Economics of heifer rearing on dairy farms

Heifer rearing is a fundamental part of the dairy industry. It represents a significant economic investment by the farmer into the future of the herd, with studies reporting that it contributes to approximately 20% of the overall expenditure of a dairy farm (Gabler et al, 2000). The target that has been quoted for this figure is 10% (Frazer LLP, 2018), with the herd replacement costs calculated as the annual expenses to obtain calving heifers minus the revenues from culled cows, divided by the amount of milk sold. The herd replacement cost is highly dependent upon the rearing costs of and culling rate within the herd (Frazer LLP, 2018). An example is shown in Figure 1.

Research from 101 farms across Great Britain reported that the cost of rearing a heifer from birth to first calving varied significantly between farms, from £505.10 to £2147.50 per heifer reared (Boulton et al, 2017). This variability indicates that there are significant system differences, as well as potential inefficiencies within those systems, which have potential welfare, health and economic impacts. It is worth noting that the impact of external factors, such as the rise of inflation, have had a significant impact on heifer rearing costs, resulting in the cost of rearing a heifer in 2023 being considerably higher than in 2015.