Random within-herd variation in financial performance and time to financial steady-state following management changes in dairy herd

Abstract

The manager of a dairy herd and the affiliated consultants constantly need to judge whether financial performance of the production system is satisfactory and whether financial performance relates to real (systematic) effects of changes in management. This is no easy task because the dairy herd is a very complex system. Thus, it is difficult to obtain empirical data that allows a valid estimation of the random (within-herd) variation in financial performance corrected for management changes. Thus, simulation seems to be the only option. This study suggests that much caution must be recommended when claming effect of changes in herd management because the link between management changes (cause) and effect (measured as improvement of gross margin per cow year) is extensively blurred by a large within-herd variation in available real life accounting data and differences between herds in time to steady state following management changes.