Stochastic economic evaluation of dairy farm reproductive performance

Kalantari, A. S. and Cabrera, V. E. 2015. Stochastic economic evaluation of dairy farm reproductive performance. Can. J. Anim. Sci. 95: 59–70. The objective of this study was to assess the economic value of reproductive performance in dairy farms under uncertain and variable conditions. Consequently, the study developed methods to introduce stochasticity into transition probabilities of a Markov chain model. A robust Markov chain model with 21-d stage length and three state variables, parity, days in milk, and days in pregnancy, was developed. Uncertainty was added to all transition probabilities, milk production level, and reproductive costs. The model was run for 10 000 replications after introducing each random variable. The expected net return (US$ cow⁻¹ yr⁻¹±standard deviation) was $3192±75.0 for the baseline scenario that had 15% 21-d pregnancy rate (21-d PR). After verifying the model's behavior, it was run for 2000 replications to study the effect of changing 21-d PR from 10 to 30% with one-unit-percentage interval. The economic gain of changing 21-d PR from 10 to 30% resulted in a US$75 cow⁻¹ yr⁻¹, and this overall increase in the net return was observed mainly due to the lower reproductive and culling cost and higher calf value. The gain was even greater when milk price and milk cut-off threshold decreased.