According to the U.S. Department of Agriculture, the average cost to raise a child from birth until age 18 is $241,080. So, how much does it cost to raise a calf from birth until she “leaves the nest” for group housing?
A group of UW-Extension agents recently compiled the data from 36 Wisconsin operations and determined this average cost to be $363.69, up more than $37 from just five years earlier, and well over twice the cost from 1999 when it only took $160.26 to get a calf started.
These figures looked at a cross-section of dairying styles, including 12 tie-stall operations, 13 free-stall operations and five custom calf growers. Information was collected in the areas of feeding, management, housing and labor. Other variable costs calculated included bedding, veterinary, death loss and interest.
According to Eau Claire County UW-Extension Agriculture Agent Mark Hagedorn, there is high demand for this valuable data set. He collaborated with a dozen colleagues to pull together an intuitive cost of production analysis (ICPA) that calculates and evaluates producer-specific costs and labor efficiencies.
He says, “Producers in the upper Midwest are literally starving to see this information. It’s not the ‘gilded gospel,’ but gives a benchmark of where things are at, and helps producers look at their operation more closely.”
The study broke down the average cost per day per calf among the three types of operations. On the tie-stall dairies, that cost was $5.48 per day, slightly less than the free-stall dairies’ cost of $5.59. A closer look at those figures shows that though the feed costs and variable costs on the free-stall dairies was less, tie-stall dairies showed savings in labor and management, as well as lower fixed costs.
The custom growers, however, were best able to take advantage of economies of scale. Their average cost was $3.81 per calf per day – a result of lower feed costs, along with variable and fixed costs.
So, when it comes to raising calves, what has changed since the previous studies in 2007 and 1999, and how do these changes affect rearing costs?
Hagedorn notes two major changes: feed cost and replacement heifer value. Between 1999 and 2007, feed costs nearly doubled; they jumped again during the past six years by more than $50 per calf to $165. According to Hagedorn’s observations, the price of calf starter has tripled, and as milk replacer costs rose too, more producers are feeding pasteurized waste milk.
On the other hand, the value assigned to the calves is merely one-third of what it was just a few years ago. In 2007, heifer calves were valued at $500 each; now, in 2013, they average $150 each.
Meanwhile, variable costs and expenses related to labor and management saw an overall decline.
“That means that people are getting a little more efficient in how they handle and feed calves,” Hagedorn points out.
Tasks such as mixing and delivering milk to calves have become more mechanized, thus, reducing some of the labor involved.
While fixed costs were stagnant between 1999 and 2007, they almost doubled by 2013, contributing an average of $23 to the total cost to raise a calf. This cost difference may be due in part to the construction and renovation of facilities. Hagedorn goes on to note that during the last five years he has seen an increase in building projects on dairies. Further, research coming out of UW on improving calf conditions and ventilation is being widely adopted.
Hagedorn also speculates that this data is a reflection of other industry trends regarding calf care. The average time spent on milk is more than a full week longer than it was just six years ago. The weaning age also has been extended by about 3.5 days, which means that producers are putting an additional $15 to $16 into raising wet calves compared with years past. These calves also are spending more time socializing in weaned groups before being shuttled off into their next phase of life as heifers.
“As you look through the industry and visit with producers, this reinforces the concept that replacement stock and young calves are valuable parts of the production cycle for herds, and they see value in spending a little bit extra to make sure they are healthy and well-adjusted,” Hagedorn says.
Ultimately, Hagedorn hopes that other dairy producers will find this information helpful in comparing their own cost of production (COP).
“What it boils down to is that in order for us to market milk, corn, soybeans or any agriculture commodity, it is essential that we know the COP,” he explains. “In essence, that is we are doing with this project.”
Hagedorn encourages dairy producers to contact their UW-Extension agent to perform their own COP analysis using this study as a benchmarking tool.