Setting the boundaries-an approach to estimate the Loss Gap in dairy cattle

João Sucena Afonso ^1,2, William Gilbert ^1,2, Georgios Oikonomou ¹

⁰Department of Livestock and One Health, Institute of Infection, Veterinary & Ecological Sciences, University of Liverpool, Liverpool, United Kingdom.

Plos One +

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June 27, 2024

View abstract on PubMed

Summary

UK dairy farming faces significant financial losses due to inefficiencies. This study quantifies the annual "Loss Gap" in English and Welsh dairy sectors, identifying key cost drivers for improved farm management.

Area Of Science

Agricultural Economics
Animal Science
Veterinary Epidemiology

Background

UK dairy production has restructured, increasing herd size and impacting cow health and farm business performance.
Understanding inefficiencies is crucial for dairy farm decision-making, but previous yield gap analyses focused on specific causes, limiting understanding of relative contributions.
A comprehensive approach is needed to assess the total economic impact of various factors on dairy farm profitability.

Purpose Of The Study

To estimate the annual
Loss Gap
(yield losses and health expenditure) in the English and Welsh dairy sectors.
To develop a framework for understanding the relative contribution of specific causes to the total economic losses in dairy farming.
To provide data-driven insights for improving decision-making in dairy farm management and enhancing overall business performance.

Main Methods

A benchmarking approach and scenario analysis were employed using a deterministic model.
The model utilized an enterprise budget, treating milking herds and young stock separately, with the cow as the unit.
Scenarios involved varying assumptions on milk production, costs, market prices, mortality, and health expenditure to estimate the Loss Gap.

Main Results

An estimated annual Loss Gap of £148 to £227 million was identified for the entire English and Welsh dairy sector.
Reduced costs for veterinary services, medicines, and herd replacement were significant contributors to the estimated Loss Gap.
Milk price substantially influenced the estimate, with milk revenue accounting for over 30% of the Loss Gap when benchmarked against top-performing farms.

Conclusions

The developed framework effectively bounds the understanding of specific causes contributing to losses in dairy cattle, preventing overestimation.
The study highlights the significant economic impact of health expenditure and yield losses, emphasizing the need for targeted interventions.
Findings provide a basis for more accurate financial planning and strategic decision-making in the UK dairy industry to mitigate economic losses.