Economic Benefits of Reducing Somatic Cell Count under the Milk Quality Program of Ontario

An empirical stochastic model for monthly bulk milk SCC was used to determine the impact of bulk milk SCC on the probability and cost of penalties under the milk quality program of Ontario, Canada. Under this program, milk price is reduced by $1 (Canadian)/hl each time bulk milk SCC exceeds 500,000 cells/ml three times in a 4-mo period. The model included herd average bulk milk SCC, effects of season, five autoregressive terms for bulk milk SCC in previous months, and a random variable with a standard deviation that depended on herd average SCC. Probabilities of receiving a penalty were 20, 13, 7, 4, 1.5, and 0.4%/mo for herd average bulk milk SCC of 450,000, 400,000, 350,000, 300,000, 250,000, and 200,000 cells/ml, respectively. Associated average penalty costs were $0.81, 0.47, 0.17, 0.04, 0.002, and 0.000/hl, respectively. Marginal return functions for reducing herd average linear somatic cell score were derived also. Marginal values were minimal for herd average linear scores <3. For the population, the marginal value of reducing average linear score by one unit from a mean of 3 was $19.60/yr per cow. Results indicated that efforts to reduce bulk milk SCC resulted in substantial extra milk revenues. A bulk milk SCC target of 250,000 cells/ml was advocated.