Framework concerning monetary factors

The two model farms for which we calculated enterprise budgets were assumed to produce organically. Although not restricted to organic farms, from an economic perspective the change from a calf rearing system without cow contact to one with cow contact is easier on organic farms, not least because the EU regulation of organic farming (EU, 2008a) requires one to feed calves at least 3 months of natural milk, preferably from their own dam. This renders the loss of saleable milk considerably smaller compared to rearing systems using milk replacers for feeding of the calves. Moreover, farmers may be more open and consumer expectations may be higher with regard to the application of ‘more natural practices’ in organic production. We anticipate that the majority of farms that are already practicing a dairy cow-calf rearing system are organic farms. Nevertheless, economic consequences of the different rearing systems follow the same mechanisms under conventional conditions. The two model farms differ in their calf rearing systems only, the one farm providing permanent mother cow-calf contact for 13 weeks, while on the other (traditional rearing) farm mother and calf are separated immediately after birth, calves are reared in groups after one week of life and receive on average 8 l of whole milk daily for 13 weeks. The influences considered are shown in Fig. 1 and are described in the next sections.

Fig. 1. Framework for the socio-economic evaluation of rearing systems of dairy calves with or without cow contact.

Income from milk

Machine gained milk yield decreases due to the combined effect of calves ingesting more milk and impaired alveolar milk ejection which, in addition, leads to a reduced milk fat content, which may be balanced to some extent by the possibility that the milk of suckled cows has increased protein content (overview in Johnsen et al., Reference Johnsen, Zipp, Kälber, de Passillé, Knierim, Barth and Mejdell2016). The actual difference between systems depends on the amount of milk fed to the calf by bucket or feeder, as well as the amount of daily and overall contact between cow and calf (Zipp, Reference Zipp2018). Moreover, differing results have been obtained for the whole lactation instead of the nursing period alone. Some investigations did not find a significant reduction (Johnsen et al., Reference Johnsen, Zipp, Kälber, de Passillé, Knierim, Barth and Mejdell2016; Zipp, Reference Zipp2018). In the current accounting, a substantial reduction of 1026 kg energy corrected milk (ECM)/cow was assumed which might be lower in many cases. Furthermore, possible long-term effects are not included. For instance, if calves grow faster due to increased milk intake and possibly further factors, the young stock may reach maturity earlier and have increased milk yields when lactating (Bar-Peled et al., Reference Bar-Peled, Robinzon, Maltz, Tagari, Folman, Bruckental, Voet, Gacitua and Lehrer1997; Meagher et al., Reference Meagher, Beaver, Weary and von Keyserlingk2019). However, evidence for this is inconsistent (see Zipp and Knierim, Reference Zipp and Knierim2020) and more research is needed on the long-term effects of dairy calf rearing with cow-calf contact. Another potential factor would be the milk price which can be higher if the label includes the aspect of rearing dairy calves with cow contact, although as yet there are only very few examples (Bickelhaupt and Verwer, Reference Bickelhaupt and Verwer2013). Currently in Germany two organic initiatives label organic products originating from cow-calf contact rearing, one of them with a certification (https://kuhpluskalb.de), but as yet there are a limited number of suppliers within these label initiatives (3 and 31 farms, respectively).

Income from calves

The most constant effect of dam rearing reported is a faster growth with higher calf weights at weaning (Asheim et al., Reference Asheim, Johnsen, Havreroll, Mejdell and Grøndahl2016; Johnsen et al., Reference Johnsen, Zipp, Kälber, de Passillé, Knierim, Barth and Mejdell2016) and later on (Wagenaar and Langhout, Reference Wagenaar and Langhout2007). Moreover, in the accounting it was assumed that calf losses are reduced (5.7% vs. 6.9%; Ehrlich, Reference Ehrlich2003), although results on calf health are variable (Wagenaar and Langhout, Reference Wagenaar and Langhout2007; Roth et al., Reference Roth, Barth, Gygax and Hillmann2009; Asheim et al., Reference Asheim, Johnsen, Havreroll, Mejdell and Grøndahl2016) and risks of accidents are possibly increased. Once again, long-term effects on herd health are difficult to estimate and should be monitored. Additional future influences could be the price paid for calves, veal or beef in the light of labelling initiatives, although already now it is reported that dam reared calves achieve higher prices (Bickelhaupt and Verwer, Reference Bickelhaupt and Verwer2013).

Other income and costs

No differences were expected regarding any other incomes, for example cull cows. However, for farms that sell breeding animals, problems with the correction of performance testing due to milk consumed by calves during the nursing period can decrease marketing potentials, if no satisfactory solution can be found (Bickelhaupt and Verwer, Reference Bickelhaupt and Verwer2013; Kälber and Barth, Reference Kälber and Barth2014).

On the side of costs, the highest influence is to be expected from building costs. In newly built or rebuilt farms, it can be an advantage that calf hutches or similar housing systems for calves until 13 weeks are not necessary. The keeping of calves with the cows in a cubicle system further reduces necessary litter provision (a direct cost). On the other hand, some rebuilding might be necessary in existing cow sheds in order to allow calves access to a creep area with separate provision of feed, water and protected lying places, and in order to fulfil legal requirements regarding the flooring (EU, 2008b: bedded area for calves under two weeks, certain requirements on slat and gap width in the implementing German regulation). In the accounting, it was assumed that the walking area in the cow shed has non-slatted floors and that a bedded creep area can be constructed by simple means. Thus, elated investments, depreciation and interest, as well as insurance are considerably lower than for the calf hutches.

Labour costs

The labour demand for the feeding of calves differs between systems (Bickelhaupt and Verwer, Reference Bickelhaupt and Verwer2013; Spengler Neff et al., Reference Spengler Neff, Ivemeyer and Schneider2015). The actual difference depends on the applied feeding system (bucket feeding vs. automatic feeder, for example), the suckling system (e.g. permanent or restricted cow-calf contact) and the amount of time the farmers spend with their calves in order to build a good human-animal relationship (Spengler Neff et al., Reference Spengler Neff, Ivemeyer and Schneider2015) and monitor calf behaviour and health. Following Asheim et al. (Reference Asheim, Johnsen, Havreroll, Mejdell and Grøndahl2016) a reduction of about 10 h/dam reared calf was assumed in the accounting. Despite lower amounts of machine gained milk, in line with Asheim et al. (Reference Asheim, Johnsen, Havreroll, Mejdell and Grøndahl2016) a reduced labour demand for milking was not expected due to the additional necessity to check for empty quarters.

Direct costs

These include costs for litter provision, calves' concentrate feeding and treatment costs that were assumed to be slightly reduced in dam rearing. In addition, a slightly better cow fertility was expected leading to lower feeding costs per kg milk ECM and insemination costs. However, both for calf health (see above) and cow fertility (Johnsen et al., Reference Johnsen, Zipp, Kälber, de Passillé, Knierim, Barth and Mejdell2016), mixed results are reported, in the latter case with predominantly no effect of rearing system. Regarding health, an increased risk of disease transmission between cow and calf (Bickelhaupt and Verwer, Reference Bickelhaupt and Verwer2013; Johnsen et al., Reference Johnsen, Zipp, Kälber, de Passillé, Knierim, Barth and Mejdell2016) might even lead to negative effects. However, these cost positions have a relatively small contribution to the overall balance.

Framework concerning non-monetary factors

The success of a production system does not only depend on monetary costs and incomes, but may be enhanced or constrained by non-monetary factors. Inputs on the level of the individual farm are, for instance, the attitude, motivation, knowledge and skill of the farmer whilst outputs of dam rearing may be an enhanced work quality due to the possibility to experience cow-calf interactions and a more pronounced play behaviour (Langhout, Reference Langhout2003; Grøndahl et al., Reference Grøndahl, Skancke, Mejdell and Høgset Jansen2007). In addition to positive animal welfare effects, the application of a more natural rearing system that is favoured by consumers (Busch et al., Reference Busch, Weary, Spiller and von Keyserlingk2017) may generate a better reputation and higher sustainability. On the other hand, negative outputs are also possible. For instance, if the weaning and separation process is associated with strong calling of cow and calf, it may impair labour quality on the farm, but also disturb the neighbourhood (Bickelhaupt and Verwer, Reference Bickelhaupt and Verwer2013; Johnsen et al., Reference Johnsen, Zipp, Kälber, de Passillé, Knierim, Barth and Mejdell2016). Neighbour's complaints may then in turn be a negative input factor. Whether this is a problem depends on the application of solutions including less abrupt, but stepwise weaning and separation (reviewed in Meagher et al., Reference Meagher, Beaver, Weary and von Keyserlingk2019). If dam reared calves are less used to human handling, this may increase work safety risks on the farm. Increased risks of transmitting diseases such as paratuberculosis via direct contact (Bickelhaupt and Verwer, Reference Bickelhaupt and Verwer2013) possibly also affect consumers, if the suspected relation to human gut diseases is true. However, according to conclusions in the review of Beaver et al. (Reference Beaver, Meagher, von Keyserlingk and Weary2019), it is still open whether cow-calf contact is a significant risk factor of paratuberculosis (Johne's disease).

Example of full cost accounting

Costs and incomes were calculated based on data from a German farm (for convenience) with permanent cow-calf contact system for 13 weeks (on average 44 cows, 4 lactations, 5063 kg ECM/cow and in addition data on feeding, milk contents, somatic cell counts, cow losses and income from slaughtered cows), complemented by standardized data (for labour demand and labour costs; KTBL, 2015), while weaning weight, milk consumption, calf losses, treatment costs etc. were literature based assumptions (Table 1). Data were compared between this and an equivalent model farm that was supposed to practice traditional, separated calf rearing.

Table 1. Outcomes of full cost accounting of two organic model farms, with permanent cow-calf contact during 13 weeks vs. separate calf rearing (immediate cow-calf separation and 13 weeks whole milk bucket feeding)

In this example, both systems show a negative imputed net profit of milk production which is realistic and widespread (without allowing conclusions to be drawn about total farm income). Here costs for a new barn building were assumed and feed costs valued at full costs. In addition, the own factors used on dairy farms are not always fully remunerated. Nevertheless, the case study shows that under certain conditions, an economic advantage of calf rearing with full cow contact might be achieved. However, depending on actual outcomes and prices, the overall balance can vary.