This shows that subtracting the rearing cost
of heifers from the profit per lactation results in
a negative profit margin (R/ℓ) at the end of
first lactation while showing only a small
profit even at the end of second lactation.
Increasing AFC from 24 to 30 months reduces
the profit margin per litre of milk by 13%.
While the profit margin is positive at the end
of the second lactation period at AFC of 24
months, it is still negative when AFC is 30
months of age, i.e. R0.21 vs. -R0.08 per litre
of milk.
Sensitivity analysis
A sensitivity analysis was also conducted to
As expected, milk yield per lactation, feed
cost as a percentage of all costs and concen-
trate cost (R/kg) had the largest effect on the
lifetime profit margins of cows. When feed
cost constitutes a large proportion of the to-
determine the effect of each factor on the
lifetime profit margin of cows. The value for
different factors was increased or decreased
by 5% and the lifetime profit margin per litre
of milk estimated. Each of these results was
subtracted from the lifetime profit margin of
the standard (or example) cow. In the following
figure the difference between the standard
and sensitivity analysis lifetime profit margin
of cows is shown. Increasing the average
production to 6300 kg resulted in a R0.20/kg
higher lifetime profit margin while reducing
the average milk yield by 5% resulted in a
R0.39/kg lower lifetime profit margin.
tal production cost, oth er costs actually de-
creases resulting in a better margin over
feed cost. An increase in concentrate cost
has a larger effect on profit margins than a
similar increase in forage cost, i.e. reducing