Replacements, buy em or raise em???

[Stocker Steve]

I believe this "formula" can be used to calculate roughly what heifers cost you to raise. Try it out, put in your numbers from your operation and see what you get.


Ex: If you wean at 8 mo old to sell for $600, and breed that heifer at 18mo, if it cost you $500 a year to raise an animal, that heifer cost you $1350 to raise one heifer, $13,500 to raise the ground to breeding age. ($600 + (1.5 x $500) = $1350)

Where the risk with heifers comes in is if you raised 10 heifers to breeding age and 8 out of 10 bred and were keepers, your cost of replacement heifers just grew. You have to take you total cost, add in what ever you get from the 2 at the auction , and divide that by the remaining keepers

Ex: At first you divided the total, $13,500, between 10 head. If only 8 pan out, you have to take $13,500, add in what ever two heifer bring at the ring (#800x.7)x2=$1120, and divide that between the remaining 8 heifers.

13,500 + $1120 = $14,620 / 8 = $1,827.5

(If you find some thing wrong with this please let me know because I use this ... :lol2: )

OK, I read it three times and did a pencil calculation while watching American Idol:
1) I think you calculated that it costs $500 a year to run a cow/calf pair, but a heifer eats less so it should be closer to $300 per year? Do you have to add in opportunity cost (about (600-500)/2=50)? so about 350?
2) Non breeders happen but they bring in revenue to subtract (not add) from the cost?
3) So the net cost is more like $1,200 each?

 

[S&S Farms]

Another factor for some of us that sell beef to consumers is that there is a value to many customers to being able to say that that animal was born here on my farm. I market my beef as "natural" beef (no hormones nor antibiotics) that I could not in good conscience claim if I bought calves. Some customers like the idea of knowing where their beef came from. If you sell commercially this is not a factor but there is some value to retaining heifers if you sell beef to a certain markets.

My question is do you treat sick calves or just let them waste away. Do you use only antibiotics that are recommended by vet?

Just curious. We also sell locker beef that is implant free, customers are willing to pay for that above the board price. We let customers know that we give responsible care to our animals that sick ones are treated in a safe and legal manner following BQA practices. We just ask do you give antibiotics to your children when they are sick and that is the prescribed treatment. That puts it into a context that most can understand.


Jeff

 

[Brute 23]

OK, I read it three times and did a pencil calculation while watching American Idol:
1) I think you calculated that it costs $500 a year to run a cow/calf pair, but a heifer eats less so it should be closer to $300 per year? Do you have to add in opportunity cost (about (600-500)/2=50)? so about 350?
2) Non breeders happen but they bring in revenue to subtract (not add) from the cost?
3) So the net cost is more like $1,200 each?

1) I said many times to use YOUR #s, its a formula and every thing is a variable that will depend on you operation. (For example, my personal cost is not $500... its about half that.)

Also, I used the cost it takes for some one to raise a cow/ calf pair because if you have never retained heifers before you don't know what it costs. So for calculating purposes if you use what it cost you for cow/ calf pair you should be Ok, because I agree it take quite a bit less to raise heifers. Once you have some experience you can use what it actually cost you to raise heifers and not the cow/ calf expense #.

Not sure what the opportunity cost is that you are talking about? :???:

2) They add what ever they bring when you sell them... but if you have more in them than what they bring... you will lose money.

In my example, the cull heifer cost you $1350 to raise but was sold for $560. You lost $796/ head and $1592 on the two. That loss is calculated in and it divided among the remaining.

 

[grannysoo]

We retain our own. I know that lots of people will disagree with that, but we know where they come from, we know the genetics, we know the tempermant, and that are already trained to the herd and the fencing.

 

[Angus Cowman]

Another factor for some of us that sell beef to consumers is that there is a value to many customers to being able to say that that animal was born here on my farm. I market my beef as "natural" beef (no hormones nor antibiotics) that I could not in good conscience claim if I bought calves. Some customers like the idea of knowing where their beef came from. If you sell commercially this is not a factor but there is some value to retaining heifers if you sell beef to a certain markets.

My question is do you treat sick calves or just let them waste away. Do you use only antibiotics that are recommended by vet?

Just curious. We also sell locker beef that is implant free, customers are willing to pay for that above the board price. We let customers know that we give responsible care to our animals that sick ones are treated in a safe and legal manner following BQA practices. We just ask do you give antibiotics to your children when they are sick and that is the prescribed treatment. That puts it into a context that most can understand.


Jeff

Jeff
Most people I know that raise all natural beef myself included some yrs , use the same antibiotics that everyone else uses if a calf gets sick we just document which calf and what antibiotics and that calf isn't marketed as all natural, an all natural program can use antibiotics it just can't sell an animal that has been Dr'ed as all natural

 

[Brandonm22]

I still prefer raising your own heifers. If you have a set number of cows and you control the genetics brought in via bulls and select cows from your best cow families then over time the quality and productivity of the herd you own should continually be improving. A herd that buys cull cows from the stockyard always has a herd that is the average of their neighbors culls.

 

[Douglas]

Seems to me the math on this is very simple. Ok, it is Labor Day. I have a heifer that is 500 lbs I could sell for $500. I can keep her or sell her and buy another for $500. Whether I keep or buy I have no money either way. All the costs before Labor Day are sunk and irrelevant to the Labor Day decision. If the math is that simple, then this issue is - are my heifer better than the ones I would buy or could I sell mine for more than the cost of the other. What am I missing?

 

[Stocker Steve]

It seems that many unproven bred heifers are overpriced since you can buy bred young cows in the area for less.

I think the better question is what age to buy them at for your operation - - unbred, bred, second calvers, broken mouth...

 

[Douglas]

Seems to me the math on this is very simple. Ok, it is Labor Day. I have a heifer that is 500 lbs I could sell for $500. I can keep her or sell her and buy another for $500. Whether I keep or buy I have no money either way. All the costs before Labor Day are sunk and irrelevant to the Labor Day decision. If the math is that simple, then this issue is - are my heifer better than the ones I would buy or could I sell mine for more than the cost of the other. What am I missing?

Edit: From a tax perspective keeping you own is better. Avoid the income now vs. benefit from the cost of the purchased one sometime down the road. Usually tax savings now are worth more than sometime in the future.

 

[Caustic Burno]

Seems to me the math on this is very simple. Ok, it is Labor Day. I have a heifer that is 500 lbs I could sell for $500. I can keep her or sell her and buy another for $500. Whether I keep or buy I have no money either way. All the costs before Labor Day are sunk and irrelevant to the Labor Day decision. If the math is that simple, then this issue is - are my heifer better than the ones I would buy or could I sell mine for more than the cost of the other. What am I missing?

Edit: From a tax perspective keeping you own is better. Avoid the income now vs. benefit from the cost of the purchased one sometime down the road. Usually tax savings now are worth more than sometime in the future.

Buying or retaining to save pennies on the dollars spent is a recipe to loose money.
It is about a employee returning income and the cost to keep the employee(cow) not the savings on an employee not returning income. Would you put your dollars in the bank to spend it to save pennies on taxes or would you rather pay taxes on income. I want to pay taxes on income because I have more money in the bank at the end of the year.
To many Cattlemen fall into the trap of saving taxes on write offs this is on capital spent.
I never want to save pennies on spending I want to pay on dollars of income recieved.
You will never maintain a profitable operation operating under the philosphy to write off spending.

 

[Douglas]

Seems to me the math on this is very simple. Ok, it is Labor Day. I have a heifer that is 500 lbs I could sell for $500. I can keep her or sell her and buy another for $500. Whether I keep or buy I have no money either way. All the costs before Labor Day are sunk and irrelevant to the Labor Day decision. If the math is that simple, then this issue is - are my heifer better than the ones I would buy or could I sell mine for more than the cost of the other. What am I missing?

Edit: From a tax perspective keeping you own is better. Avoid the income now vs. benefit from the cost of the purchased one sometime down the road. Usually tax savings now are worth more than sometime in the future.

Buying or retaining to save pennies on the dollars spent is a recipe to loose money.
It is about a employee returning income and the cost to keep the employee(cow) not the savings on an employee not returning income. Would you put your dollars in the bank to spend it to save pennies on taxes or would you rather pay taxes on income. I want to pay taxes on income because I have more money in the bank at the end of the year.
To many Cattlemen fall into the trap of saving taxes on write offs this is on capital spent.
I never want to save pennies on spending I want to pay on dollars of income recieved.
You will never maintain a profitable operation operating under the philosphy to write off spending.

I mentioned the tax issue just because it was brought up in earlier in the thread that somehow buying was better tax wise than retaining and it is not.

 

[SRBeef]

Another factor for some of us that sell beef to consumers is that there is a value to many customers to being able to say that that animal was born here on my farm. I market my beef as "natural" beef (no hormones nor antibiotics) that I could not in good conscience claim if I bought calves. Some customers like the idea of knowing where their beef came from. If you sell commercially this is not a factor but there is some value to retaining heifers if you sell beef to a certain markets.

My question is do you treat sick calves or just let them waste away. Do you use only antibiotics that are recommended by vet?

Just curious. We also sell locker beef that is implant free, customers are willing to pay for that above the board price. We let customers know that we give responsible care to our animals that sick ones are treated in a safe and legal manner following BQA practices. We just ask do you give antibiotics to your children when they are sick and that is the prescribed treatment. That puts it into a context that most can understand.

Jeff

Of course if I had a sick calf or cow I would treat them as my vet would prescribe. No cattleman should ever knowingly let a sick animal go untreated. I have seen "organic" operations where it looks like half the herd needs something - runny noses, pinkeye, etc. I don't think "organic" is really applicable to beef as it may be to field crops. We immunize our kids and should our animals also in my opinion.

I have the vet out twice a year. Once in the summer for knife castration, immunizations and worming, in the fall for preg check, boosters and worming. Animals scheduled for processing skip the last booster & wormer. In the couple years I have been doing this, so far we have not had any need for antibiotics. There will probably come a time when there is a problem but so far, so good. In general, this no hormone/no anti biotics, mostly grassfed/grazed is termed "natural" beef. It does not qualify as "organic".

If antibiotics are required they will be used I would just market that calf in another way. This herd health is one reason to keep replacements. Anytime you bring animals in from outside there is a risk of bringing in something which will need some antibiotics and shoot my system.

 

[Brute 23]

We immunize our kids and should our animals also in my opinion.

:shock:

 

[Angus Cowman]

[ In general, this no hormone/no anti biotics, mostly grassfed/grazed is termed "natural" beef.

Actually SR "All Natural" doesn't mean anything about how much feed they get versus how much grazing they do
All of My All Natural Calves go to feedlots just like the regular calves
The guidelines for All Natural is no hormones, and no growth inhibitors in the feed(such as bovitec or rumensin) and NO antibiotics
Vaccines and wormers are approved

 

[Rod]

I lean more towards replacement pairs. You pretty much know what you're getting. A cow thats had a calf, you can evaluate her bag and milk and her maternal traits. It cost more up front but you dont get the surprises that you get with hiefers and you've got a return in 6 months verses 3 years.

 

[Wewild]

We retain our own. I know that lots of people will disagree with that, but we know where they come from, we know the genetics, we know the tempermant, and that are already trained to the herd and the fencing.

We do as well for some of the same reasons and the heath issue. I have seen mothers and daughters even seem to stick together in the pens and into the chutes.

We got a few places that ain't much good for cow calf operations except for heifer pastures.

 

[Brute 23]

We got a few places that ain't much good for cow calf operations except for heifer pastures.

Same here, especially places that are near or in town.