The total cost of rearing a heifer on Dutch dairy farms: calculated versus perceived cost

Jonkos

Jonkos is an economic tool, which has been developed to calculate the cost of rearing young stock. Jonkos was developed to raise farmer awareness about the cost of rearing young stock. The estimation can be made as farm-specific or as general as the farmer wishes, by entering either general information or detailed farm information. The tool calculates both the total cost for the dairy farm and the cost per heifer. Jonkos is developed in Microsoft Excel (version 2010) and was developed as a joint collaboration between WUR Livestock research, Wageningen University Business Economics group, Faculty of Veterinary Medicine of Utrecht University and DLV (Dienst Landbouw Voorlichting). The tool Jonkos is available (in Dutch) on the internet (http://www.verantwoordeveehouderij.nl/show/JONKOS-1.htm).

Jonkos consists of a main input–output worksheet, containing the most important input information grouped into eight topics (see Fig. 1). The eight topics are: general information and numbers of animals, ration, roughage, livestock, land and housing, manure, labour and installations, and water and energy. The main input–output worksheet also shows the output, including the cost of rearing young stock expressed per heifer and per herd (Fig. 2). Details of the different cost components are also presented. To calculate the net cost of rearing for a farm, the revenue foregone from not selling a two-week-old heifer calf is taken into account. Jonkos also accounts for the cost of purchasing heifers if insufficient heifers are available to replace culled dairy cows, as well as the revenue from the sale of excess heifers. In Fig. 1 the input part of the main worksheet is presented. The numbers presented in this Figure represent an average Dutch farm with 100 dairy cows, a replacement rate of 30 % and an average first calving age of 24 months. In Fig. 2 the output part of the main worksheet is presented. The numbers are the output for the farm presented in Fig. 1. The net costs of rearing for this farm are €61,347 per year.

An additional worksheet is available for each topic, where more detailed information on the topic can be entered. In the worksheet ‘general farm information and numbers’ the costs for carcass disposal, revenues foregone from not selling heifer calves and the revenues from selling excess heifers are calculated. These costs and revenues are calculated by taking into account first calving age, weaning age, mortality rate, and prices for new born calves and heifers. In the worksheet ‘ration’ the costs for milk replacer and concentrates are calculated. For the costs for milk replacer, the weaning age, the amount of milk replacer per day and the price are taken into account. Costs for concentrates were calculated by taking into account concentrates intake (included in the main input–output worksheet) and the costs for concentrates. In addition, in this worksheet the roughage requirements (maize silage, grass silage and fresh grass) are calculated (expressed in kg DM). These requirements are calculated by taking into account the intake DM per day for grass silage, maize silage and fresh grass, the percentage maize silage and grass silage in the ration (included in the main input–output worksheet) and the number of days grazing (included in the main input–output worksheet). In the worksheet ‘roughage’ the costs for crop costs, contract work, and purchase of roughage are calculated. The crop costs (separately calculated for grass and maize) are calculated by taking into the amount of land needed for young stock, and costs for seed, pesticides, fertilizer and fences. The amount of land needed is calculated by taking into account the roughage requirements and the yield per hectare. The costs for contract work (separately calculated for grass and maize) are calculated by taking into account the amount of land needed for young stock, and costs for ploughing, seeding, mowing, fertilizing, controlling weeds, and harvesting. If a farm is purchasing roughage, the roughage requirements and costs per kg DM are used to calculate the costs for roughage. In the worksheet ‘livestock’ the costs for health (included in the main input–output worksheet), insemination, shaving, bedding, interest and destruction of dead animals are calculated. In the worksheet ‘land and housing’ the costs for leasing land and housing are calculated. The costs for leasing land are calculated by taking into account the amount of land needed for young stock and the lease price of land (included in the main input–output worksheet). Housing costs includes interest, depreciation and maintenance, and were calculated by using the replacement value of the barn (included in the main input–output worksheet). The worksheet ‘manure’ includes the costs for manure removal, and were calculated by taken into account the manure production of young stock and the price for removal (included in the main input–output worksheet). Manure removal takes into account the Dutch manure policy. In the worksheet ‘labour and installations’ the costs for a milk feeding machine, an automatic concentrate feeding machine and a machine for manure removing are calculated. Interest, depreciation and maintenance costs are taken into account for these machines. The worksheet also includes the calculation of labour costs, which was calculated by taking into account the amount of hours needed for young stock and the price of labour (included in the main input–output worksheet). In the worksheet ‘water and energy’ the costs for water and energy are calculated. The costs for water was calculated by taking into account the water requirements (included drinking water and water for the milk replacer) and the price of water (included in the main input–output worksheet). Costs for energy are calculated by taking into account energy for heating milk replacer, machines and lighting, and the costs for energy.

In this way, all the costs that can be attributed to the rearing of young stock are taken into account in the Jonkos tool. All worksheets have additional columns, where Dutch averages are provided for each parameter, to assist farmers who do not know their individual farm-specific value. For instance, for the amount of DM intake for young stock older than 1 year, a value 8.8 kg DM per day [6] was suggested. The average Dutch values are based on literature [3,6] and the expertise of the developers. Economic parameters are based on Vermeij et al. [7].

Before Jonkos was used on farms, the tool was internally validated, and where necessary adapted. The effect of inputs on outputs was checked by judging whether the effect was plausible. In addition, the outcomes were also compared with literature, especially with Mohd Nor et al. [3] which was also based on Dutch circumstances.

Available data

Using the Jonkos economic tool, the data on the cost of rearing young stock were collected from two separate studies. The first study was conducted in September 2011. In this study, 432 herds associated with the Utrecht University Large Animal practice (ULP Harmelen) were approached by email. In addition, Veterinary Health Centre ‘De Peuvers Esch’ contacted 10 of their clients by telephone to ask them if they were willing to participate in this study. In total 43 herds agreed to participate (34 from the ULP Harmelen and 9 from the De Peuvers Esch). The second study was conducted in June 2013. In this study, 177 herds associated with the Veterinary Centre Zuid-Oost Drenthe were approached by email, of which 44 herds agreed to participate.

Each study was conducted by a student from the Faculty of Veterinary Medicine (Utrecht, the Netherlands). All herds in each study were visited by one student in the last phase of his or her study. The only information provided by the student prior to the interview was that the student would come to the farm to calculate, together with the farmer, the costs of young stock rearing of the farm. No further information was provided. In the first study, the farmers were first interviewed about the perceived total cost of rearing. The farmer was asked about an estimate for the costs of rearing a heifer, and it was not allowed to look this up in recording systems or to use other sources. Subsequently, it was asked whether the estimate of the farmer included labour and housing costs. In the second study, these questions were not asked. Then, together with the student, the farmers used Jonkos to obtain an estimation of the total cost of rearing. Most entries of the farmers were based on their own estimations, and rarely recording systems or other sources were used. It was compulsory to fill in the main worksheet (see Fig. 1), and only when the farmer thought that his farm deviated from Dutch average the other worksheets were filled in. For instance, when the farm had deviating costs for insemination, mortality rate, and revenues for selling calves and heifers. Filling in Jonkos took about 20 min for each farmer. For four herds in the second study, the data was not useable as the calculations failed to save properly, leaving a total of 83 dairy herds for both studies. Only Jonkos data and the perceived heifer rearing costs were available about the farms, and only that information was used for the analyses.

The data editing was performed using Statistical Analysis System (SAS) version 9.2 (SAS Institute Inc., Cary, NC). Of the 83 herds, seven herds were specialized heifer rearing farms and one herd sold all heifer calves at 2 weeks of age. Because these eight herds differed substantially from dairy farms they were excluded from the analysis, leaving 75 dairy herds. The descriptive results for inputs and outputs were averaged across these herds. In the first study, the farmers were asked whether their perceived total cost for rearing young stock included both labour and housing costs, included labour costs only, included housing costs only, or excluded both labour and housing costs. The difference between the perceived costs and the calculated costs was calculated as the perceived cost minus the calculated cost of rearing a heifer as calculated by Jonkos, where the calculated cost was adjusted for the appropriate inclusion of labour and housing costs.