Keep Her & Or Cull & Replace

Keep her if the net present value of her remaining margin is higher than the net present value of replacing her — that is, if the retention payoff is positive. The keep NPV is the present value of her remaining lactations' margins plus her eventual cull value; the replace NPV is the cull cash you receive now minus the heifer's cost, plus the present value of the replacement's lifetime margin. The tool computes both and gives the verdict.

The retention payoff is NPV(keep) − NPV(replace): how much more (or less) keeping the cow is worth in today's money than culling and replacing her. A positive payoff means keep; a negative payoff means cull. It is the standard dairy-replacement metric because it nets the cow's remaining value against the full cost and benefit of a replacement, not just her current milk.

Margin = 305-day yield × milk price × (1 − SCC penalty) − feed and variable cost per lactation. Higher yield and a clean SCC raise the margin; a high somatic cell count cuts the effective milk price and so the margin. The tool discounts each lactation's margin back to today at your discount rate to build the keep and replace NPVs.

A high SCC lowers the price you are paid for milk and signals mastitis risk. The tool applies a price penalty by band: 0% below 200,000 cells/mL, about 3% from 200–400k, 8% from 400–750k and 15% above 750k. That penalty reduces the kept cow's margin and tilts the decision toward culling, especially for an older cow already past her yield peak.

It is the current cow's 305-day yield at which keeping and replacing are exactly equal in NPV. Above it, keep her; below it, cull. It turns the decision into a single number you can check against her milk records: if she is producing comfortably above the break-even yield she earns her keep, and if she has slipped below it a replacement pays.

A cow peaks in yield around her third or fourth lactation and declines after, as shown in the parity yield index. An older cow therefore produces less milk for the same feed, so her margin per lactation falls, while a fresh heifer is climbing toward her peak. Combined with rising health and reproduction risk, that is why later-parity cows more often fail the keep-or-cull NPV test.

Not always. A replacement heifer usually yields more, but you must pay her purchase or rearing cost now and wait for her margin to accrue, both of which the NPV discounts. If the current cow still has a strong, low-SCC lactation or two left and the heifer is expensive, keeping can win despite the lower yield. The tool weighs all of this, not just the yield gap.

Use your dairy's cost of capital — often 6–10%. The discount rate matters because the replace path is more front-loaded with cost (buying the heifer) and back-loaded with benefit (her future margins). A higher discount rate makes those future heifer margins worth less today, which favours keeping the cow you already have; a lower rate favours replacing.

Yes, on both sides. If you keep her, you still collect her cull value later (discounted), and if you replace her you collect it now. A high cull market raises the replace path's immediate cash and makes culling more attractive; a weak cull market favours keeping her milking. The tool includes the current cull value and the eventual cull value of both animals.

A herd replacement-rate tool works at the whole-herd level — what percentage of cows you replace each year. This tool makes the individual, per-animal decision for one specific cow using her own yield, parity, SCC and cull value. Use the herd tool to plan replacement budgets and this one to decide which particular cows to keep or cull.

It depends on her parity, SCC, milk price, feed cost and the cost and yield of the replacement. A 7,000-litre cow with a clean SCC and cheap feed can easily earn her keep, while the same yield with a high SCC and an inexpensive, high-yielding heifer available may not. Enter her figures and compare her keep NPV against the replace NPV and her break-even yield.

Yes — set the remaining lactations to one. That shortens her keep path so it must pay off in a single year against the replacement's longer stream. It is a common scenario for a borderline older cow you want to milk one more time before her cull value or condition declines; the NPV shows whether that single lactation still beats replacing her now.

The parity yield index (peaking around lactation three) and the SCC price-penalty bands are representative figures of the magnitude reported in extension dairy-economics and milk-quality guidance. They are sensible defaults for the model; your own herd's lactation curves and your processor's exact SCC schedule will refine the answer. Replace the yield, price and cost inputs with your records for a farm-specific result.