The Select Sires Podcast - Ep. 2 - More Profit Through More Lactations

News and Updates
1/5/2022

In this second episode of the new Select Sires Podcast, we continue the discussion of longevity on the dairy farm, specifically looking at how profitability through more lactations plays into the equation.

Dr. Bo Harstine, director of research here at Select Sires Inc., helps to moderate the discussion between Julie Ainsworth, reproductive specialist and dairy production analyst coordinator with CentralStar Cooperative, plus Gary Sipiorski, private dairy consultant and a member of the board of directors of Citizen State Bank.

Tune in with the audio player below or by subscribing through your favorite podcast platform.


Julie Ainsworth

Julie Ainsworth
reproductive specialist and dairy production analyst coordinator
CentralStar Cooperative

Gary Sipiorski

Gary Sipiorski
Private Dairy Consultant


FULL TRANSCRIPT

Welcome to the Select Sires Podcast talking Your Success, Our Passion, starting in 3-2-1.

Joel Penhorwood

And welcome everyone to the Select Sires Podcast. I'm Joel Penhorwood.

In this episode, we talk achieving more profit through more lactations. We’ve been talking quite a bit lately about the importance of breeding for longevity, and today I think will really highlight some examples of why. Our outstanding guests take an in-depth look at the facts and figures behind the value of longer living dairy cows. Dr. Bo Harstine, director of research here at Select Sires Inc., helps to moderate the discussion between Julie Ainsworth, reproductive specialist and dairy production analyst coordinator with CentralStar Cooperative, plus Gary Sipiorski, private dairy consultant and a member of the board of directors of Citizen State Bank.

Before we get to that, let’s hear about our sire of the podcast today with Marc Bolen, Jersey sire analyst. Marc, take it away.

Marc Bolen

Thanks Joel – this is Marc Bolen, dairy sire marketing coordinator and Jersey sire analyst here at Select Sires. Today, I would like to take some time to talk about 7JE1638 Ahlem Kwynn RESPECT. This bull comes from our Jerseyland partners out in California. He is a Kwynn son from a Very Good Volcano and a Very Good Karbala. The third dam is a Very Good Jace, with all having records of over 20,000 pounds of milk. This bull I think is a customer satisfaction kind. He’s got positive Milk, plus percents, high JUI, great semen fertility, and just an all around bull that I think everyone likes the daughters of when they walk herds. I would also like to point out in the CDCB Wellness traits, he is +0.5 for Mastitis, so breed leading in that perspective – an area I think we all need to watch going forward. When you look at his daughters, they have plenty of strength and dairy form, great udders with height and width to the rear udder, and these daughters also have a good sound foot and leg. So if you’re looking for a bull that can check all the boxes and have a great outcome, whether it be fertility, production, or just sound cows that everyone would love, look no further than 7JE1638 RESPECT. I would like to thank you all for listening today, and please don’t hesitate if you ever have any questions about the Jersey breed, please reach out to Herby Lutz or myself.

Joel Penhorwood

Thanks Marc. 7JE1638 RESPECT.

Time now for our main discussion on more profit through more lactations.  Over to Dr. Bo Harstine for the conversation.

Bo Harstine 

Julie, Gary, thank you both for joining us today.

Julie Ainsworth 

Thank you for having us.

Gary Sipiorski

Our pleasure. Thank you.

Bo Harstine 

Let's kick this off.

For our first question. I want to lead our discussion by asking how can dairy producers grow their bottom line without growing their herd numbers?

Gary Sipiorski 

Well, let me kick that off. After 47 years of working with dairy producers, in industry, and dairy producers directly on their farms, and as you said, 28 plus years in the banking industry, there's some things that I've observed that really make a big difference between those that are profitable, and those that are very profitable, and those that are struggle. And really, it's a matter of how do you get longevity out of those milk cows that we have in the barn? Obviously, cow comfort is important. The management strategies that we have are important. But to get that extra year or two of lactation out of animals really goes a long way because we've got those animals paid for, their most productive time in their life when they're in that third and fourth lactation. So we need to make sure that we take care of them. And a lot of times we have young stock coming in that we'll get to shortly in this discussion that also factors in. But some of the things that occur from the management standpoint, is really that plus or minus 30 days of calving. And I see that as important really getting animals off to a good start. If you've got metabolic problems during that period of time, whether it be a DA, whether it be a metritis problem, or ketosis that she runs into special needs are a big factor in many farms today. Highly recommend that dairy producers have those kind of facilities to take care of cows. But we want those animals hitting the milking string strong and going without any health problems at all. But that's really a really key start not only in a particular lactation, but also when we look at the animal's livelihood, and the longevity and how long they're going to be in that particular herd. Maximizing components. I mean just having an additional higher butterfat and protein, and no, that's real big factor when it comes to breeding. And as we looked at selecting sires for different animals, we're going to get paid more and more for that in the future. So that's, that's really a big part. And again, with those mature cows are cranking out that butterfat and protein, low somatic cell count is really important as well, this goes into the management aspect as well. And it's not only the udder that we have those white blood cells that are popping up, but also within the total health of the cow. We know that healthier cows have low somatic cell count, and goes the other way as well. Cows have high somatic cell counts could be more than just mastitis that's bothering those animals. And particularly at a time like this, where we actually have periods where we have milk plants, putting quotas on production, we want to make sure the cows that are in the herd are productive. And of course, that's a whole other topic. But as long as we're dealing with those things, let's make sure we've got profitable cows in the barn. They're healthy cows, and we can keep them for another lactation or two.

Bo Harstine 

Great suggestions, Gary. Julie?

Julie Ainsworth 

Yeah, and I would have some of the same suggestions. As Gary, in keeping somatic cell count low. Somatic cell count not only is that something that you might get paid for and get a bonus for, but it also affects the ability of cows to breed back and produce more. If they've got a high somatic cell count, it definitely cuts into production, reducing the death rate in her herd. Herds with high death rates get no salvage value for those cows. And so that can be a big loss, higher pregnancy rates. That's kind of a no brainer, you've got to get cows pregnant in order to get them back into the high point of production. Good animal husbandry skills that affects not only cows and keeping cows in the herd for a while, but also heifers. If you don't have good animal husbandry skills for heifers, you lose heifers halfway through their point of being raised, which is a complete loss, so you've just lost all the money that you've put into them. A more energy corrected milk per cow. Gary mentioned the components and I think that's really important and reducing net herd replacement costs.

Bo Harstine 

All very good, all very good recommendations. Julie. And I think one thing that we're having a lot of dialogue about at Select Sires, and with producers is use of beef x dairy as well. A lot of people are trying to capture margin in their replacements by making beef cross calves and so I encourage everyone to go out and check our ProfitMAX program and the ProfitSOURCE sires that go into that. And those programs help you implement and design a customized plan that optimizes profitability of those beef x dairy cross calves. And so to move on to our second question, what percentage of the herd should be third lactation or greater, and I know Julie, you work with customers to determine this, so I'm going to have you started off.

Julie Ainsworth 

When I go out and set a goal for my herds, I always want them to get to 40% of third lactation or higher. That's for a couple of reasons. Number one, it takes one and a half lactations just to pay for the cost of having raised that heifer. So if you sell her before that time, you've just lost money on that whole deal, so that becomes really critically important. And 30% first lactation heifers so that we don't have so many heifers that were driving the older cows out of the barn, again, raising too many heifers, and people think that they're genetically superior, and they tend to replace old cows with those heifers. That's also a money losing proposition if you do it too many times.

Bo Harstine 

That makes perfect sense. I think often, we forget to calculate in the total cost of getting the replacement to that age of milking. Gary, you have anything to add?

Gary Sipiorski 

Yeah, over the years, and I totally agree with what Julie's talking about. And I've really struggled with this with different dairy producers, because, yes, we've got better genetics in those heifers. There's no question about that. But we ended up forcing out good cows out of the barn, because we've got these heifers coming in. And I know there's a lot of discussion today about sexed semen, and working with beef crosses, and looking at just the amount of heifers that you need. And there are a number of dairy producers now that are really starting to put together a program a breeding program, and we're looking ahead, I mean, we breed an animal today, it's going to be technically three years before that animal fresh. And so you have to be looking ahead, three and five years out to just what the needs are going to be. It's one thing if you're going to expand the herd, and add heifers. But it's another thing, if you're just raising heifers, and forcing those three and four lactation cows out of the barn, because you have heifers and we're just missing a tremendous opportunity, because that heifer is going to produce what 70, 80% of what that mature cow is going to produce. So we need to make sure that we keep those cows in there and really have a program, sit down business program, breeding program, so we don't have all those additional animals. One thing if we're going to sell heifers, okay, that's another enterprise that you can take a look at. Another thing, if we're going to sell registered cows, that's another thing. But if you're in the business just to produce milk, let's make sure we're bringing in just the amount of heifers that we should. And there's been plenty of studies done here in the last few years that show that there is a way that we can come up with it. It's a guessing game, I understand that. And the last thing a dairy producer wants to be short of heifers are having to go out buy things, but working with the sexed semen and working with a program to get just the amount of heifers is really a profit picture that we need to look at. Because it takes us, what, 1,700 to 2000 dollars to raise a heifer, we better make sure that these are the heifers that we need in let's not overdo it. And let's keep the good productive cows in the barn.

Bo Harstine 

Great points. Gary. I'm going to move on to our third question, what is the financial value of getting cows to the next lactation. And so here specifically we've focused on three plus lactation cows.

Julie Ainsworth 

Yeah, and I put together an example for this so that we can actually look at what the benefit might be. I looked at a current scenario of 3,250 cows. The current death rate in this herd is at 4%. The current call rate, which includes deaths, is at 32%. So it's not too bad on cull rate and the current herd demographics are first lactation 38%, second lactation 26%, and then third and third plus lactation is at 36%. Proposed scenario - so what if we keep the herd size the same at 3,250 cows, we leave the death rate the same because a death rate of 4% is a pretty good death rate in a herd and then we make the overall cull rate at 30% instead of 32. Now we're going to go for herd demographics of first lactation at 30%, second lactation at 30%, and third and greater lactation at 40%. So the current production for 305 day is in first lactation, they're producing 23,068 pounds. Second lactation is producing 28,109 pounds. And third and greater lactation is producing 28,494 pounds. So remember, it takes one and a half lactations just to pay for the cost of raising a heifer. And if we use $18 milk price to figure any additional income that comes from changing our herd demographics. We have a calculator here that we can look at so the 974 cows is what's being sold currently, and we're leaving remember that cows died the same at 140. Our replacement cost, I used 1,800 in this scenario, a cull cow value of 52 cents a hundredweight. Cull cow weight of an average of 1,600. And then our hundredweights of milk sold for the year were 859,942. So their cost per hundredweight produced is at $1.39. Now in our proposed scenario, we put the cows sold at 906 instead of 974. Remember, they weren't too bad on cull rate and we only reduced it 2%. Cows died the same because that was already low. Replacement cost 1,800 - that holds the same. Cull cow value at 52 cents and cull cows weighed at 1,600. Hundredweights of milk sold 859,942. But with only milking 30% first lactation heifers and changing those and milking those older cows, we added 12,473 hundredweights of milk for the year, which reduced our net herd replacement costs to $1.29. In this scenario, and remember, this was 3,250 cows, that was a savings of $65,824.

Bo Harstine 

Really impressive. And you probably do realize some of those differences in profitability with your customers.

Julie Ainsworth 

Oh, absolutely. I mean, I don't have a lot of herds that are at 40% third and greater lactation cows, but I do have a few. And those herds are really cranking out the milk and their heifer pens are less crowded because they're not raising too many heifers. And that really has benefited them in the long term.

Bo Harstine 

That's great. Gary, you have a comment to add?

Gary Sipiorski 

Yeah, I'm going to give Julie an A+ on that particular amount of numbers that you just looked at. And obviously, spending the time in lending and on the loan committee at the bank, these are things that we look at all the time. And I just want producers to take a look at that simple dime difference. $1.39 versus $1.29. And I know producers get very busy at what they're doing. And not only working with the cattle, but the crops and all of the other activities around the farm. And that just needs to be more time spent on looking at the numbers. And I really compliment you Julie to be sitting down with your producers and doing this. I wish every herd out there would be doing this. As we look at there's new herd facilities being built throughout the United States, particularly in the Midwest. And that cost of production is just constantly being driven down, and we have to be competitive. But when you're leaving a dime, or 20 cents on the table, that is huge. And if you can take advantage of that and harvest that, just adds to the bottom line. And remember, we're not in the cropping business where we only harvest a crop once or twice a year. We're in the dairy business, we harvest the crop three times a day. So dimes and nickels and quarters add up big time. So pay attention folks to really what's being talked about here and sit down and look at the numbers and put the numbers together. And it isn't going to be perfect the first time you do it but keep working on it. And just be aware that those little bit of change per cow on a per day basis amounts to additional profitability without having to grow that herd.

Julie Ainsworth 

There is a little saying I like to use with my dairies, I have some that think they want to raise heifers to sell. I say, well, I know that not raising too many heifers will always make you money, but you're speculating if you think selling heifers is going to make you money.

Bo Harstine 

Great point, Julie. Gary, I like that analogy. I really do. And Julie, I appreciate everything you're doing for the industry. I'm going to shift our conversation a little bit to answer a few questions we've received from our social media followers. Brian from Facebook has asked, can you explain the formula behind Productive Life?

Julie Ainsworth 

Productive Life simply measures how long cows survive in a herd after they calve. And it's measured in months, and it's measured from the average. So if she was +5.0 for Productive Life, she would live in a herd five months longer than the average animal.

Bo Harstine 

Makes sense. And then our last question comes from an Instagram follower who's asked what should I focus on to achieve more lactations Productive Life or Dairy Wellness Profit index, DWP$.

Julie Ainsworth 

When we do our genetic audits out in herds, we look at Productive Life, but when we look at Productive Life, we look at the bottom quartile for Productive Life versus the top quartile for Productive Life. And then we look at the health traits. So I know that DWP$ and Productive Life are highly correlated, because all the health events within the low Productive Life are higher than the cows that have the high Productive Life who have the much lower health events. So just to look at this chart from Zoetis, which is the cost of diseases. You can see the different diseases and then what the culling risk is, so if we want to keep the cows in the herd a long time, for instance, mastitis, with a 32.7% culling risk, is going to be a real problem for us. So in terms of what which one you should use, I prefer to use an index rather than just Productive Life. Productive Life will come along with a lot of those indexes, but it will also take in other economic factors. Production becomes very important, for instance, and somatic cell becomes very important, all those things become important so and if I have my preference, I would like to use the new Select Sires index, which is Herd Health Profit index, because that counts for a little bit of Type and I like to have a little bit of Type within my indexes.

Bo Harstine 

Great suggestions.

Gary Sipiorski 

Julie, I'm going to add to your comments there with that Zoetis example. And this has been a study that's been done a number of years ago, and it still makes sense. That cost per case, I like to use those numbers and I like to call them phantom numbers. These are phantom dollars that never show up in the milk check. Because they're going out in expenses. And the higher the expenses, the more expense that you have on there, and the higher that number that is. So dairy producers really need to take a look at those particular, six different items. Because these are huge management items. And a lot of it goes back to that plus or minus 30 days that I mentioned before. But let's capture those phantom dollars and let's bring them back to the mail check in the checkbook on the farm.

Bo Harstine 

Very good. This concludes our questions for today to wrap up the conversation, is there anything else that either of you would like to add?

Gary Sipiorski 

Yeah, I'm going to add this and really ask dairy producers, who's the most what is the most important cow in the bar? I really want you to think about this. And the cow that's the most important is the ghost cow. That's what I call the invisible cow. And I've heard that mentioned over the years from time to time, but I call her the ghost cow. Why is that? Because she freshens and cleans on time. She goes right back in a the milking string and recovers without any problems, right? She eats a lot. In fact, she's very efficient when it comes to the feed that she eats, we call that feed efficiency. And I know there's studies going on right now trying to identify that. She breeds back, sometimes the first time that we breed her. And actually the only time we see this ghost cow is when she comes through the parlor. So she's invisible, she's out there, and we just really need to get more of those cows in the barn. I want to really emphasize once again the importance of that three to five year program just to be thinking ahead, having a business plan. Again, emphasizing the sexed semen. Right now we've got the breeding of beef bull semen to dairy cows, and I know that's a mixed animal. But there's some dairy producers that have good contracts, I think 250 bucks for that animal. So that's adds to the bottom line, as well. And just remember that all of the activities that we have on the farm and there's so many that a dairy producer deals within a day's time, all those profits have to funnel down. All of the cattle that we have - whether it be registered or not - all of the activities that we do everything inclusive, we have to be able to capture that dime and 20 cents, because it has to all come down to cost of production and there's got to be something left over. Every dollar we spent, we need to at least show 15 cents on a farm. It's got to funnel down into profitability. And that's what makes the dairy business what it is today and what it'll be in the future.

Bo Harstine 

Thank you very much. I think myself and all of our producer customers can appreciate that information. And with that, Julie, Gary, I thank you both for answering our questions today. You've done a wonderful job with helping our farmer owners better understand the value of longer-lived cows.

Joel Penhorwood

And thanks Bo. That wraps up our discussion on this episode of the Select Sires Podcast. For more information on how to make longevity her legacy, go online to www.selectsires.com/longevity. Until next time, I’m Joel Penhorwood. We thank you for tuning in to the Select Sires Podcast.

 


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