Economic effect of short (35-d) compared with conventional (60-d) dry period management in commercial Canadian Holstein herds

The Canadian dairy industry operates under a supply management system with production quotas (expressed in kilograms of butterfat per day) owned by dairy producers. Any management strategy influencing production responses must, therefore, be evaluated to estimate its effects on quota needed to sell the milk produced. In the present study, half of the cows from 13 commercial herds (850 cows, average of 70 cows per herd) were assigned to be managed for a short dry period (SDP; 35 d dry) and the other half was managed for a conventional dry period (CDP; 60 d dry) to evaluate the economic impact of a steady state involving either CDP or SDP. Economic variables included in the partial budget were: variations in revenues from milk and components as well as animals sold; costs related to feeding, reproduction, replacement, housing, and treatments. All variables were first estimated on a cow basis for each herd individually, and average results were used to calculate the partial budget for an average herd. Yearly milk and component yields per cow increased, which implies that fewer cows are required to produce the same amount of quota. Accordingly, 2 scenarios were investigated: in the first one, available quota was kept constant, and herd size was adjusted to avoid over-quota production. Consequently, the partial budget was calculated considering that 5 fewer cows were present in the herd. In this situation, switching to an SDP management increased net annual income for the farm by $2,677 (Can$), which represents $41.38 per cow. In the second scenario, the number of cows was kept constant, but additional quota (5.5 kg/d, $25,000/kg) was bought to allow selling all of the milk produced. In this case, net farm income was increased by $17,132 annually with SDP, which represents $245.18 per cow. This budget includes interest on the purchase of quota. A comparison of partial budgets for individual herds involved in the study revealed considerable variation among herds. Switching from a CDP to a SDP management would be beneficial for average dairy herds in eastern Canada.