Calculating Cost in Heifers and Bulls

[MOFarmer2013]

I am trying to find the most accurate way to determine profitability in each individual cow and compute how much it cost to have a cow for year. I know it is easy to calculate ALL expenses by the number of head. What I am trying to find out is how does everyone else calculate when they keep a heifer or a bull. It seems to me if you keep a heifer for 2 years without any income, your numbers would be skewed.

 

[Lucky_P]

Well, yeah. You're gonna have to incur all the expenses associated with feeding/caring for that heifer 'til she's at least two and a half... when that first calf is big enough to wean and sell... before you get any return on the investment you've made in her.
And, there's always the risk that something could happen to her before she delivers... or she could have a dystocia and you lose heifer, calf, or both, etc.

 

[angus9259]

Well, yeah. You're gonna have to incur all the expenses associated with feeding/caring for that heifer 'til she's at least two and a half... when that first calf is big enough to wean and sell... before you get any return on the investment you've made in her.
And, there's always the risk that something could happen to her before she delivers... or she could have a dystocia and you lose heifer, calf, or both, etc.

I'm gonna try and sell most of my heifers as breds People like buying them for some reason even given all the risks you mention.

 

[TennesseeTuxedo]

Well, yeah. You're gonna have to incur all the expenses associated with feeding/caring for that heifer 'til she's at least two and a half... when that first calf is big enough to wean and sell... before you get any return on the investment you've made in her.
And, there's always the risk that something could happen to her before she delivers... or she could have a dystocia and you lose heifer, calf, or both, etc.

I'm gonna try and sell most of my heifers as breds People like buying them for some reason even given all the risks you mention.

That's because you've taken on the expense of growing them out to breeding age and taken the time to get them bred.

 

[backhoeboogie]

Fertility is the only reason I retained heifers. Genetics are a good thing.

Replacements for older cows is one thing. Expanding is another. Some years are better than others. My total income minus my total expenses is how I figure my bottom line. I could argue equity. I could argue all kinds of things. What goes out of my pocket or what comes in to my pocket is the bottom line.

 

[Lucky_P]

Yep, bhb.
I know - or, at least, I think I know - what I've got in those home-bred heifers... I know their dams, granddams, etc., back for all of 30 years... as well as their sires. I at least know what's behind them... good and/or bad.
Not all of them shake out as I'd like, but they're the result of breeding and retention choices I've made, and for the most part, I'm usually satisfied with them.

 

[Caustic Burno]

At today's numbers I figure you would have about 1500 bucks in a heifer.
You have two years in the dam with no return to the bottom line eight months after the heifer is weaned till bred and another 283 days till calving

 

[Bigfoot]

Keeping heifers skews your expenses. It also skews your gross income. That heifer will also recoupe some in salvage value, when she ages out of the herd.

You almost have to get to a point, where you view your herd as an income producing asset. As with any asset, the return will vary from year to year.

 

[Brute 23]

I don't see how keeping a heifer scews any thing. It's a cost just like buying a bull, cutting hay, fixing fence, etc. It an expense the producing cows have to pay for.

 

[Lucky_P]

Good point, CB - I'd not even considered the impact on the dam's economic contribution, by not having the benefit of a 'saleable' calf in the year she produced that heifer that you retain.
But... I'd still rather keep my own homebred replacement than buy one I have no idea about what's behind.

 

[Kingfisher]

Well, yeah. You're gonna have to incur all the expenses associated with feeding/caring for that heifer 'til she's at least two and a half... when that first calf is big enough to wean and sell... before you get any return on the investment you've made in her.
And, there's always the risk that something could happen to her before she delivers... or she could have a dystocia and you lose heifer, calf, or both, etc.

I'm gonna try and sell most of my heifers as breds People like buying them for some reason even given all the risks you mention.

That's because you've taken on the expense of growing them out to breeding age and taken the time to get them bred.

Or is it the opportunity of the selling bred heifers vs calving and selling calves? I'm thinking if you can buy yearling heifers right and AI ( no bull expense) them sold as bred you might do all right.

 

[Brute 23]

Good point, CB - I'd not even considered the impact on the dam's economic contribution, by not having the benefit of a 'saleable' calf in the year she produced that heifer that you retain.
But... I'd still rather keep my own homebred replacement than buy one I have no idea about what's behind.

That cow actually doubled her production long term. You skipped one check to receive two for years to come. If you keep one of that cows heifers the original cow triple her production. Now you skipped 2 checks but get 3 checks for years to come.

It's like taking your dividends and buying more stock.

Plus, you don't have to pay taxes on that calf. So it's like buying more stock inside a Traditional IRA. You will only be taxed if you liquidate it.

 

[Caustic Burno]

Good point, CB - I'd not even considered the impact on the dam's economic contribution, by not having the benefit of a 'saleable' calf in the year she produced that heifer that you retain.
But... I'd still rather keep my own homebred replacement than buy one I have no idea about what's behind.

That cow actually doubled her production long term. You skipped one check to receive two for years to come. If you keep one of that cows heifers the original cow triple her production. Now you skipped 2 checks but get 3 checks for years to come.

It's like taking your dividends and buying more stock.

Plus, you don't have to pay taxes on that calf. So it's like buying more stock inside a Traditional IRA. You will only be taxed if you liquidate it.

Not nesacarrily as a heifer is always a crap shoot, secondly you can never recover lost income it is like an extra dollar. Both are just like those talking M&M's they don't exist.
Whether you raise or buy the replacement it cost usually more to retain. In a commercial operation there is no economic gain to retain.
Can't count eggs that haven't hatched.

 

[Brute 23]

I disagree about them being a crap shoot. When you have been raising cattle for 3 or 4 generations and keeping heifers... you can't buy that kind of history. I have said it before, by far I cull more bought cattle than retained heifers hands down.

My avg cost is some where around $350 per year to keep a pair. $400 on lease places and $300 on property already owned.

When I take in to account what a Tiger Stripe, Brangus, Black Motley face cow would cost I can produce them way cheaper... like 2 to 1. I can lease heifer pastures, some not turn out, etc and still be cheaper.

On buying a heifer vs a cow, if a $2500, 3500+ cow prolapses, gets a bad bag, hurts a leg, etc it's a big hit. If my $1200 home raised heifer does it, it does not sting near as bad.

There is just as much risk in either one.

Now, if you just bought you cows 2 years ago and your keeping heifers out of them, yes, your risk is higher.

 

[M-5]

Good point, CB - I'd not even considered the impact on the dam's economic contribution, by not having the benefit of a 'saleable' calf in the year she produced that heifer that you retain.
But... I'd still rather keep my own homebred replacement than buy one I have no idea about what's behind.

That cow actually doubled her production long term. You skipped one check to receive two for years to come. If you keep one of that cows heifers the original cow triple her production. Now you skipped 2 checks but get 3 checks for years to come.

It's like taking your dividends and buying more stock.

Plus, you don't have to pay taxes on that calf. So it's like buying more stock inside a Traditional IRA. You will only be taxed if you liquidate it.

As far as raising vs buying , Its a crap shoot on both. Personally Id rather keep a heifer even tho the last few have drove me crazy at calving time. economically I thing the long term you come out ahead with home raised replacements. Its 6 of one half dozen of the other.

 

[angus9259]

Well, yeah. You're gonna have to incur all the expenses associated with feeding/caring for that heifer 'til she's at least two and a half... when that first calf is big enough to wean and sell... before you get any return on the investment you've made in her.
And, there's always the risk that something could happen to her before she delivers... or she could have a dystocia and you lose heifer, calf, or both, etc.

I'm gonna try and sell most of my heifers as breds People like buying them for some reason even given all the risks you mention.

That's because you've taken on the expense of growing them out to breeding age and taken the time to get them bred.

Good points. My expenses aren't enormous. I always herd bull breed them and have a rented pasture at $20/head/month. But your comments are valid. When I was getting $1500 a head for weaned heifers I sold them all except the couple I had to retain genetics on. Now they can be as low as $700. Changes the equation.

 

[cmay]

Good point, CB - I'd not even considered the impact on the dam's economic contribution, by not having the benefit of a 'saleable' calf in the year she produced that heifer that you retain.
But... I'd still rather keep my own homebred replacement than buy one I have no idea about what's behind.

That cow actually doubled her production long term. You skipped one check to receive two for years to come. If you keep one of that cows heifers the original cow triple her production. Now you skipped 2 checks but get 3 checks for years to come.

It's like taking your dividends and buying more stock.

Plus, you don't have to pay taxes on that calf. So it's like buying more stock inside a Traditional IRA. You will only be taxed if you liquidate it.

You don't have to pay taxes on the calf, but neither can you depreciate out the calf on your taxes like you can with a purchased heifer.

 

[Brute 23]

Good point, CB - I'd not even considered the impact on the dam's economic contribution, by not having the benefit of a 'saleable' calf in the year she produced that heifer that you retain.
But... I'd still rather keep my own homebred replacement than buy one I have no idea about what's behind.

That cow actually doubled her production long term. You skipped one check to receive two for years to come. If you keep one of that cows heifers the original cow triple her production. Now you skipped 2 checks but get 3 checks for years to come.

It's like taking your dividends and buying more stock.

Plus, you don't have to pay taxes on that calf. So it's like buying more stock inside a Traditional IRA. You will only be taxed if you liquidate it.

You don't have to pay taxes on the calf, but neither can you depreciate out the calf on your taxes like you can with a purchased heifer.

I can write off the expenses for raising the heifer. Its the same thing. Both lower you tax liability.

There is no difference in buying heifers vs cows from a tax stand point, a risk stand point, or any thing else. You need to buy the animal you get the best bang for the buck, at that time. If you find a good deal on cows that you know the some history on, buy them. If you can find a great deal on heifers that you know the history on, buy them. If you can raise better quality cheaper, raise them. If you can buy better quality cheaper, buy them. If you limit yourself to only buying cows, or only raising heifers, IMO you are missing out. Go where the best deal is (and that's not always the cheapest). :tiphat:

 

[backhoeboogie]

It still comes back to cash crop now or cash crop later.

If I sell 70 head cash crop of calves for $49,000 gross or keep 5 heifers and sell for say $45750. I have cut into my profits. Additionally I have to feed those 5 heifers for another year. Take a chance on them calving. I've had a neighbor's bull jumping fence and breeding them to young and many other negative experiences.

Depreciation really doesn't mean a lot to me. I can depreciate off a bought heifer or cow but when I sell her I have to take that profit which usually negates the depreciation benefit. Sure, if she dies I can write that off but it is pure loss all the way around.

The benefit for me is knowing. I honk that horn and yell "Come on" and they come running to the alley. They think its time to change pastures. Low maintenance. Their dams were extremely fertile. Good genetics from the sire. Desirable assets. But now I might have to change bulls, which has been a negative before. A year for a bull change could be a good year for retaining desirable heifers etc.

I could go on and on. There have been those that I wished I had not retained. There are those you are so glad you retained.

Did the dam calve every 11 months or so? Did she live to be 18 calves old without foot problems or other issues? Was she calm and docile? What is your threshold?