I dug out my old long term pay back analysis, and did the numbers, but I want to double check them before posting it. I'm showing retaining heifers to come out a long way ahead, more than I expected, so I want to check for adding errors.
Anyway, I did more pencilling, including lost revenues, and no matter how I pencil it, I still come out ahead by retaining heifers.
Retaining:
Cost to keep cow for 1 yr - $327 (I finally got my books updated for last year. Thought I was higher than that.)
Feeding heifer calf to breeding age - $164
Feed cost to calving - $295 (based on 85% feed consumption as the animal isn't mature yet. I used 90% of the cost, as some fixed costs don't change whether the animal is mature or not)
That leaves me with $786 invested in that heifer which is set to drop a calf. This is consistent with both the link provided earlier, and other studies I've read from Saskatchewan.
Buying:
Cow cost - $327
Feeder cost - $164
Feeder income - $700 (based on heavy top end 8 weight price)
Cost of 6 month bred replacement heifer - $1200 (this would be the same quality of animal that I raise. Yes, I can buy cheaper, but why would you want to lower herd quality?)
Feeding 6 month bred heifer to calving - $160 Note that this is with my circumstances, calving in Feb. That means I'm feeding that bred animal throughout the time of the year with the most expense.
$1151 - total cost of purchased replacement thats ready to drop a calf.
A few points to note from some of the other messages:
Crowder - I know exactly what my costs/cow are from year to year. I include everything, including the cost of my work clothes.
Caustic - You have a good point about buying pairs or 3 'n' 1s, however you're also going to have a certain number of culls coming from those purchases. I bought some nice pairs last year for $1400, with calves close to weaning age. To get the $1400 price, I had to take a pen of 10 (half his choice, half mine), of which 4 I culled (1 with a poor calf, 2 bad dispositions when they dropped their new calves, 1 hard doer). Cow prices up here are poor, with the BSE closed border, so I only managed to fetch $200 for those culls. I got 685 for their calves, so I still lost $515 per cull, not including the feed I stuck into the three with bad dispositions/hard doing.
Probably the most important point that I've seen in this thread is from the study link:
"While the above is only an estimate, it is extremely important to analyze each line above for your actual cost."
You can ask people on the internet all day about their opinion, but every area is different. Different costs, different availability of replacements, different animals. The advice I can give you is to work the numbers out yourself, with YOUR costs of production and the costs of replacements in YOUR area.
Rod