wisconsin herd expansion - 1999 wisconsin dairy modernization survey roger w. palmer and jeffrey...

Wisconsin Herd Expansion-1999 Wisconsin Dairy Modernization Survey

Wisconsin Herd Expansion-1999 Wisconsin Dairy Modernization Survey

Roger W. Palmer and Jeffrey BewleyRoger W. Palmer and Jeffrey Bewley

UW-Madison Dairy Science DepartmentUW-Madison Dairy Science Department

UW-Extension Dairy TeamUW-Extension Dairy Team

Roger W. Palmer, UW-Madison Dairy Science Department

Dairy Modernization Objectives

Dairy Modernization Objectives

Operate with lower investment per animalOperate with lower investment per animal Improve labor efficiencyImprove labor efficiency Improve profitabilityImprove profitability Improve the “quality of life” for dairy farm Improve the “quality of life” for dairy farm

owners and workersowners and workers


Dairy Systems Options

Dairy Systems Options


Modernization – the process of changing management systemsModernization – the process of changing management systems

Modernization/Modernization/Expansion is Expansion is not newnot new

Optimum herd Optimum herd size is size is defined by defined by the the technology technology chosenchosen


Thoughts about ModernizationThoughts about Modernization Direction is more important than speedDirection is more important than speed UnderstandUnderstand

where the industry is goingwhere the industry is going your family’s goalsyour family’s goals

Develop a list of possible strategiesDevelop a list of possible strategies Get opinions from other peopleGet opinions from other people

Evaluate each strategyEvaluate each strategy Keep an open mindKeep an open mind

Make the best decision for ‘your farm’Make the best decision for ‘your farm’


Objective of This StudyObjective of This Study

To survey producers, who recently To survey producers, who recently expanded, to determine:expanded, to determine: what they didwhat they did how happy they are with their choiceshow happy they are with their choices

To provide information to others thinking To provide information to others thinking about:about: expanding their operationexpanding their operation changing their operationchanging their operation


Survey Background InformationSelection Criteria

Survey Background InformationSelection Criteria

Producers who expanded herd size 1994-98Producers who expanded herd size 1994-98 >50% increase if 60-100 cow herd size>50% increase if 60-100 cow herd size >40% increase if >100 cow herd size >40% increase if >100 cow herd size

694 Mailed, 336 Returned, 302 Used (44%)694 Mailed, 336 Returned, 302 Used (44%) Production related information from DHIProduction related information from DHI Facilities types, management and Facilities types, management and

satisfaction values from survey responsessatisfaction values from survey responses


Average Herd SizeAverage Herd Size

1994 103 Cows

Before Most RecentExpansion

136 Cows

Now 252 Cows

Long-Term Goal 453 Cows


Summary Averages (252 herds)Summary Averages (252 herds)Herd Performance Measures 1998 1994 Change Rolling Herd Average-Milk 21,956 20,103 +1853 Average ME Milk 23,698 21,741 +1957 Average Peak Milk 89 84 +5 Average Linear Score 2.9 ---- ---- Days Dry 61 63 -2 Calving Interval (DHIA) 13.8 13.2 +0.6 Culling Rate (DHIA) 33% ---- ---- Days Open 140 126 +14 Age at First Calving 26.1 ---- ----


Operation Performance and Satisfaction by “Type of Expansion”

Operation Performance and Satisfaction by “Type of Expansion”

Comparison Factor

No new facilities

Some new facilities

All new facilities

All herds

Number Herds 31 218 53 302 Number Cows 1998 109 216 483 252 Change since 1994 +49 +119 +339 +150 Rolling Herd Average 1998 20,530 21,920 23,218 21,927 Change since 1994 +2519 +1620 +2321 +1824 Average Days Open 1998 143 136 142 138 Change since 1994 +4 +11 +7 +10 Average Linear Score 1998 3.07 2.89 2.82 2.91 Cows per Full Time Equivalent 30 38 52 40 Net farm income * 3.26 3.59 4.04 3.63 Personal satisfaction with my role* 4.00 4.03 4.25 4.07 Disposable household income * 3.32 3.59 4.08 3.65 Time away from the farm * 2.71 3.29 3.79 3.32 *Average satisfaction from 1 (very dissatisfied) to 5 (very satisfied).


Operation Performance and Satisfaction by “Herd Size”Operation Performance and Satisfaction by “Herd Size”

Comparison Factor

60- 105

106-145

146- 220

221-360

> 360

All

Number Herds 61 62 59 60 60 302 Number Cows 1998 86 126 183 272 597 252 Change since 1994 +39 +55 +93 +165 +400 +150 Rolling Herd Average 1998 19,766 21,642 22,370 22,737 24,113 21,927 Change since 1994 +1631 +1999 +1680 +1842 +2115 +1824 Average Days Open 1998 130 136 143 136 143 138 Change since 1994 -2 +10 +18 +10 +10 +10 Average Linear Score 1998 3.04 2.96 2.83 2.85 2.80 2.91 Cows per Full Time Equivalent 27 34 40 49 51 40 Net farm income * 3.26 3.33 3.77 3.73 4.10 3.63 Personal sat. with my role* 3.98 3.92 4.03 4.10 4.30 4.07 Disposable household inc. * 3.33 3.39 3.55 3.87 4.12 3.65 Time away from the farm * 2.85 3.02 3.22 3.63 3.88 3.32 * Average satisfaction reported on a scale from 1 (very dissatisfied) to 5 (very satisfied).


Labor Efficiency by Herd SizeLabor Efficiency by Herd SizeLabor Related Factors

60-105

106-145

146-220

221-360

> 360

All

Number Herds 61 62 59 60 60 302 Total Hours per Person per week

52

48

46

46

48

48

Yearly Hours per Cow

111

84

72

60

56

77

Cows per Full Time Equivalent

27

34

40

49

51

40

Acres per cow

3.38

3.37

2.64

2.61

2.31

2.87


Determine Differences

4-RowVs

6-Row

Determine Differences

4-RowVs

6-Row


Factors to Consider 4-Row vs 6-Row Freestall Barns

Factors to Consider 4-Row vs 6-Row Freestall Barns

CostCost Cost per cow vs cost per stall (overstocking rate)Cost per cow vs cost per stall (overstocking rate) Cost of self-locks vs sort gates and treatment areaCost of self-locks vs sort gates and treatment area

Cow ComfortCow Comfort Feed space (24” vs 18” inches/cow)Feed space (24” vs 18” inches/cow) Alley congestion (24 vs 18 sq ft/cow)Alley congestion (24 vs 18 sq ft/cow) Air quality (92 vs 79 cu ft/cow)Air quality (92 vs 79 cu ft/cow) Ventilation (barn width)Ventilation (barn width)

Convenience of Animal Handling Convenience of Animal Handling Use of self locking manger stalls versus separation of Use of self locking manger stalls versus separation of animals for health and reproduction treatmentsanimals for health and reproduction treatments Labor cost of herdsman and/or vetLabor cost of herdsman and/or vet Animal stressAnimal stress


Overstocking Effect on Initial Cost of 4-Row and 6-Row Barns

Overstocking Effect on Initial Cost of 4-Row and 6-Row Barns

4-Row4-Row 6-Row6-Row DifferenceDifference

No. CowsNo. Cows 144144 144144

Stocking RateStocking Rate 12.5%12.5% 0%0%

No. StallsNo. Stalls 128128 144144

Cost/StallCost/Stall $1200$1200 $1000$1000 + 20%+ 20%

Total CostTotal Cost $153,000$153,000 $144,000$144,000

Cost/CowCost/Cow $1067$1067 $1000$1000 + 6.5%+ 6.5%


New Freestall Barns with Drive-Thru Feeding

New Freestall Barns with Drive-Thru Feeding

Number HerdsNumber Herds

4-Row4-Row

5353

6-Row6-Row

4242

DiffDiff

1998 Median Herd Size1998 Median Herd Size 245245 247247

1998 RHA Milk1998 RHA Milk 23,64423,644aa 21,73321,733bb +1,911+1,911

RHA Change (’94-’98)RHA Change (’94-’98) 1,9741,974 1,3821,382 +592+592

Stocking Rate (%)Stocking Rate (%) 112112aa 103103bb +9%+9%

Average Linear ScoreAverage Linear Score 2.732.73bb 2.962.96aa -.23-.23

Cost Per StallCost Per Stall $1235$1235 $1212$1212 +$23+$23


Sand vs Mattresses Production Differences

Sand vs Mattresses Production Differences

MattressesMattresses SandSand

Number HerdsNumber Herds 6969 145145


1998 DHI RHA Milk(lb)1998 DHI RHA Milk(lb) 22,51922,519 22,53922,539

Linear SCSLinear SCS 2.882.88 2.802.80

Cows/FTECows/FTE 4545 4040

Culling Rate (%)Culling Rate (%) 3434 3232


Sand vs Mattresses Satisfaction Differences

Sand vs Mattresses Satisfaction Differences

MattressesMattresses SandSand

Number HerdsNumber Herds 6969 145145


Cow Cleanliness*Cow Cleanliness* 4.124.12bb 4.474.47aa

Hock Damage*Hock Damage* 4.224.22bb 4.724.72aa

Bedding Usage and Cost*Bedding Usage and Cost* 4.254.25aa 3.953.95bb

Manure Management*Manure Management* 4.324.32aa 3.433.43bb

*Average satisfaction reported, 1-Very Dissatisfied to 5-Very Satisfied


Cow Preference for Different Types of Stall Base – Wagner/Palmer ‘02

Cow Preference for Different Types of Stall Base – Wagner/Palmer ‘02

Stall Base TypeStall Base Type % Occupied% Occupied % Lying% Lying

SandSand 79%79%cc 69%69%aa

Mattress 1Mattress 1 88%88%aa 65%65%bb

Mattress 2Mattress 2 84%84%bb 57%57%cc

WaterbedWaterbed 62%62%ee 45%45%dd

Soft Rubber MatSoft Rubber Mat 65%65%dd 33%33%ee

ConcreteConcrete 39%39%ff 23%23%ff


Milking Facility PerformanceMilking Facility Performance

Milking Facility Type

Cows per Worker Hour

Turns per Hour

Avg. Number Stalls

Avg. Number Units

No. Herds

Stall barn with pipeline 21 6.6 62 7 65 Flat parlor in old building 27 6.1 12 9 52 Pit parlor in old building 34 4.6 16 14 74 Pit parlor in new building 43 4.3 20 19 107


Parlor SatisfactionParlor SatisfactionSatisfaction Factor

Stall barn with pipeline

Flat parlor in old barn

Pit parlor in old barn

Pit parlor in new building

Number herds

65

52

73

107

Physical comfort of milker *

2.45

3.83

4.10

4.32

Milk quality *

3.28

3.75

3.66

3.70

Safety of operator *

3.31

3.40

4.01

4.38

* Average satisfaction reported on a scale from 1 (very dissatisfied) to 5 (very satisfied).


Parlor Utilization Costs Capital Cost AssumptionsParlor Utilization Costs

Capital Cost Assumptions $18,000 per milking stall $18,000 per milking stall

Building and EquipmentBuilding and Equipment Milk 30 cows/stall 3X Milk 30 cows/stall 3X

6.5 hr/shift @ 4.6 turns/hour6.5 hr/shift @ 4.6 turns/hour $600 investment/cow$600 investment/cow

$18,000 per stall / 30 cows per stall$18,000 per stall / 30 cows per stall


Parlor Utilization Costs Operating Cost Assumptions

Parlor Utilization Costs Operating Cost Assumptions

7 year loan repayment at 9%7 year loan repayment at 9% D-12, 2 people @$10/hr eachD-12, 2 people @$10/hr each 1 hour/milking to clean-up and set-up1 hour/milking to clean-up and set-up 20,000 lb shipped per cow per year20,000 lb shipped per cow per year


Milk Harvesting Cost ($/cwt) with Different Parlor Utilization LevelsMilk Harvesting Cost ($/cwt) with Different Parlor Utilization Levels

UtilizationUtilization

LevelLevelCapital Capital

CostCostLabor Labor

CostCostTotal CostTotal Cost

FullFull $0.58$0.58 $1.09$1.09 $1.67$1.67

HalfHalf $1.16$1.16 $1.17$1.17 $2.33$2.33+$.66/cwt+$.66/cwt

QuarterQuarter $2.32$2.32 $1.32$1.32 $3.63$3.63+$1.96/cwt+$1.96/cwt


Mean Production (1998) by Milking Frequency and bST Use

Mean Production (1998) by Milking Frequency and bST Use

RHA Milk 2x 3x Diff.

No bST

19,830

22,672

+2842 +14.3%

bST

22,078

24,607

+2529 +12.8%

Difference

+2248 +11.3%

+1935+9.8%

+4777 +24.1%

68% of respondents reported using bST


Custom Heifer Raising by Herd Size

Custom Heifer Raising by Herd Size

Herd Size

% of Herds having “Most” or “All” heifers custom raised

60-105

7%

106-145

22%

146-220

28%

221- 360

28%

>360

29%


Reasons for ExpansionReasons for Expansion

Why did you decide to expand your herd? *NumberHerds %

To increase our farm's profitability 265 89%

To improve labor efficiency 217 73%

To improve physical working conditions for operators 207 69%

To get time away from the farm (by using more hired help) 181 61%

To allow a family member to join the operation 103 34%

Other 52 17%*Percentages do not add up to 100% because multiple answers could be selected


Satisfaction With Expansion Choice

Satisfaction With Expansion Choice

If another dairy producer asked you about your expansion project, "Knowing what you do now, would you do it again?," How would you respond? Answer Number Herds % of Herds Yes, the same way 148 51% Yes, only quicker 84 29% Yes, only bigger 66 23% Yes, but slower 17 6% No 16 6%


Expansion AdviceExpansion AdviceBased on what you learned what advice would you give others considering expansion? Comment Herds Plan, Plan., Plan. Consider future needs,. Research, do homework 53 Visit Farms 35 Use consultants 29 Importance of cash flow/loan availability/financial planning 27 Take time/don’t hurry/ go slow 25 Take advice from farmers/consultants 23 Know yourself, your family, your goals 20


Respondents Feelings about Expansion “Best Choice”

Respondents Feelings about Expansion “Best Choice”

Comment given by respondent NumberHerds

Switching to parlor/change to new parlor/efficiency of parlor 80Switching to freestalls/building new freestall barn 68Sand 36TMR/feeding convenience 27Employee relations/labor efficiency/working conditions 24Economics/profitability/cash flow/loans 21Family time and time off 19


Respondents Feelings about Expansion “Worst Choice”

Respondents Feelings about Expansion “Worst Choice”

Comment given by respondent Number Herds

Manure handling

41

Not hiring contractor/contractor performance

17

Loans/cost overruns

13

Disease introduction

10

Facility design-curtains, sidewall, ventilation, size, etc.

10

Planning/timing problems

8

Building without future in mind

8


Summary Respondents indicated:

Summary Respondents indicated:

Their willingness to share experiencesTheir willingness to share experiences Most were happy they expandedMost were happy they expanded That after expansion theyThat after expansion they

had a better life stylehad a better life style their labor efficiency increasedtheir labor efficiency increased their operation was more profitabletheir operation was more profitable

They would do it again, but bigger & fasterThey would do it again, but bigger & faster They plan to double herd size againThey plan to double herd size again

Wisconsin Dairy Modernization Summary

Wisconsin Dairy Modernization Summary

A complete summary of the results A complete summary of the results can be found on the University of can be found on the University of

Wisconsin-Dairy Science web page Wisconsin-Dairy Science web page (http://www.wisc.edu/dysci/), under (http://www.wisc.edu/dysci/), under

Management Publications Management Publications

wisconsin herd expansion - 1999 wisconsin dairy modernization survey roger w. palmer and jeffrey...

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