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 an 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 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. |
Page 3 | 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 | The Profit Opportunity Analyzer'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 based on the analyzed herd's RHA to calculate production losses for late or no pregnancy. 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 12 illustrates the effect of how low pregnancy rates translate into high reproductive turnover in a herd. |
Page 5 | 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. |
Page 6 | Improving transition cow management can solve a good share of the Production profit opportunities on Page 8 and to a lesser extent the Turnover profit opportunities on Page 3. For more information on the Transition Cow Index®, click here. |
Page 7 | 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 on lifetime production very short and very long dry periods can have. The Profit Opportunity Analyzer utilizes Present Value formulas to convert these losses to annual ones.
The Transition Cow Index equals a cow's projected production based on her DIM and production level on her first test day at 5-40 DIM minus her expected production for the lactation. The expected production is calculated using the cow's last lactation production and then adjusted for a number of parameters including the length of the dry period. |
Page 8 | 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 30 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. |
Page 10 | 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. |
Page 11 | 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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Udder Health Management Profit Opportunities are based on lowering linear scores and getting increased production and lowering SCC and getting more quality premiums. |
Page 14 | Transition cow management opportunities are based on extra milk production and lower turnover that research associates with higher Transition Cow Indexes. |
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Research data behind the lifetime milk losses resulting from short and long dry periods are provided on this page. As with other parameters, average dry period length has no value. Each cow having a short or long dry period is counted individually in the calculation. |
Page 16 | Genetic and production information Profit Opportunities are detailed on this page. |
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