Use of Profit Equations to Determine Relative Economic Value of Dairy Cattle Herd Life and Production from Field Data

Profit equations or functions that reflect the realized profitability of cows have been used in the literature to determine the relative importance of different variables such as milk yield and herd life. In all profit equations, the opportunity cost of postponed replacement, which reflects the profit sacrificed on an average replacement cow by keeping the cow, has been omitted. In this study, three profit equations were compared: total lifetime profit; total lifetime profit accounting for opportunity costs, and profit per day of herd life. Linear regression was used to determine the relative value of first lactation production and herd life on profitability in simulated data.