Studies on the replacement policies in dairy cattle-I. Evaluation of techniques to determine the optimum time for replacement and to rank cows on future profitability

The most important goal of a commercial dairy farmer is maximization of total profit from his farm. This is, among others, reflected by the culling criteria for cows and the criteria upon which bulls are chosen. In most cases culling decisions are based on economic considerations rather than because a cow is no longer able to produce. Culling decisions should be based on the anticipated revenues and costs. Dairy herd improvement organisations, however, mostly rank cows on their realized production capacity. A number of investigations have been made into the optimum replacement policy for dairy cows based on expected net revenues. General guidelines for culling and culling guides for individual cows have been developed. Besides information about the optimum decisions, some techniques offer the possibility of ranking cows within a herd on future profitability. Future profitability is defined as the profit anticipated by keeping the cow until the optimum time for replacement instead of immediate replacement, taking into account the risk of involuntary disposal. It equals the maximum amount of money a farmer could affort to spend in order to keep the cow. A number of techniques have been applied to aid decisions on dairy cattle replacement. In this paper techniques which have been used to determine the optimum replacement decision are evaluated. Some general replacement principles will be described which have been developed for the replacement of assets like machinery. Subsequently, the application of these general principles to dairy cattle will be discussed. The principles of dynamic programming and their application to dairy cattle replacement will be treated separately. Profit equations, representing the realized profitability of cows have been used to determine the economic importance of herd life. The replacement principles described in this paper are also relevant for the calculation of these equations as will be shown in the last section. This paper serves as a basis for further investigations into the optimum replacement policy in dairy cattle.