i.e.
money to pay the mortgage and
owner draws.)
Culling decisions should
seldom be made on the produc
tion results of a single test.
There are many reasons for cull
ing animals. These reasons are
separated into voluntary and in
voluntary categories.
Some involuntary reasons in
clude culling cows due to; being
crippled (poor feet and legs),
persistent mastitis problems,
non-breeders, and disease or
death. Voluntary culling reasons
include selling animals for
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breeding stock or selling lower
producing animals to make
room for a higher producing re
placement animal.
The Dairy Herd Improvement
Associations have developed a
list of multiple culling criteria,
which can be used to make cull
ing decisions. Those criteria in
clude:
1. Animals open 250 days and
not yet confirmed pregnant.
2. Animals bred four times or
more.
3. Animals with an average
Linear SCC of 6.0 or greater.
4. Animals producing less
than 80 percent of the mature
equivalent average for the herd.
These criteria can be used
when evaluating the herd for
making culling decisions. If an
animal falls into more than one
category, it is a good candidate
for taking a bus ride to the pack
ing plant. If used on a consistent
basis, unprofitable animals will
be removed from the herd in
timely fashion.
However, on most farms find
ing candidates for the cull list is
not a problem. With an average
cull rate of 35 percent or more,
most of which are involuntary,
the number of voluntary culls
are held to a minimum. As a
result, dairymen are often milk
ing cows that are not paying
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their way. Determining the level
of production at which cows are
no longer profitable is a key step
in determining whether they
should be left in the milking
string, dried off or sold.
At the very least, a cow must
cover the variable costs associ
ated with having her in the milk
ing string. Those expenses
include feed, labor, electric, sup
plies and BST, if it is being used
on the dairy. Many of the other
expenses on the farm are fixed
and will not change whether the
dairyman milks the cow in ques
tion or not. If an animal is cover
ing her variable costs of
production, plus contributing
money toward the fixed costs of
the dairy, she should probably
not be culled, unless space is
limited and a replacement capa
ble of generating greater profits
is available.
If such an animal is culled,
the fixed cost she was covering
will be transferred to the re
maining cows, thus increasing
the total cost of production for
milk produced by those animals.
I have developed a simple
worksheet to help determine the
production level at which an
animal is no longer profitable.
For those of you with comput
ers, an Excel spreadsheet is
available.
When calculating
feed expenses, one
should assign a rea
sonable market value
to the raised feeds.
Only milking labor is
calculated, as feeding
and husbandry labor
hours are fixed and
will not change greatly
if one or two animals
are culled.
Other expenses are
calculated using an
average annual cost
per animal. BST costs
are calculated based
on cost of a dose and
administration inter
val. Both the
worksheet and com
puter program are
very simple to use.
They are very basic in
nature, examining
only the level of pro
duction at which a
cow is no longer prof
itable.
There is a more
complex computer
program, Cow Value,
which analyzes culling
decisions based on a
number of factors, in
cluding, reproductive
economics, milk qual
ity and production
levels. This program is
included with
Dairy Comp 305. It
calculates the value of
the cows in a herd and
determines which ani
mals have the lowest
potential for future
earnings. Cows with
the lowest value are
the first candidates for
the cull list.
Whether you choose
to use a simple tool
such as those dis
cussed above or a
more complex tool like
Cow Value, analyzing
your herd to deter
mine which cows are
losing money will pay
large rewards in the
form of improved net
profits. If, as a result
of the process, supply
is reduced and milk
price increases, the
rewards will be even
greater.