An examination of the effects of labor efficiency on the profitability of grass-based, seasonal-calving dairy farms

Abstract

The seasonality of grass-based, seasonal-calving dairy systems results in disproportionately higher labor demands during the spring, when cows are calving, than in the remaining seasons. This study aimed to (1) examine the relationship between labor efficiency and profitability; (2) investigate strategies to reduce the hours worked per day by the farmer, family, and farm staff in the spring by having certain tasks outsourced; and (3) quantify the economic implications of those strategies. Data from an existing labor efficiency study on Irish dairy farms were used in conjunction with economic performance data from the farms. Tasks that required the highest level of farm labor per day in the spring were identified and hypothetical strategies to reduce the farm hours worked per day were examined. A stochastic budgetary simulation model was then used to examine the economic implications of employing these strategies and the effects of their use in conjunction with a proportionate increase in cow numbers that would leave the hours worked per day unchanged. The strategies were to use contractors to perform calf rearing, machinery work, or milking. Contracting out milking resulted in the greatest reduction in hours worked per day (5.6 h/d) followed by calf rearing (2.7 h/d) and machinery work (2 h/d). Reducing the hours worked per day by removing those tasks had slight (i.e., <5%) negative effects on profitability; however, maintaining the farm hours worked per day while utilizing the same strategies and increasing herd sizes resulted in profitable options. The most profitable scenario was for farms to increase herd size while contracting out milking.