The Economic Value of Dairy Herd improvement Information in a Sample of Midwestern Dairy Farms

The objective of this study was to determine the implicit economic value of DI-ti information in a sample of dairy farms differing in production management. Although DHI information may contribute to differences in input productivity across farms, the extent of its contribution is influenced by the existing management strategy on the farm. To test the hypothesis, a Cobb-Douglas production function with variable returns to scaie was used. Data on management practices, obtained from a survey, were merged with production records from 1985 for 2370 herds on DHI testing. The marginal vaiue productivity per year of DIN per cow was calculated for different management strategies in the sample at a price of $.31/kg of milk. The marginal value productivities were evaiuated at the average herd size, average years on DHI, and average milk production for each management strategy. The highest marginal value product of DHI information was associated with a management strategy consisting of feeding buffer, using conventional silo for storage of silage, feeding aifalfa hay, milking in a stanchion barn, having heaith maintenance program, and using AI. The lowest marginal value product was associated with a management strategy consisting of the same variables but n buffer was fed.