Impact of Prices on Profit Functions in Dairy Cattle

Abstract

Eleven different combinations of income and expense factors were used to estimate relative net profit on a lifetime and per day of productive life basis for 176,902 Holstein cows with opportunity for production through 72 mo of age. Price changes affected mean and standard deviation of profit estimates for both lifetime and per day of productive life. Deviating profit estimates from contemporaries stabilized means across prices, but standard deviations were little affected. Correlations between lifetime profit function exceeded .90 for all combinations except those with the relative net profit estimate using high feed and low product price where five correlations were from .72 to .79. Another profit estimate using medium feed and product prices and high fixed and operating expense produced four correlations from .87 to .89. When profit was expressed per day of productive life, correlations exceeded .99 in all cases except one (.97). Relationships between profit functions and other lifetime performance variables are presented.