Case Example 1: Profitability of using sexed semen: A s tatic and - PDF document

Case Example 1: Profitability of using sexed semen: A s tatic and deterministic simulation Different kinds of simulation Friday: Simherd: This morning: SimFlock This afternoon: ”Sexed semen model” 1

Sexed Semen Economics Budgetting: profitability of sexed semen use PhD-side-project: May 2006, Colorado State University Sexed Semen Small intro: -technique of sexing semen: X-Y -expensive -damaging -90% correct 2

Sexed Semen 90% heifer calves: -fewer dead born calves -fewer heavy calvings -replacement -expand herd -sell heifer calves -sell springing heifers -breed cows with beef semen Semen costs: -expensive semen -bad conception -extended age at first calving -extended calving interval -multiple use of semen Static-mechanistic approach: Spread-sheet model to ”simulate the herd” -39 biological input parameters: (re)production, culling, calving -24 output: calves born, semen used, calving interval, age at first calving -deterministic and static -quantified with whole-farm-budget 3

Partial budgetting: present only the parts of the model that change Gain: Increasing revenues + decreasing costs Loss: Decreasing revenues + increasing costs Difference: Gain-loss = Profit (if +) or Loss (if -) Whole-farm-budgetting: present all revenues and expenses (US-tool) Revenues: milk calves Expenses: feed labour housing Net Return to Assets Profit/loss Sexed Semen Economics 1 cow x 1000 = 1 herd Emperical: Disease and production ---x---> replacement Deterministic formulas: Conception chance normal semen: 0.6 1.7 ins/preg sexed semen: 80%*0.6=0.48 2.1 ins/preg Age at first calving normal semen: 14mo. + 0.7*21 + 9mo. = 23.1mo. sexed semen: 14mo. + 1.1*21 + 9mo. = 23.8mo. Static/Dynamic: Models year after year, doesn’t follow a cow 4

Sexed Semen Economics Step 1: parameter estimates Normal Semen Sexed semen Conception rate 60% 90% of normal CR Sex ratio ratio (% heifer calves) 49% 90% Twin births 1.85% Probability dystocia, bull calf 24% Probability stillbirth, bull calf 20% Mortalitity dams, around parturition 2% Lower Risk (RR) for heifer calf 0.6 Step 2: Estimates relevant prices Normal Semen €11 Sexed semen €31 HF bull calf €188 (1400 DKK ) Beef calf €255 (+500 DKK ) Heifer raising costs €981 (10 DKK /day) Springing heifer €1075 (Kælvekvie, DKK 8.000) Dystocia losses €82 5

Step 3: Design scenarios Default scenario -all nulliparous heifers and lactating cows are bred with normal, dairy semen -all bull calves are sold a.s.a.p. -surplus springing heifers (kælvekvier) are sold for market price Main scenario under study: -all nulliparous heifers with sexed semen - other lactating cows with unsexed, beef semen Results: Technical comparison Default Sexed Semen Difference Sold # week-old HF bull calves 503 123 -380 # beef calves (both bull and heifer) 0 495 495 # springing heifers 0 -100 100 # infertile and aborted heifers 14 11 -3 6

Results: Technical comparison Default Sexed Semen Difference Sold # week-old HF bull calves 503 123 -380 # beef calves (both bull and heifer) 0 495 495 # springing heifers 0 -100 100 # infertile and aborted heifers 14 11 -3 Bought Sexed semen # ins with sexed semen for heifers 0 673 +673 # ins with sexed semen for cows 0 0 0 Normal semen # ins with normal semen for cows 2165 573 -1591 # ins with normal semen for heifers 781 0 -781 Beef bull semen 0 1591 1591 Total doses of semen 2946 2838 -108 Results: Budget comparison: € per cow-year Default Sexed semen Difference Revenues Milk sales 2731 2731 0 Beef calves 0 126 126 Cull income 291 289 -3 Week-old bull calves 95 23 -71 Spring heifers 107 0 -107 Loss due to dystocia -9 -8 1 Gross revenue 3215 3161 -54 7

Results: Budget comparison: € per cow-year Default Sexed semen Difference Revenues Milk sales 2731 2731 0 Beef calves 0 126 126 Cull income 291 289 -3 Week-old bull calves 95 23 -71 Spring heifers 107 0 -107 Loss due to dystocia -9 -8 1 Gross revenue 3215 3161 -54 Expenses Semen costs 32 48 17 Replacement costs 463 373 -91 Total operating expenses 2037 1964 -73 +€ 20 Gross Margin 1178 1198 20 + DKK 146 Fixed ownership expenses 244 244 0 Total expenses 2281 2207 -73 Net Return to assets 934 954 20 Time Window: start sexed semen in year 1 Year 1: use of expensive semen, no income from beef-calves Year 2+3: income from beef-calves AND income from springing heifers Year >4: expensive semen, income from beef-calves, no income from heifers Default Sexed Semen 980 970 Net Return to Assets € +€33 +€35 960 950 +€24 +€20 940 930 920 -€15 910 0 1 2 3 4 5 6 Years 8

Results: Sensitivity analysis key-prices and figures € 1075 Results: Sensitivity analysis key-prices and figures Break Even Value €59 Break Even Value €215 9

Discussion: Profitability of sexed semen scenario: €20 per cow/year No uncertainty represented: ALL animals need 1.6 inseminations Of ALL calves born, 6% dies Milk price Livestock prices Not really in the scope of AHM... No uncertainty represented: €20 -(95% CI: -5, 45) -Probability of positive result: 75% Discussion: Disease complex: costs per case of dystocia: €82 Simherd: MAS DOWN KET MF MET DA RP DYS Not mechanistic: Replacement rate is set by user Simherd: replacement rate is a result of disease, reproduction, production, available heifers... 10

Simherd: Friday detailed, mechanistic, dynamic, Advantage: realistic, stochastic user-friendly-ness, interpretation of Disadvantage: results, over-parameterization Static/deterministic spread-sheet ↔ Simherd Static/deterministic spread-sheet ↔ other budget studies Calves per cow-year: -calving interval e.g. 405 days -365/405 = 0.90 -all cows that calf have 0.9 calves per year First-calf heifers -30% of animals in the herd is a primiparous cow -calving interval does not apply to them - higher replacement rate= more first-calf heifers Calves/cow-year is not only dependend on calving interval also on replacement rate 11

Static/deterministic spread-sheet ↔ other budget studies Relation between replacement rate (RR) and calves per cow (CPC)! SimHerd -run scenarios with different calving intervals (CINT) and replacement rates Regression analysis on the outcome: CPC = (365/CINT) + RR * 0,005 + ε Static/deterministic spread-sheet ↔ other budget studies CPC = (365/CINT) + RR * 0.005 + ε 365/405 + 30% * 0.005 = 0.90 + 0.15 = 1.05 Calves per cow = 365/CINT IF...replacement rate = 0%!! 1.2 1.15 calves per cow-year 1.1 1.05 1 Intercept: CINT 405 0.95 CINT 380 Crosses Y-axis 0.9 at (365/CINT) 0.85 0.8 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 replacement rate % 12

Let’s take a look at the spread-sheet -different strategies -introduce stochasticism 13