As seen in Progressive Dairy
Give me just one number. That’s what we all want, right? One simple number to focus on and improve our chances of reaching our goal. While this common mantra has merit, it is truly a double-edged sword.
Admittedly, I often live on the other edge of that sword, where I can get mired in the details. Regarding reproductive success, that “one number” is pregnancy rate, and for nutrition outcomes that “one number” is typically income over feed cost (IOFC). But what happens when you save on feed cost to improve IOFC and inadvertently reduce pregnancy rate or increase pregnancy losses, for example? Or when you’ve doubled your Ovsynch and ramped up your genetics game – and yet continue to suffer from higher pregnancy loss? No doubt, the cow is one system … feed goes in one end, and milk and calves come out the other. Feed costs go in, and energy-corrected milk (ECM) revenue and reproductive revenue are the overlapping result. Let’s consider another, lesser-known “one number” metric that has the potential to help tie these metrics together: cost to obtain a pregnancy.
Cost Per Pregnancy Defined
Let’s first define how cost per pregnancy (and cost per calf) are calculated. Very simply, add up all the different cost buckets that go into creating pregnancies on your dairy, and then divide by your total confirmed pregnancies for the year. Cost per calf takes it one step further by subtracting out the lost pregnancies (aborts) from total pregnancies and using that as the denominator. This method spreads the cost of your reproductive program across only pregnancies that resulted in a calf. From the several dozen discussions we’ve had with dairy producers in calculating their cost per calf, this number has varied dramatically, from less than $100 per calf to nearly $200 per calf. This variation begs the question: Why?
How to Find Your Numbers
While calculating your cost per pregnancy is not complicated, there are a lot of moving parts given the ever-expanding reproductive management options. Therefore, we’ve developed a handy spreadsheet (available for download at reprovaluator.com) that allows you to enter your current reproductive costs and results.
Here are the main cost buckets that will cover most scenarios: semen (sexed, conventional, beef, IVF); synch program; labor and treatment protocols; activity collars; breeder costs; veterinary work; and record-keeping. For an accurate hourly labor rate, be sure to include all expenses, such as payroll taxes, worker’s compensation and benefits. Some of these costs you may know off the top of your head, and others may take some digging to uncover. Go ahead and dig. They are worth knowing.
The only reproductive results needed for these calculations are total breedings, pregnancies and abort events for the year. The events table in DairyComp is the best place to pull these totals for your herd. Enter Events\si for lact> 0, select pregnancies, breedings and aborts from table options and view the events by month. Be sure to select a one-year date range that ends in a month that has been fully vet checked, so the most recent month is complete.
Once your reproductive outcomes and costs are entered, the Repro Valuator will calculate your cost per pregnancy, cost per calf and give you perspective on how the major cost buckets compare and contribute to your total investment in your program (Figure 1).
It is also interesting to run scenarios by modifying your current program to see how those changes would impact your cost per pregnancy and per calf (modifying synch protocols, mix of sexed versus conventional versus beef semen, activity collars versus synch programs or the addition of an IVF program, for example).
Why Cost Per Pregnancy (and Per Calf) Matters
Whether your cost per calf is $100 or $180, what impact does this have on other management decisions? While the list of potential implications is long, here are a few areas to consider:
- Reproductive Success: Are you getting the pregnancy results needed for the investments you are making in your reproductive program? Some dairies with the lowest cost per calf are low not because they have a bare bones program, but rather they have stellar reproductive results. On the other hand, if you’ve gone to Double Ovsynch, for example, and have not seen the significant improvement in pregnancy rate you expected, that will drive your cost per calf upward.
- Nutrition Decisions: Given the investment you have made to obtain a pregnancy, how does this impact your nutritional strategies to reduce pregnancy loss? Are there nutrients, such as EPA/DHA omega3s, that have a much stronger return on investment (ROI) calculation when the impact on improving embryo development and reducing early embryo loss is brought into that equation?
- Transition Management: What impact does your cost per calf have on the financial impact of dead on arrivals (DOAs)? We often think about the lost value of the calf, but adding the investment prior to birth can often double the financial impact. Perhaps this knowledge will spark a refocus on management practices in the transition period that can improve delivery of healthy calves.
- Culling Strategy: How does knowing your total investment to have a calf born on your dairy impact your culling strategy? Greater investment means it takes that animal more days as a milk cow to break even.
- Heifer-Raising Costs: How does this change your perspective on what it costs to raise a heifer, given the actual cost you’ve already incurred by day one of her life?
You may now see why knowing the total cost to obtain a pregnancy really matters. And certainly 21-day pregnancy rate still matters too. In fact, an analysis from Dr. Victor Cabrera from the University of Wisconsin shows there’s tremendous value to be gained by continued improvement in pregnancy rate, even at the upper ranges of 30% and above (Figure 2).
One word of caution is: Lower isn’t always better on cost per pregnancy, since this is simply the cost side of the profit equation, with both ECM and calves as the revenue result. And with the incorporation of beef semen, beef embryos, genomics and IVF programs, reproduction can become a diversified source of revenue … perhaps even a profit center.
Cost per pregnancy (and calf) is not a “one number” solution but rather a deeper dive into the details of your reproductive management decisions that weigh heavily on your profitability. How quickly you get cows pregnant once you decide they are eligible (pregnancy rate), plus how much it cost you to obtain those pregnancies (cost per pregnancy/calf) could be a dynamic duo of numbers that together give you a better measure of success. Then add IOFC, and we may have the trifecta of metrics.