Raising vs buying replacement heifers

[DiamondSCattleCo]

I really think all this boils down to is what that heifer will bring and what you can buy replacements for. If you are buying 3 in 1 you will come out ahead, buying at the right price.

This is exactly what I've been saying right along. I think its important that each person do their number crunching and decide the best way for them to proceed. Every area has different costs and at different times. For example, that $1200 replacement heifer? A couple years back, during the height of a draught in another area of the province, I could buy good registered bred heifers for $800. In a year like that, it would not have made sense to keep my own replacements, except for not wanting to lose my genetics.

Rod

 

[aplusmnt]

I had a long bunch of figures showing the cost advantage of the Bred heifer over the retained heifer to post but then I thought of something I had never thought of before. I could show where it was more economical to buy a heifer bred than keep one due to 2 calf crops to the 1 calf crop in same time period. But had not factored in that the retained heifer would (if all things were same) would stay in the herd an extra year to make up that calf on the back end. That just blew my figures.

So my final thought was if you can buy a bred heifer for $1,000.00 or less, it would be cheaper to buy bred heifers. If you have to pay $1,200.00 or more then it would probably be cheaper to retain your heifers.

Probably other variables in their that would be a factor, like Novatech Brahman's that have to be retained for longer for late maturing.

 

[bigbull338]

I had a long bunch of figures showing the cost advantage of the Bred heifer over the retained heifer to post but then I thought of something I had never thought of before. I could show where it was more economical to buy a heifer bred than keep one due to 2 calf crops to the 1 calf crop in same time period. But had not factored in that the retained heifer would (if all things were same) would stay in the herd an extra year to make up that calf on the back end. That just blew my figures.

So my final thought was if you can buy a bred heifer for $1,000.00 or less, it would be cheaper to buy bred heifers. If you have to pay $1,200.00 or more then it would probably be cheaper to retain your heifers.

Probably other variables in their that would be a factor, like Novatech Brahman's that have to be retained for longer for late maturing.

but if you retain your heifers you still lose 2 calves by waiting 2yrs for the home raised heifer to calve.i can buy reg beefmaster heifers bred for $1500 to $2000.an they be paid for in 2 calves.now if i kept said reg heifer till she calves at 2 id have $1550 in them.an lost 2 calves valued at $1500.so buying bred heifers or cows works better.

 

[Caustic Burno]

I really think all this boils down to is what that heifer will bring and what you can buy replacements for. If you are buying 3 in 1 you will come out ahead, buying at the right price.

This is exactly what I've been saying right along. I think its important that each person do their number crunching and decide the best way for them to proceed. Every area has different costs and at different times. For example, that $1200 replacement heifer? A couple years back, during the height of a draught in another area of the province, I could buy good registered bred heifers for $800. In a year like that, it would not have made sense to keep my own replacements, except for not wanting to lose my genetics.

Rod

Best I figure I can't raise one for less than 1200 bucks. I can hand pick Heavies for less than that or 3n1's for a little more.
Third I can depreciate the cost or write off the cost of purchased cattle, there is no write off for that retained heifer that alone makes her a loser.
I can depreciate the purchase price of the bought heavy for five years the whole time she is producing 5 calf's to sell, this cow has increase her profitability over the heifer by at least the purchase price due to the tax advantage if nothing else.

 

[aplusmnt]

I had a long bunch of figures showing the cost advantage of the Bred heifer over the retained heifer to post but then I thought of something I had never thought of before. I could show where it was more economical to buy a heifer bred than keep one due to 2 calf crops to the 1 calf crop in same time period. But had not factored in that the retained heifer would (if all things were same) would stay in the herd an extra year to make up that calf on the back end. That just blew my figures.

So my final thought was if you can buy a bred heifer for $1,000.00 or less, it would be cheaper to buy bred heifers. If you have to pay $1,200.00 or more then it would probably be cheaper to retain your heifers.

Probably other variables in their that would be a factor, like Novatech Brahman's that have to be retained for longer for late maturing.

but if you retain your heifers you still lose 2 calves by waiting 2yrs for the home raised heifer to calve.i can buy reg beefmaster heifers bred for $1500 to $2000.an they be paid for in 2 calves.now if i kept said reg heifer till she calves at 2 id have $1550 in them.an lost 2 calves valued at $1500.so buying bred heifers or cows works better.

If the retained heifer has a calf at the age of two you would only loose one calf.

I am with Caustic on the tax right off. We pay enough taxes, I like to have as many deductions as possible. Buying gives you an insurance policy of sort in case the heifer dies, at least you can recoup some of the loss through tax deduction.

 

[somn]

My figures two months ago on a previous thread:

Been crunching the numbers on this a bunch lately here is what I have came up with. Using the Average cost of $1.00 per day up keep per head.

$365.00 Cow cost from Wean of previous calf to wean of
retained heifer 12 months

$270.00 Heifer cost post weaning in open Stage 270 days

$180.00 Heifer up keep while bred 180 days to the point that
I would be buying a bred heifer 3 months prior to
Calving.

$815.00 Total

This is the cost to raise a heifer to the point that I would be buying a bred heifer. Usually buying bred heifers when 6 months bred. This would bring me up to the equal point of buying that already bred one. Then there would be another $90.00 cost to take her that last 90 days to calving but that cost would also be there if I bought a bred.

Price might be a little higher due to more feed, pelvic exam and few other cost over and above say the $1.00 per day average cost.

If you bought a bred heifer at say $1,200.00 you would save around $385.00 buy retaining one

BUT you would loose say $500.00 from the heifer you could have sold to buy that bred, and you loose one extra calf that the bought Bred would have had that the retained one would have not had, that is another $500.00.

So to me a retained heifer cost me $615.00 more than buying a bred heifer at $1,200.00

Would cost even more if I could find a good bred for say $1,000.00 because the cost of retaining one does not change. So if I found $1,000.00 bred heifers my cost of retaining one verses buying bred makes me an $815.00 looser.

But then to buy one I have to float the extra cash to put with the sale price of the could be retained heifer. I might not have that cash to put with it so retaining might be the best way to grow the herd.

Hope that all makes since. Probably some Kansas Math mistakes in there somewhere.

I wish I could sell home raised calves out of my own cows and never have to pay for the cost of keeping the cow for a year or the cost of feeding the calves until sale day of the calves.

 

[DiamondSCattleCo]

Third I can depreciate the cost or write off the cost of purchased cattle, there is no write off for that retained heifer that alone makes her a loser.

Again, we've got regional differences. We have two ways of legally reporting that retained heifer:

1) Don't report her at all. She never adds to your income, therefore you're not paying taxes on her. Depending on how close you are to a new tax bracket, this may actually save you money over a write off from a new replacement. When you cull her, you report the income from the cull.

2) Report her as retained livestock. This is the preferable way of doing things. The tax laws get a little balled up with this, so I won't go into details, but you end up paying (or not paying) the same amount of tax as 1) but your heifer is on record for any support payments.

Rod

 

[KenB]

I had a long bunch of figures showing the cost advantage of the Bred heifer over the retained heifer to post but then I thought of something I had never thought of before. I could show where it was more economical to buy a heifer bred than keep one due to 2 calf crops to the 1 calf crop in same time period. But had not factored in that the retained heifer would (if all things were same) would stay in the herd an extra year to make up that calf on the back end. That just blew my figures.

So my final thought was if you can buy a bred heifer for $1,000.00 or less, it would be cheaper to buy bred heifers. If you have to pay $1,200.00 or more then it would probably be cheaper to retain your heifers.

Probably other variables in their that would be a factor, like Novatech Brahman's that have to be retained for longer for late maturing.

but if you retain your heifers you still lose 2 calves by waiting 2yrs for the home raised heifer to calve.i can buy reg beefmaster heifers bred for $1500 to $2000.an they be paid for in 2 calves.now if i kept said reg heifer till she calves at 2 id have $1550 in them.an lost 2 calves valued at $1500.so buying bred heifers or cows works better.

If the retained heifer has a calf at the age of two you would only loose one calf.

I am with Caustic on the tax right off. We pay enough taxes, I like to have as many deductions as possible. Buying gives you an insurance policy of sort in case the heifer dies, at least you can recoup some of the loss through tax deduction

;-) You will pay taxes on the money that you get from selling the heifer that you didn't retain.

 

[bigbull338]

I had a long bunch of figures showing the cost advantage of the Bred heifer over the retained heifer to post but then I thought of something I had never thought of before. I could show where it was more economical to buy a heifer bred than keep one due to 2 calf crops to the 1 calf crop in same time period. But had not factored in that the retained heifer would (if all things were same) would stay in the herd an extra year to make up that calf on the back end. That just blew my figures.

So my final thought was if you can buy a bred heifer for $1,000.00 or less, it would be cheaper to buy bred heifers. If you have to pay $1,200.00 or more then it would probably be cheaper to retain your heifers.

Probably other variables in their that would be a factor, like Novatech Brahman's that have to be retained for longer for late maturing.

but if you retain your heifers you still lose 2 calves by waiting 2yrs for the home raised heifer to calve.i can buy reg beefmaster heifers bred for $1500 to $2000.an they be paid for in 2 calves.now if i kept said reg heifer till she calves at 2 id have $1550 in them.an lost 2 calves valued at $1500.so buying bred heifers or cows works better.

If the retained heifer has a calf at the age of two you would only loose one calf.

I am with Caustic on the tax right off. We pay enough taxes, I like to have as many deductions as possible. Buying gives you an insurance policy of sort in case the heifer dies, at least you can recoup some of the loss through tax deduction

;-) You will pay taxes on the money that you get from selling the heifer that you didn't retain.

you only pay taxes on the money if your expenses dont offset your profits.but if i sale heifers insted of retaining them.ill buy back 1 or 2 breds or pairs to use the money up every year.

 

[alftn]

How are ya'll figuring the cost of you cattle...I do not come close to your numbers....but I am not adding in land cost (pasture rent). My real cost per cow is ,Hay(4 roles/100$), salt (3.99), meds.(10$),protein tubs(10$), and grain I choose to feed (make them pets)... Other cost land, labor, tractor,gas,4 wheeler...I can make these numbers anything (high or low)...I figuar it would take 750 ac.( east U.S.) 7500 in texas... to be a real rancher not just a hobbie farmer..Much smaller you would have to work off the farm at a job... Yes you might do Reg stock, Horses, or longhorns on fewer ac...

 

[bigbull338]

How are ya'll figuring the cost of you cattle...I do not come close to your numbers....but I am not adding in land cost (pasture rent). My real cost per cow is ,Hay(4 roles/100$), salt (3.99), meds.(10$),protein tubs(10$), and grain I choose to feed (make them pets)... Other cost land, labor, tractor,gas,4 wheeler...I can make these numbers anything (high or low)...I figuar it would take 750 ac.( east U.S.) 7500 in texas... to be a real rancher not just a hobbie farmer..Much smaller you would have to work off the farm at a job... Yes you might do Reg stock, Horses, or longhorns on fewer ac...

well im in texas.an i have close to 400acs.an on that i can run 150 momma cows.an bale hay for hay for them.i get my cost by using the sale value of replacement heifers.$600 for comm heifers an $800 for reg heifers.an $1 a day cost to raise that calf from weaning till calving.

 

[aplusmnt]

My figures two months ago on a previous thread:

Been crunching the numbers on this a bunch lately here is what I have came up with. Using the Average cost of $1.00 per day up keep per head.

$365.00 Cow cost from Wean of previous calf to wean of
retained heifer 12 months

$270.00 Heifer cost post weaning in open Stage 270 days

$180.00 Heifer up keep while bred 180 days to the point that
I would be buying a bred heifer 3 months prior to
Calving.

$815.00 Total

This is the cost to raise a heifer to the point that I would be buying a bred heifer. Usually buying bred heifers when 6 months bred. This would bring me up to the equal point of buying that already bred one. Then there would be another $90.00 cost to take her that last 90 days to calving but that cost would also be there if I bought a bred.

Price might be a little higher due to more feed, pelvic exam and few other cost over and above say the $1.00 per day average cost.

If you bought a bred heifer at say $1,200.00 you would save around $385.00 buy retaining one

BUT you would loose say $500.00 from the heifer you could have sold to buy that bred, and you loose one extra calf that the bought Bred would have had that the retained one would have not had, that is another $500.00.

So to me a retained heifer cost me $615.00 more than buying a bred heifer at $1,200.00

Would cost even more if I could find a good bred for say $1,000.00 because the cost of retaining one does not change. So if I found $1,000.00 bred heifers my cost of retaining one verses buying bred makes me an $815.00 looser.

But then to buy one I have to float the extra cash to put with the sale price of the could be retained heifer. I might not have that cash to put with it so retaining might be the best way to grow the herd.

Hope that all makes since. Probably some Kansas Math mistakes in there somewhere.

I wish I could sell home raised calves out of my own cows and never have to pay for the cost of keeping the cow for a year or the cost of feeding the calves until sale day of the calves.

You lost me there? Did I do that or something in my figures? Or are you just wishing out loud?

 

[somn]

Aplus Maybe I misunderstand you but you say you lose $500 by not selling the retained heifer and that money could have been used instead to buy a bred heifer and then you also lose another $500 on the second calf from the bred heifers but unless you do things different than everyone else most people need to pay feed costs and cow upkeep.

 

[aplusmnt]

Aplus Maybe I misunderstand you but you say you lose $500 by not selling the retained heifer and that money could have been used instead to buy a bred heifer and then you also lose another $500 on the second calf from the bred heifers but unless you do things different than everyone else most people need to pay feed costs and cow upkeep.

I did not call it $500.00 profit. The profit you make is a whole other thing. And when comparing a retained heifer to a Bought bred heifer I am once again not talking profit when I say the Bred heifer would have given you an extra $500.00 calf to sell.

When comparing the two together, you would be feeding the Retained heifer and feeding the Bred heifer, you would be doctoring both of them etc...... only difference is the Bred heifer would generate an Extra Calf (est. $500.00) that the retained heifer would not.

So in the same time period of taking care of either animal at say $1.00 per day the Bred generated two calf crops instead of one. Giving you an extra $500.00 of revenue to help pay for her extra cost.

I also did mention that there could be some variables such as pelvic exams etc....that could change this $1.00 a day but for basic figuring we are assuming the Retained heifer and Bred heifer have equal cost.

 

[somn]

BUT you would loose say $500.00 from the heifer you could have sold to buy that bred, and you loose one extra calf that the bought Bred would have had that the retained one would have not had, that is another $500.00.

It appears by reading this you think that by retaining the heifer you lose $500 by not selling her and another $500 by not being able to sell the calf from the bred heifer you could have bought using the income generated by selling the retained heifer. You must be one heck of a cattle man when you can sell any age calf for a $500 profit. I guess it is possible to make $500 per calf by never paying any feed costs or cow upkeep costs.

 

[aplusmnt]

BUT you would loose say $500.00 from the heifer you could have sold to buy that bred, and you loose one extra calf that the bought Bred would have had that the retained one would have not had, that is another $500.00.

It appears by reading this you think that by retaining the heifer you lose $500 by not selling her and another $500 by not being able to sell the calf from the bred heifer you could have bought using the income generated by selling the retained heifer. You must be one heck of a cattle man when you can sell any age calf for a $500 profit. I guess it is possible to make $500 per calf by never paying any feed costs or cow upkeep costs.

Sorry I will have to give you a quick lesson in Reading Comprehension, late for appointment.

The Starting point we are talking about is after a heifer has been raised. You have the choice you can keep her or sell her and use the money to buy an already bred heifer. The profit she generates up to that point is irrelevant in this comparison. She represents an X amount of dollars to be used to either buy herself back into your operation or buy another heifer that is already bred. If you retain her she has virtually equal up keep to the heifer you would have bought. So expenses are not a factor in figuring the cost of the heifers.

We are looking at variations in purchase cost not at how efficient an operation you run. It is simple you have a heifer on your place worth X amount of dollars on Nov 1 do you keep her and pass on the X amount of money or do you sell her for X amount of dollars and use that to purchase a different heifer.

Plus if you would read the whole example I posted you will see I did factor in the cost to raise the retained heifer I will highlight that in bold for you so you can find it below.

My figures two months ago on a previous thread:

Been crunching the numbers on this a bunch lately here is what I have came up with. Using the Average cost of $1.00 per day up keep per head.

$365.00 Cow cost from Wean of previous calf to wean of
retained heifer 12 months

$270.00 Heifer cost post weaning in open Stage 270 days

$180.00 Heifer up keep while bred 180 days to the point that
I would be buying a bred heifer 3 months prior to
Calving.

$815.00 Total

This is the cost to raise a heifer to the point that I would be buying a bred heifer. Usually buying bred heifers when 6 months bred. This would bring me up to the equal point of buying that already bred one. Then there would be another $90.00 cost to take her that last 90 days to calving but that cost would also be there if I bought a bred.

Price might be a little higher due to more feed, pelvic exam and few other cost over and above say the $1.00 per day average cost.

If you bought a bred heifer at say $1,200.00 you would save around $385.00 buy retaining one

BUT you would loose say $500.00 from the heifer you could have sold to buy that bred, and you loose one extra calf that the bought Bred would have had that the retained one would have not had, that is another $500.00.

So to me a retained heifer cost me $615.00 more than buying a bred heifer at $1,200.00

Would cost even more if I could find a good bred for say $1,000.00 because the cost of retaining one does not change. So if I found $1,000.00 bred heifers my cost of retaining one verses buying bred makes me an $815.00 looser.

But then to buy one I have to float the extra cash to put with the sale price of the could be retained heifer. I might not have that cash to put with it so retaining might be the best way to grow the herd.

 

[bigbull338]

BUT you would loose say $500.00 from the heifer you could have sold to buy that bred, and you loose one extra calf that the bought Bred would have had that the retained one would have not had, that is another $500.00.

It appears by reading this you think that by retaining the heifer you lose $500 by not selling her and another $500 by not being able to sell the calf from the bred heifer you could have bought using the income generated by selling the retained heifer. You must be one heck of a cattle man when you can sell any age calf for a $500 profit. I guess it is possible to make $500 per calf by never paying any feed costs or cow upkeep costs.

Sorry I will have to give you a quick lesson in Reading Comprehension, late for appointment.

The Starting point we are talking about is after a heifer has been raised. You have the choice you can keep her or sell her and use the money to buy an already bred heifer. The profit she generates up to that point is irrelevant in this comparison. She represents an X amount of dollars to be used to either buy herself back into your operation or buy another heifer that is already bred. If you retain her she has virtually equal up keep to the heifer you would have bought. So expenses are not a factor in figuring the cost of the heifers.

We are looking at variations in purchase cost not at how efficient an operation you run. It is simple you have a heifer on your place worth X amount of dollars on Nov 1 do you keep her and pass on the X amount of money or do you sell her for X amount of dollars and use that to purchase a different heifer.

Plus if you would read the whole example I posted you will see I did factor in the cost to raise the retained heifer I will highlight that in bold for you so you can find it below.

My figures two months ago on a previous thread:

Been crunching the numbers on this a bunch lately here is what I have came up with. Using the Average cost of $1.00 per day up keep per head.

$365.00 Cow cost from Wean of previous calf to wean of
retained heifer 12 months

$270.00 Heifer cost post weaning in open Stage 270 days

$180.00 Heifer up keep while bred 180 days to the point that
I would be buying a bred heifer 3 months prior to
Calving.

$815.00 Total

This is the cost to raise a heifer to the point that I would be buying a bred heifer. Usually buying bred heifers when 6 months bred. This would bring me up to the equal point of buying that already bred one. Then there would be another $90.00 cost to take her that last 90 days to calving but that cost would also be there if I bought a bred.

Price might be a little higher due to more feed, pelvic exam and few other cost over and above say the $1.00 per day average cost.

If you bought a bred heifer at say $1,200.00 you would save around $385.00 buy retaining one

BUT you would loose say $500.00 from the heifer you could have sold to buy that bred, and you loose one extra calf that the bought Bred would have had that the retained one would have not had, that is another $500.00.

So to me a retained heifer cost me $615.00 more than buying a bred heifer at $1,200.00

Would cost even more if I could find a good bred for say $1,000.00 because the cost of retaining one does not change. So if I found $1,000.00 bred heifers my cost of retaining one verses buying bred makes me an $815.00 looser. ok reading over this i see where somn is coming from.if you retain a heifer that has a sale value of $650 an it cost 250 to maintain cow.then the cow doesnt pay her way since you retained her heifer.putting you $250 in the hole for a yr.now if you add that $250 to the heifer thats $900 at weaning.so add $600 for heifers upkeep till calving.an her value is $1500 a hd.so your deeper in the hole still esp if you add what it cost to keep her mom for the yr.

But then to buy one I have to float the extra cash to put with the sale price of the could be retained heifer. I might not have that cash to put with it so retaining might be the best way to grow the herd.

 

[somn]

Aplus that thought process makes your example even worse now you are double dipping. You say the starting point is after you have already raised the heifer but yet you include the expenses when you tell us how much it cost to raise the heifer to weaning @ $1 per day. Are you trying to tell everyone that you can sell your heifers for $865 on sale day netting a $500 profit after paying the cow upkeep.

In addition to that if your going to add the lost revenue to the cost of retaining the heifer. You need to subtract the same dollar value from the expense of raising the retained hiefer. If she is worth $500 to sell her she is still worth $500 to keep her. Take the $500 calf value off the $815.

You can't show a value for lost revenue of a calf you didn't sell when you retained her without putting a value on her while she still is on the farm.
You can question my reading comprehension all day long as it is obvious that I can comprehend well enough to see your error even though you can't see it. I guess that meens I can comprehend better than you. I shouldn't say it that way what I should say is I understand the cattle industry and you do not. If a calf is worth $500 at a sale it is worth $500 on the farm. Maybe it is that Kansas math you spoke of.

 

[Dusty Britches]

I just read this today:

http://www.cattlenetwork.com/bi_Content ... tID=112438

Cow Calf: Costs Of Heifer Development



At the 2006 Reproductive Strategies in Beef Cattle Conference, Missouri commercial cow-calf producer Mike Kasten presented costs of heifer development in his herd. He successfully uses the Show Me Select Heifer Development Program (SMS). Today, over 98% of his heifers are cycling at the time of their prebreeding exam. This has been achieved by getting his heifers to 65 to 70% of their mature body weight and in a good body condition score at the beginning of breeding season. Following is a summary of his heifer development cost for 2005 spring-born heifers. His costs to develop fall-born heifers usually average about $50 per head less. He noted that approximately 55% of his gross income now comes from heifer sales.



Item
Cost



Value of heifer at weaning
674.25

Grain, 2550 lbs
163.20

Forage (pasture and hay)
66.66

Veterinary and vaccines
11.48

Breeding fees (semen and synchronization)
32.87

Clean-up bull charge
6.27

Open heifer charge
18.72

Interest on heifer
38.81

Interest on feed
5.11

Labor
40.86

Sale expense
40.00

Total development cost
423.98

Overall costs (includes heifer value @ weaning)
1098.23

Average cost per day
1.08


Source: Dr. Rick Rasby, Professor of Animal Science, Animal Science, University of Nebraska - Lincoln, Lincoln, NE

 

[Caustic Burno]

These heifers are going to die of old age before this board decides to buy them or retain.