Options on Retaining Heifers

(Bob Weaber) We’re moving into a time of lower calf prices and one of the things that I really want producers to think about as they grow replacement heifers is figure out how to do that and take advantage of either opportunities in the marketplace to buy heifers cheaper than they can raise them or do some strategic planning and investment in building heifers that cost less than what they can buy in the marketplace. I think the very most important ones is looking at sort of your cash flow position this year. We’re still in the time of seven to $800 average cow cost and so you actually may need to sell more heifers this year to meet some obligations from either lending or cash flow perspectives. If we move to a position where we’re going to keep or build replacement heifers the things we need to think about are, one, are our heifers worth more than suitable ones we could buy and make a swap. And then the other bits are really centered around how do I get a heifer from a weaned heifer calf to her first calf. And the principle costs associated with doing that are mostly time and feed. And then the other things are some breeding costs obviously as we expose those females if we keep them this year we’ll breed them in 2017. The other bit, I think sometimes we forget about is that if we keep a set of heifers now, not all of those females are going to make it to their first calf. Our efforts then, the biggest cost center after the value of the heifer really is feed. The other bit in there is thinking through what are our targets in terms of endpoints for building those replacement heifers. There are some data that supports maybe moving those target numbers down a little bit. But that’s certainly a way to save feed particularly in this development phase because you can stretch out the gain on those females back to pasture development versus harvest forage. The challenge is if you don’t monitor those heifers very closely in terms of their weight gain to assure that they move up in weight and move forward in terms of body weight gain, you’ve got a lot less cushion on the bottom end. There’s useful tools available to us that’s been developed by Ag Economists. One of them here at K-State in our Ag Econ Group, Glynn Tonsor and Kevin Dhuyvetter’s Beef Replacement Female Excel Worksheet. And that one’s I think a really good tool because it looks at not only kind of what’s the value of that replacement heifer going into the system, what she cost, but what’s her expected productivity and profitability through her productive life. This is one of those areas in terms of sort of ranch management decision making that can either really set you up for some opportunities over the next three to four years or kind of put you behind the eight ball a little bit in terms of you’ve invested a lot of money and you’re trying to eke the return out of that.

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