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Simulating Dairy Herd Structure and Cash Flow: Design and Application of a Web-Based Decision-Support Tool
1Department of Animal and Dairy Sciences, University of Wisconsin-Madison, Madison, WI 53706, USA.
Animals : an Open Access Journal From MDPI
|January 10, 2026
Summary
Dairy herd management requires dynamic planning. A new simulation tool models herd structure and cash flow, aiding decisions on replacement and growth strategies for improved farm profitability and risk management.
Area of Science:
- Agricultural Economics
- Animal Science
- Operations Research
Background:
- Dairy farm management decisions significantly impact herd structure and financial outcomes.
- Existing planning tools often lack dynamic simulation capabilities for herd evolution and cash flow.
Purpose of the Study:
- To introduce a web-based decision-support system for simulating dairy herd dynamics.
- To enable evaluation of alternative management strategies on herd composition and cash flow.
Main Methods:
- A Markov-chain framework models monthly transitions between animal states (calves, heifers, cows).
- User-defined parameters (culling, reproduction, heifer management) drive simulation dynamics.
- Economic components track income, costs, and loan amortization for cash flow projection.
Main Results:
- The tool projects monthly cash flow and income over variable cost per cow.
- Graphical summaries illustrate herd structure evolution under different scenarios.
- A comparative example demonstrates the impact of replacement strategies on herd composition and net cash flow.
Conclusions:
- The Dairy Herd Structure Simulation and Cash Flow tool supports informed dairy herd planning.
- Dynamic simulation enhances risk management by illustrating consequences of strategic decisions.
- Optimized replacement strategies can improve both herd composition and financial performance.
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