Economics of using beef semen on dairy herds

Abstract

The economic value of using beef semen in dairy herds depends on the market value of calves (crossbred beef and dairy), market price of semen (beef, conventional, and sexed), herd reproductive performance, and semen combination strategies. Due to the complex interaction among all these factors and their inherent changing conditions, the quest for an optimal strategy is best served by the application of an integrated model and a decision support tool adaptable to ever-changing farm and market conditions. We have developed a model and a decision support tool to calculate the income from calves over semen costs (ICOSC) in response to user-defined beef semen crossbreeding strategies in combination with sexed and conventional semen utilization. The model follows a Markov-chain approach in which animal (heifer and cow) statuses (age, months after calving, lactation, pregnancy, calving) are simulated monthly. Replacement balance is calculated as the difference between demand and supply of calves in function of selected semen utilization protocols, which could include beef, sexed, or conventional semen. A case study was performed in a 1,000-cow virtual Holstein herd with 35% turnover rate and 7% stillbirth rate. Five strategies of beef semen utilization on adult cows (0 to 100% in 25-percentage-unit intervals) were combined with 6 strategies of sexed semen use [none (NS), first service in heifers (1H), first and second services in heifers (2H), 2H + 20% top genetic cows (TOP), 2H + first service in primiparous (1C), and 1C + first service in second-lactation cows (2C)]. All animals not bred to either sexed or beef semen were bred to conventional semen. Having a price of beef calves ~4 times greater than the price of a dairy calf and having the price of sexed semen ~2.3 times greater than the conventional or beef semen determined that the optimal breeding semen protocols that concurrently maximized the ICOSC and produced enough replacements were 100% beef semen use after 2C sexed semen protocol (ICOSC = $2,001) for medium reproductive performance (~20% 21-d pregnancy rate) and 100% beef semen after 1H sexed semen protocol (ICOSC = $6,215) for high reproductive performance (~30% 21-d pregnancy rate). These strategies were consistently the best options under several feasible market conditions for herds with medium and high reproductive performance. However, the optimal ICOSC was negative or marginally low for low-performance herds (~15% 21-d pregnancy rate), for which the opportunity to use beef semen is minimal or nonexistent.

Summary: The difference between the extra revenue from selling crossbred beef (and dairy) calves and the extra costs incurred for beef (and sexed and conventional) semen can be defined as the income from calves over semen costs (ICOSC). An analysis of ICOSC under different market conditions indicated that the use of beef semen on dairy is an attractive business proposition for herds with at least a ~20% 21-d pregnancy rate when the price of crossbreed calves is at least double the average price of dairy calves, even when the sexed semen price is more than double the conventional and beef semen price.