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Breeding: an investment or a cost?

Many farmers have a great interest in breeding, how the progeny perform and particularly how they look.

You only have to go to a Calf Club day and stand by those older farmers who will talk about breed, dairy type, and performance all day long. I know that when I ran my own dairy farm, it was great to talk to them about how they saw our younger stock particularly at Calf Club.

You have a number of sources of bull semen in New Zealand. The question always comes up: do you go for the bull of the day, or select one bull and get a "line" of heifers. My dad was a breeding man and for some 27 years, purchased lines of dairy calves, ran them for 18 months, then sold them as in-calf heifers. He would always look carefully at the breeding established pedigree background, but importantly the line. Successive sales showed purchasers would pay a premium for one line of heifers, which had proved themselves in the previous season.

You can look around the Waikato or New Zealand for that matter and there are a few purebred herds which look absolutely wonderful. A top producing Jersey herd has recently sold "as a line" for $1,400 plus GST.

Now looking at the investment or cost model of having top quality stock, the issues are as follows:
  • The costs are fully tax deductible.
  • Good breeding and animal health could be an excellent investment.
  • Its about improving the longevity of the animal.
  • It is preventative maintenance and wealth creation for the future.
We'll compare the animal investment to that of a car as follows:

If you spend $40,000 on a car and it lasts 8 years, then the capital has a cost to you of $5,000 per annum. If it only lasts 4 years, presuming it has no residual value like a cow and it has cost you $10,000 per annum.

Now looking at the cow, if you breed a top animal and look after it then a cow will be worth say $1,000, and in New Zealand and a cow's average lactations are 5 or 6, which means you need 20 replacements annually per 100 cows. If you got 8 lactations per cow then you only need 12½ replacements per 100 cows. Big difference isn't it?

Some farm herd wastage is so low that "culls" are actually sold as budget cows, which improves the bottom line. This bottom line is further improved if the stock are well bred.

If you can reduce replacements down to 13% per annum (i.e. 13 per 100 cows) then you may not need to graze replacements off. Again, this will improve your bottom line.

Feeding levels etc. and mating management are tied very closely to animal health costs. A healthy, well-bred cow is always going to produce better, but more importantly get in calf and reduce herd wastage.

Let's also look at the costly facial eczema. Early signs of eczema produce flu-like symptoms in the cow. Do you produce well with the flu? No, so why should the cow? The remedy: invest in animal health as prevention, keep the well-bred stock and reduce wastage.

Foot rot is another big one. The cost to fix and the loss of income is a huge cost to the industry and your pocket. Do some breeds have less foot rot than others.

Invest in prevention and quality by:
  • Selecting top quality semen.
  • Keeping your cows in good health.
  • Looking out for hardware in the race, ie. pick up all those staples, bits of wire, hard rock etc.
  • Forming up the races better.
  • Having lime-rock for the last 40 meters before the year, so the hard chip drops out of the cows' feet.
  • Keeping the bulls out of the herd in the yard.
  • Managing the cows carefully in the yard.
  • Keeping the copper, cobalt, selenium levels correct.
  • Having a long term breeding programme.
Other issues include:
  • Dirty water troughs – have you seen how much muck and rubbish gets into the bottom of a water trough over the year? Give your troughs a thorough clean out every year.
  • Bloat in the Spring. Do you like massive indigestion? Cows don't either.
  • Metabolic problems in the spring causes losses.
  • Skinny stock are more susceptible to disease. It should be called "diss-ease"!
You should treat your cows like you should treat your woman folk:
  • With kindness.
  • With care.
  • With support.
  • With realistic expectations.
If your mate is having a very stressful life at the time of having your baby, she will not be able to feed that child as there will not be enough Oxytoxin in the body to signal a milk let down. The same goes for cows.

I sold my own herd and got an absolute premium at our own milk herd sale in 1990: why? The cows were well recorded, well bred, in good order, but most importantly they were quiet. So quiet that we had to push them through the ring, and the farmers voted with their cheque books.

SUMMARY

So it is very clear that animal breeding and animal health is not capital expenditure and a luxury. It is an essential, a fully tax deductible expenditure for the health of the animal and the wealth of the farm and farmers. Good breeding and good animal health is an investment and good wealth creation.


 

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