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Why Dairy Cows are Leaving Herds in Minnesota and Economic Drivers

Amber Roberts

Summary

Culling decisions have a substantial effect on farm finances. The cost of maintaining a herd is one of the largest variable expenses. Farmers who are able to make effective culling decisions boost their farms financial health. However, farmers face a mixture of constraints including animal health, reproductive status, and prices in their decision to cull. DHIA records were used to analyze the culling decisions of 90 Minnesota herds from 2012-2018 to understand how farmers choose cows to culls and the economic drivers impacting their decisions.
Our research indicates that a decline in the price of milk was a significant factor in increasing voluntarily culled cows. There was a spike in the number of cows sold in their first and second lactation to other farms when milk prices declined. Milk prices were an influential financial driver as farmers were more likely to cull cows in their first and second lactation, even though cows had not reached their break-even point. A potential explanation would be that farmers are not making efficient culling decisions, but are motivated by the instability of milk prices and their preferences for cows who have been in the herd longer. Further research will examine the possibility of a lemons market for culled cows sold as dairy.
Additional research reflects that the breed of the dairy cow was a significant factor in the farmer’s decision to cull. Farmers were 5% more likely to cull Holsteins compare to other breeds. Surprisingly, farmers preferred to treat and keep diseased Holstein.

Details

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