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AgSource's Profit Opportunity Analyzer®

AgSource's Profit Opportunity Analyzer® (POA) provides AgSource members and dairy consultants with an easy to understand yet in-depth tool for identifying where time and capital should be focused on the dairy for the greatest return potential. Eleven management areas are evaluated and compared against the 80th percentile range of performance for AgSource herds of similar size. The 16-page POA report not only concentrates attention on areas that show room for improvement, but also calculates how much income could be realized by making improvement in each of those areas.

Backhaus-2-web-2012.jpgAs a result, the Profit Opportunity Analyzer is often the centerpiece for successful capital investment loan proposals and helps prioritize expenditures of time and money. Many dairy herd management teams utilize an annual POA to measure the previous year's success and set goals for the coming year. 

AgSource fully supports every Profit Opportunity Analyzer. If ordered on the website or through a Field Technician, a trained AgSource representative will set up an appointment to deliver and explain the report. This can be done one-on-one, but it is often most effective at a meeting when all members of the dairy's management team are present. Free training is also available to veterinarians, consultants and nutritionists interested in providing Profit Opportunity Analyzers to their clients.

To order a Profit Opportunity Analyzer or learn more about training, contact your DHI Field Technician or AgSource Representative or call (800) 236-4995. Click on the following links for more information:

Profit Opportunity Analyzer Online Order
Profit Opportunity User's Guide

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Following is a page-by-page tour of the Profit Opportunity Analyzer. Scroll through the 15-page report, or click on one of the eight management areas below to jump to that page.


Summary Page

Reproductive Management Milking

Udder Health Management

Production Management/Peak Milk

Milk Persistency

Transition Cow Management

Ketosis Management

Dry Period Length Management

Turnover Management

Genetics Management

Heifer Reproductive Management

Data Inputs

Page one is a summary of the eleven management areas evaluated.  The first graph shows the profit opportunity for each management area while the second graph shows how the eleven areas compare to one another.  

The following pages provide a more detailed analysis of each of the management areas.
Depending on the benchmark level chosen, herd group size: < or = to 100, 101-250, 251-500, 501-1000, >1000 there is room for every herd to improve in one or more areas of herd management. Each of the individual management pages displays the overall dollar opportunity in teal at the top; benchmarks based on the herd's size or production level values are next followed by the analyzed herd's numbers.



The overall dollar opportunity is calculated using annual averages compared to the 80th percentile values of the benchmark herds. The risk associated with annual values is that, due to the "lag" in these numbers, a problem the Profit Opportunity Analyzer identifies may actually be fixed in the meantime. Conversely, what was a management strongpoint could now be slipping. To remedy this problem, trend graphs are used throughout the report.


Page 2

The POA's pregnancy rate reproductive opportunity calculator uses AgSource production data to determine the value of pregnancies at each 21 day increment during a cow's lactation.  Different data sets are used to calculate production losses for late or no pregnancy. based on the analyzed herd's RHA The calculation uses the member's own provided price for milk, replacements, cull cows, calves and interest rates. Present value calculations are used extensively to quantify the difference in value of milk produced from a delayed pregnancy compared to those in herds with high pregnancy rates. The chart on Page 16 illustrates how low pregnancy rates translate into high reproductive turnover in a herd.



Page 3

Improving Udder Health Management offers two profit opportunities: improving linear scores and decreasing SCC. Improving a herd's linear score (overall subclinical infection level) increases a herd's production level. Lowering a herd's Somatic Cell Count (SCC) will either increase premiums or, in some cases, lower the amount deducted for high SCC milk. The supporting graph allows producers to track changes in linear scores and bulk tank SCC over an 18-month period. 



Page 4

In addition to the graph shown on Page 3, an 18-month history of Fresh Cow % New Infections and Dry Cow Cure Rates compared to the 80th percentile benchmark allows producers to review if improvements in fresh cow management are being made. Additional information can be found on the AgSource Fresh Cow Summary and Udder Health Management reports.



Page 5

The Production Management calculation for income per cow is based on pounds of fat and protein multiplied by the Federal Milk Market Order 30 average price for these two components. For a more in- depth analysis on what stage of lactation these opportunities exist, use the Peak Milk and Persistency Analysis summaries found on Page 6, 7, 8 and 9. Using the 18-month ME milk graph allows the producer to review if production trends are improving and assess how different lactation groups compare to each other.



Page 6

The Peak Milk Summary analyzes the height of the lactation curve. For each pound of peak milk increase, additional production gains are made throughout the lactation. Comparing peak milk ratios between lactation groups allows a producer to determine if some lactation groups are doing better than others. An 18-month trend allows producers to review how peak milk yields have changed over time. height of the lactation curve. For each pound of peak milk increase, additional production gains are made throughout the lactation. Comparing peak milk ratios between lactation groups allows a producer to determine if some lactation groups are doing better than others. An 18-month trend allows producers to review how peak milk yields have changed over time.



Page 7


An 18-month summary of peak milk ratios compared against the 80th percentile herds provides a closer look at which lactation groups are improving.



Page 8

The Milk Persistency Summary evaluates the shape of the lactation curve. This is achieved by comparing the shape of the herd lactation curves against lactation curves for the 80th percentile herds. Opportunity is calculated using the difference between the actual lactation curve and superimposed curve based on highest expressed milk production level and the persistency values of the benchmark herds.



Page 9 

Similar to Page 8, but graphs performance and opportunity for 2nd lactation and 3rd and greater lactation cows.  



Page 10

Improving Transition Cow Management can address a good share of the production profit opportunities on Pages 5 thru 9 and to a lesser extent the turnover profit opportunities on Page 13. The 18-month graph showing the TCI breakout by 2nd lactation versus 3rd and greater lactations provides additional detail on where transition cow problems occur. Because the Transition Cow Management profit opportunity, found on the previous page, does not reflect losses due to long or short dry periods, they are evaluated and quantified separately here.  

For more information on the Transition Cow Index® click here.


                                                                   Page 11

Research shows that ketosis affects 40-60% of dairy cows and causes major losses in the areas of milk production, reproduction and culling. The ketosis management page calculates your opportunity based on lowering the prevalence of ketosis in your herd to recommended levels. Fewer first-calf heifers are expected to experience ketosis, giving us a goal of less than 5% prevalence level in the first lactation animals with the profit loss per animal at $256. Cows that have calved multiple times are recommended to have a prevalence level at or below 15%, with the average loss per affected animal at $375, due to the greater production capacity of older animals. This page is developed from KetoMonitor data derived from samples taken from fresh cows 5-20 DIM on test day.

For more information on KetoMonitor click here.



Page 12

Dry period length management is under the radar of many producers. Research using DHI records published by USDA's Animal Improvement Programs Laboratory illustrates the dramatic effects very short and very long dry periods can have on lifetime production. The Profit Opportunity Analyzer utilizes present value formulas to convert these losses to annual ones.



Page 13

Before evaluating turnover management numbers, it is important to understand how culling reasons were coded relative to the actual removal event that took place. Differentiating between voluntary and involuntary culling is critical It is assumed that numbers presented for the herd are involuntary culls.  Higher involuntary cull and/or death losses, especially in early lactation, result in higher production losses.



Page 14

The profit opportunity is based on the entire milking herd's average sire and service sire Net Merit$. The 18-month graph shows the trend of milking cows and the service sires used.



Page 15

The Heifer Reproductive Management Summary takes a close-up look at the actual distribution of cows at first calving versus the expected distribution based on the producer's goal for age at first calving. Profit opportunity is expressed as the difference in number of cows, between actual and expected distribution, (only if there are more actual cows then expected) multiplied by the potential production losses. 



Page 16

The last page of the report provides the data inputs used in the calculations of the Profit Opportunity Analyzer.