Variables affecting herd average lifetime short-run profit in a sample of Norwegian dairy herds

Abstract

This study combined exploratory factor analysis (EFA) and Lasso regression to give a deeper insight into production-economic variables affecting short-run dairy cow lifetime profit, DCLP, at the farm level. The study rests on data on heifer growth, feeding, financial, and production variables from 13 farms. We calculated costs and income for an average animal per month and herd. Costs and income were discounted and summarized to a DCLP at time of birth, converted to profit as a monthly annuity equivalent value, MEQ. MEQ was regressed on the 53 original variables (Lasso) or on factor scores (EFA) derived from the original variables. Both EFA and Lasso regressions were used to deal with co-linearity problems. The EFA provides a higher resolution of the underlying quantities than Lasso regression. The factors improving DCLP were reduced roughage costs and high milk yield combined with the lowest possible age at first calving in the data.