Dairy Farmers Turning To Genetics To Improve Profit Margins

Milk prices are down 40 percent from their highs in late 2014, and lower slaughter prices have also hurt the industry. As a result, many American dairy farms are currently operating at or below break-even margins.

Farmers have a number of genetic tools at their disposal, including sexed semen, genomic testing, in vitro fertilization, estrus synchronization techniques and management software technology. In addition, some dairy producers are crossbreeding dairy cows with proven beef sires to add value to the bull calf crop, enabling the capture of market premiums in the beef market.

“These strategies can provide much-needed advantages for dairies,” Amen said.

Amen notes that while genetic advancements and breeding programs can offer dairy producers distinct advantages, breeding programs should be customized for each farm, and may not work for all dairy producers.

“The objective should be to continue to improve production efficiencies and add value to both the dairy and beef cattle supply chains,” concludes Amen.

Until recently, the effects of falling milk prices were somewhat muted by record high cattle prices, Amen said. Record-high beef cattle prices boosted dairy producer’s margins by as much as one-third in mid-2015 through the sale of cull cows and bull calves. Now, calf and cull cow sales are responsible for less than 10 percent of margins.

SOURCE CoBank