Setting the boundaries–an approach to estimate the Loss Gap in dairy cattle

Abstract

Dairy production in the UK has undergone substantial restructuring over the last few decades. Farming intensification has led to a reduction in the total numbers of farms and animals, while the average herd size per holding has increased. These ever-changing circumstances have important implications for the health and welfare of dairy cows, as well as the overall business performance of farms. For decision-making in dairy farming, it is essential to understand the underlying causes of the inefficiencies and their relative impact. The investigation of yield gaps regarding dairy cattle has been focused on specific causes. However, in addition to the risk of overestimating the impact of a specific ailment, this approach does not allow understanding of the relative contribution to the total, nor does it allow understanding of how well-described that gap is in terms of underlying causes. Using the English and Welsh dairy sectors as an example, this work estimates the Loss Gap–composed of yield losses and health expenditure ‐ using a benchmarking approach and scenario analysis. The Loss Gap was estimated by comparing the current performance of dairy herds as a baseline with that of scenarios where assumptions were made about the milk production of cows, production costs, market prices, mortality, and expenditure related to health events. A deterministic model was developed, consisting of an enterprise budget, in which the cow was the unit, with milking herd and young stock treated separately. When constraining milk production, the model estimated an annual Loss Gap of £148 to £227 million for the whole sector. The reduction in costs of veterinary services and medicines, alongside herd replacement costs, were important contributors to the estimate with some variation between the scenarios. Milk price had a substantial impact in the estimate, with revenue from milk yield representing more than 30% of the Loss Gap, when milk price was benchmarked against that of the top performing farms. This framework provides the boundaries for understanding the relative burden from specific causes in English and Welsh dairy cattle, ensuring that the sum of the estimated losses due to particular problem does not exceed the losses from all-causes, health or non-health related.