Decision support heuristic to improve the profitability of dairy farms

Abstract

The milk economy is one of the most common and sensitive points in agriculture. The dairy cattle breeding has many important decisions, among them to find the proper time when the cow is to be culled. This decision is influenced by many complex factors, out of which the most important one being the change of the reproduction parameters. In other words, the profit value of
keeping a cow depends mostly on its milk production which is highly conditioned by the decision when we sell the animal. This step
means also the restructuring of the cattle of the farm, since the sold cow is usually substituted by a replacement heifer. We have developed a microsimulation model based on real data to improve the quality of the decision. With the help of the microsimulation algorithm applied, we are also able to predict the future life cycle of the cow and the changes in the total profit of the given animal during its lifecycle. In the first part of the paper, we show that by a substantial reduction and simplification of the underlying full model we can calculate the financial consequences of the culling decision based on the reproduction data and their statistical distribution. Further we applied this line of thoughts the developed microsimulation method to model the life cycle of cows. We demonstrated that in this way we are able to precisely estimate the productive, profitable part of the life for the given animal. Further we have calculated which culling decision is the most profitable regarding the changes in costs and incomes.