A Computer-Based Tool for Evaluating Dairy Expansion & Production Victor E. Cabrera & Jay Janowski

“Everybody talks about the weather, but nobody does anything about it “Everybody talks about the weather, but nobody does anything about it.” ~ Mark Twain ~

Topics 1. Overview & Introduction to the Dairy Expansion Decision Support System Tool (DE-DSS) 2. “How Can I Use This Program on My Dairy Today?” (Case Study) 3. Results & Discussion

Topics Overview & Introduction to the Dairy Expansion Decision Support System Tool (DE-DSS) 2. “How Can I Use This Program on My Dairy Today?” (Case Study) 3. Results & Discussion

Overview Mission: Foster a proactive approach to forecast future cash flow Organize Information Simulate Changes in Herd Structure & Performance Effectively evaluate management changes & facility upgrades

Benefits Anticipate Potential Problems Plan Ahead Risk Management “See the future” Plan Ahead “Measure twice, cut once” Risk Management “Maximize your potential”

Program Operations Microsoft Excel User-friendly Avoid “paralysis of analysis” – browse the user manual Fully Customizable Format Over 250 input cells describe herd & farm conditions Does require thorough records and time commitment to complete Quality of information out depends on Quality of information in

“What IF…?” Real – Time Simulation Herd Structure Cattle Purchases/Sales Aggressive Herd Expansion Sensitivity Analysis – Quantify Changes in: Milk Price Milk Production Culling Rates General Dairy-Related Expenses Monitor individually or more than one at the same time!

Topics Overview & Introduction to the Dairy Expansion Decision Support System Tool (DE-DSS) 2. “How Can I Use This Program on My Dairy Today?” (Case Study) 3. Results & Discussion

Case Study – Identify the Issue Current freestall barn is limiting production & growth Stall size too small Cull Rates are too high Inefficient layout Overcrowded “I want to build a new freestall barn to accommodate future herd growth (from 200 to 300 total cows in 3 years). If I do this, I expect to see a production increase of 4 lb/cow/day and a decrease in my culling rates. How can the DE-DSS help me during the planning process?”

Case Study - Inputs 200 Dairy Cows Initial Herd Structure 81: 1st Lactation Cows @ 24,000 RHA 65: 2nd Lactation Cows @ 25,000 RHA 52: 3rd Lactation Cows @ 25,000 RHA Mailbox Milk Price: $15.25 Feed Cost: $0.09/lb DM General Labor Cost: $12/hr Other farm expenses: $175,000/yr

Inputs – Sensitivity Analysis These Inputs will be the same for lactations 2 & 3.

Topics Overview & Introduction to the Dairy Expansion Decision Support System Tool (DE-DSS) 2. “How Can I Use This Program on My Dairy Today?” (Case Study) 3. Results & Discussion

“Should we purchase bred heifers or grow from within?” Purchase 15 Bred Heifers each month in months 1-5 No Cattle Purchases

“How will my bottom line benefit from the new freestall barn?” Current vs. Improved Situation + 22.1% + 42.3 % + 56.0 % + 53.9 % Income Over Variable Cost ($/cow/month) Current Improved

“How will my bottom line benefit from the new freestall barn?” Current vs. Improved Situation + 23.8 % Net Present Value of Cash Flow ($/farm) Mean $1,879/month Current Mean $2,012/month Improved + 60.9 % + 49.8% + 66.3%

Current vs. Improved Situation “What IF…” Milk Price Increases to $16.00/cwt One Year From Now Current vs. Improved Situation + 42.3 % + 49.8 % + 56.0 % + 66.3 % + 22.1 % + 23.8 % + 53.9 % + 60.9 % Original Increase New Increase Current Income Over Variable Cost ($/cow) Improved

Current vs. Improved Situation “What IF…” Milk Price Increases to $16.00/cwt One Year From Now Current vs. Improved Situation + 22.1 % + 23.8 % Original Increase New Increase Current Mean $2,283/month Net Present Value of Cash Flow ($/farm) Improved + 102.9 % + 112.2 % Mean $2,536/month + 78.1 % + 87.5 % + 94.5 % +107.4 %

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