UC Davis

The Netherlands is one of the world’s leaders in commercial dairy production. Dutch dairy farmers are increasingly challenged by evolving agri-environmental legislations to adapt their farming strategies and become more sustainable. Policy changes, like the abolition of milk quotas and the introduction of the phosphate rights system have had a major impact on the structure and operations of Dutch dairy farms. One of the management measures farmers use to adjust their farming strategies and farm structure within the legally established production framework is culling and replacing dairy cows. Replacement of dairy cows can be defined as the removal of producing dairy cow (culling) and replacing it by a suitable heifer that is expected to perform better than the culled cow. Most dairy farmers in the Netherlands have a closed system wherein, they breed and rear their own replacement stock. Therefore, heifer rearing, and dairy cow replacement strategies are strongly interlinked. In the past, complex models have been developed to study and support not only replacement decisions but also heifer rearing strategies. However, given the considerable time lag between the decision to keep and rear a female calf to replacement heifer and the decision to replace a dairy cow by this reared heifer, it has been difficult to define optimal strategies at herd level for the replacement problem. Moreover, regardless of the models developed, dairy farmers tend to make replacement decisions based on their intuition while relying on rules of thumb. Given that future farm goals must include further reductions in environmental burden while maintaining economic viability, a revisit of optimal dairy cow replacement strategies by owned reared heifers is sorely needed. Hence, the aim of this thesis was to (1) gain insights in the factors and reasons for culling and replacement of Dutch dairy cows under changing agri-environmental policies and, (2) to use these insights to explore the consequences of policy constraints on replacement strategies. To achieve these aims, five sub-objectives were formulated as follows:

1. To analyze the relevancy of cow-level risk factors for lifetime survival of Dutch dairy cows representing production, reproduction, and health performances under perturbations due to national policy changes related to the milk quota abolishment of 2015 and the phosphate regulations since 2017. 2. To gain insights into the cross-sectional associations between annual performance indicators of Dutch dairy farms and their corresponding magnitudes of (i) overall culling and (ii) primiparous cow culling after the introduction of the herd size restricting phosphate regulation in the Netherlands.

3. To (i) determine the reasons behind the culling of cattle on Dutch dairy farms, (ii) to determine whether Dutch dairy farmers follow specific culling strategies (plan) and (iii) if so, to evaluate whether they intend to change their strategies in the near future.

4. To study on herd level the economic impact of suboptimal replacement decisions due to a constrained replacement heifer supply while accounting for the interdependency among dairy cows within the herd.

5. To gain insights in the economic consequences of different heifer rearing strategies under the current Dutch phosphate rights policy.

In Chapter 2, a survival analysis of Dutch dairy cows was conducted on national level using longitudinal data to analyze cow-level risk factors under perturbations due to national policy changes. The associated cow-level risk factors for culling such as lactation value (relative production level), parity number, rolling average of inseminations over all parities, very high fat-protein ratio (highFPR) and very low fat-protein ratio (lowFPR) in early lactation, test-day somatic cell count, were fitted in the model. Along with these, a factor representing three target policy periods, namely Milk Quota period (MQ), Post-Milk Quota period (PMQ) and Phosphate regulation period (PH) were fitted. The mean survival age for all producing cows was 441 weeks overall. The predicted median survival time for the policy periods MQ, PMQ and PH were 273 weeks, 271 weeks, and 256 weeks, respectively. Risk factors such as lactation value, parity and highFPR, rolling average of inseminations over all parities were positively associated with survival time in all three policy periods. Risk factors such as test-day somatic cell count and lowFPR were negatively associated with survival time in all three policy periods.

In Chapter 3, associations between the performance of dairy farms and their corresponding culling rates under the herd size constraint as imposed in 2018 by the new phosphate regulation in the Netherlands were investigated. Using rank correlation and logistic regression, associations between 10 farm performance indicators (from 4 areas of longevity, production, reproduction, and udder health) and 4 culling proportions (for overall and primiparous cow culling). Results showed very low-rank conformity (<12%) between the areas of production, reproduction, and udder health to the culling proportions. Logistic regression model showed that higher farm levels of production and higher percentages of cows with poor udder health were associated with more overall culling but with less primiparous culling. For reproduction indicators, the associations were similar for overall and primiparous culling. However, the odds ratios for indicators were close to 1 indicating only weak associations to culling proportions.

In Chapter 4, a national level survey of Dutch dairy farmers was undertaken to determine the culling reasons for dairy cattle and to identify farmers’ culling strategies and their intentions regarding the alteration of indicated culling strategies. Results showed that the most frequent culling reasons were related to problems with reproduction, udder, and hoof health. Culling reasons for primiparous and multiparous cows were different. Most respondents indicated that they consider formulating a culling strategy, based on certain rules of thumb regarding the most common reasons for culling. Most farmers also reported that culling decisions on their farms were perceived to be unavoidable, though reproductive culling decisions are primarily voluntary. Most respondents stated that they intended to reduce the culling rate for better economic gain did not intend to alter the amount of replacement stock reared. The applied rules of thumb regarding culling strategies did not seem to have changed since the policy changes in dairy farming.

In Chapter 5, a scenario study on economic impact of suboptimal replacement decisions due to a constrained heifer supply was performed. In this study, a single-cow optimization model was combined with dairy herd dynamics simulation. Besides the base scenario of following optimal replacement policy, we simulated three input scenarios of constrained, excess, and variable replacement heifer supply. In the base scenario, optimal replacement policy resulted in an average herd gross margin of €260,000, 17% voluntary replacement rate, and a 14% involuntary disposal rate annually for a herd of 100 cows. Constrained as well as excess heifer supply resulted in lower gross margins of €164,000 and €245,000, respectively. Compared to the base scenario, the constrained heifer supply scenario also resulted in 36% reduction of herd size, an increase in involuntary disposal (17%) and no replacements (0.2%) per year. The variable heifer supply scenario resulted in slightly lower gross margins (€250,000), lower voluntary replacement rate (12%), higher involuntary disposal rate (17%) but did not result in reduction of herd size

 In Chapter 6, using the model framework of Chapter 5, the economic consequences of environmentally driven agricultural policy such as the Phosphate rights system on replacement heifer rearing strategies were investigated. 12 scenarios signifying variation in (1) availability of replacement heifers and, (2) age at first calving for heifers were designed. Results showed that by reducing the replacement heifer supply or the age at first calving of heifers, the phosphate production on farm can be reduced without having a huge decrease in gross margin. By taking phosphate rights system as an example, we demonstrated that policies pertaining to other environmental emissions can also be studied in a similar way.

Based on all the findings, the main conclusions were:

1. Farmers make culling and replacement decisions of individual dairy cows based on heuristics and rules of thumb with respect to health, reproduction and production performance measures that are conserved across time, irrespective of farm performance goals or national policy changes (Chapters 2, 3 and 4).

2. There is potential to change current replacement and heifer rearing strategies within the constraints of the agri-environmental policies without hampering the economic gains from milk production (Chapters 5 and 6). More specifically, each study of the thesis had the following conclusions:

1. Survival of Dutch dairy cows was perturbed by changing agricultural policy such as abolishment of milk quota and introduction of phosphate rights system (Chapter 2).

2. The association of cow-level risk factors for culling was consistent across the national policy changes from 2009 to 2019 (Chapter 2).

3. The introduction of phosphate regulation resulted in an increased outflow of cattle, corresponding culling proportions of primiparous or multiparous cows were not associated with the level of farm performance measured in terms of production, reproduction, or udder health (Chapter 3).

4. From farmers’ perspective, their culling strategies align with the most frequent culling reasons such as reproduction, lameness, and udder health of the cows. The perceptions of farmers regarding the main culling reasons and strategies have not changed since the implemented policy changes that have imposed additional production restrictions (Chapter 4).

5. Farmers have intentions to reduce culling rate of dairy cows on their farms to improve economic gains and longevity of dairy cows (Chapter 4).

6. Severe constraints on heifer supply for replacement resulted in reduced gross margin as well as a reduced herd size due to an increase in involuntary disposal without replacement (Chapter 5).

7. Excess and variable heifer supply for replacement resulted in slightly reduced gross margin due to sale of excess heifers at a loss (Chapter 5).

8. There is room to improve the gross margin of dairy herds within the policy-based constraints by reconsidering heifer rearing strategies for replacement supply (Chapter 6).