AgSource's Profit Opportunity Analyzer® Perhaps the most important DHI report you will ever use... AgSource's Profit Opportunity Analyzer® is many things to different people. The report was developed to provide AgSource members and their consultants an easy to understand yet sophisticated tool for identifying where they should focus their time and capital for the biggest return. For other producers, it is a way to focus their management team at meetings. Other AgSource members used the Profit Opportunity Analyzer as the centerpiece of their successful loan proposals for large capital investments such as new transition cow facilities.Using individualized AgSource data and coldly analytical and unbiased formulas, the Profit Opportunity Analyzer steers members away from concentrating on an area that has perhaps $10,000 of profit opportunity when there is another management area with $100,000 available. The Profit Opportunity Analyzer combines AgSource's data base with producers' own records, compares their dairy's performance in seven key areas to 80th percentile herds in their size range and converts the difference to dollars. Members input their own prices to create a truly individualized report. Included at no charge, a trained AgSource employee will deliver and explain the Profit Opportunity Analyzer either to the member individually or at a team meeting. AgSource also provides free training to nutritionists, veterinarians and other consultants enabling them to deliver the reports and develop closer business relationships with their clients. For more information on receiving Profit Opportunity Analyzer training, contact your DHI Field Technician or AgSource Representative or call (800) 236-0097. For a page by page tour of this groundbreaking DHI report, scroll down. For printable pages click here. |
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Less than 100 cows 100-250 cows 251 - 500 cows 501-1,000 cows More than 1,000 cows Jersey herds can also be analyzed. However, because of their limited data base size, they are analyzed without the herd size breakdowns. |
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At this time, no dairy has exceeded 80th percentile performance in all categories. Finding unexpected opportunities is not a negative. These are positive ways to increase income. Each of the individual management pages has the overall dollar opportunity in teal at the top; benchmarks based on the herd's size are next followed by the analyzed herd's numbers. The overall dollar opportunity is calculated using annual averages. The risk from using annual values is that due to the "lag" in these numbers is that a problem the Profit Opportunity Analyzer identifies may be actually fixed by now. Conversely, what was a management strongpoint could now be slipping. To remedy this problem, trend graphs are used throughout the report. In this case, turnover in the first 60 days in milk is considered a predictor of future annual turnover rates. Many dairy operators who have not purchased a replacement in decades question how they can have a significant profit opportunity in this section. The reason for this is that by lowering their turnover, they would have more animals to sell for dairy at the replacement price they provided instead of the cull cow price. |
 | Many programs that attempt to quantify financial gains from improving age at first calving use average ages. Unfortunately, averages can mask problems if a dairy has a number of very young and very old heifers freshening. Research indicates losses with heifers freshening under 23 months and over 25 months. The Profit Opportunity Analyzer measures those two specific groups to provide a more accurate value. In addition, this and many other management pages have an "Estimated RHA milk increase if attain 80th percentile... performance". The extra production attained by heifers improving their freshening age performance to the 80th percentile is spread out over the entire herd to calculate the increase on the herd's RHA. Each of the individual management pages has the overall dollar opportunity in teal at the top; benchmarks based on the herd's size are next followed by the analyzed herd's numbers. The overall dollar opportunity is calculated using annual averages. The risk from using annual values is that due to the "lag" in these numbers is that a problem the Profit Opportunity Analyzer identifies may be actually fixed by now. Conversely, what was a management strongpoint could now be slipping. To remedy this problem, trend graphs are used throughout the report. In this case, turnover in the first 60 days in milk is considered a predictor of future annual turnover rates. Many dairy operators who have not purchased a replacement in decades question how they can have a significant profit opportunity in this section. The reason for this is that by lowering their turnover, they would have more animals to sell for dairy at the replacement price they provided instead of the cull cow price. |
Page 4 | Reproductive Management of the Milking Herd is a management strongpoint for this herd's operators. Because this operation's Pregnancy Rate matches the 80th percentile performance level, the illustrated profit opportunity is $0. The herd's owners can certainly make more money by increasing their herd's Pregnancy Rate, however due to the Law of Diminishing Returns; the costs of getting to the next level would also be higher. The goal of the Profit Opportunity Analyzer is to point out the areas where time and labor yields the highest returns. If accurate Pregnancy Rate information is not available, profit opportunities are calculated from Average Days In Milk data. |
Page 5 | Many programs that attempt to quantify financial gains from improving age at first calving use average ages. Unfortunately, averages can mask problems if a dairy has a number of very young and very old heifers freshening. Research indicates losses with heifers freshening under 23 months and over 25 months. The Profit Opportunity Analyzer measures those two specific groups to provide a more accurate value. In addition, this and many other management pages have an "Estimated RHA milk increase if attain 80th percentile... performance". The extra production attained by heifers improving their freshening age performance to the 80th percentile is spread out over the entire herd to calculate the increase on the herd's RHA. |
 | Improving udder health management offers two profit opportunities. 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. |
 | Improving transition cow management can solve a good share of the Production profit opportunities on Page 9 and to a lesser extent the Turnover profit opportunities on Page 3. Besides measuring the improvements from increasing the Transition Cow Index, a section is included on managing dry period lengths.
Improving udder health management offers two profit opportunities. 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. |
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The profit opportunity is based on the entire milking herds' average sire Net Merit$. The graph shows the trend of the 1st lactation cows, 2nd and greater lactation cows and the service sires. |
Page 9 | The Production Management calculation for income per cow is based on pounds of fat and protein multiplied by the Federal Milk Market Order 32 average price for these two components. Also note from the graph that 1st lactation heifer ME305s should be 5-600 pounds higher than older cows. Dig deeper for answers if this is not the case. |
 | The pie chart is a compilation of estimated per cow production increases expected if 80th percentile performance can be reached in the listed management areas. This chart illustrates many of the interrelationships throughout the Profit Opportunity Analyzer. |
 | The last six pages of the report list the formulas used in the calculations and below them are the analyzed dairy's own numbers. Published papers used in developing assumptions in the Profit Opportunity Analyzer are also listed.Top |
page 12 | This table illustrates the interrelationship between herd turnover rate and milking herd reproductive performance. The following assumptions are made:
With a 20% pregnancy rate, at the end of 318 days, there are 6.9 or 6.9% reproductive failures that are shipped. With a 10% pregnancy rate, 28.2% of the herd is culled for breeding problems. With this high level of turnover, it is impossible for a producer to keep their replacement rate below the 80th percentile. (Page 3) |
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