To keep heifers back or not?

[BACattle]

Hello All,

We have just started a small operation. We have 18 bred cows. We intend to run a cow/calf operation. What me and my partner have been going back and forth about is whether to keep any of the heifers. (if they look like they'd be decent). He contends that it'd be better to sell them and buy bred cows next year instead of dealing with the entire 1st calf heifer issue. Was just curious what you fellers thought about it.

Thank you.

 

[Kscattle]

To each his own but I keep hfrs every year, my granpa said long ago that the best cows you'll ever get will come from your own herd. I would get a few yrs under your belt and get a feel for calving before you try and calve 8-10 hfrs though. Keep the best, biggest and most docile hfrs at weaning time and you will see a difference after a few years. Trade bulls every two years and always get a low bw bull, a good bulls genetics will go a long way! Just my two cents

 

[Bigfoot]

Probably good and bad to both. I usually keep 10 percent of my hiefers for replacements. By the time I cull cows herd number usually stays steady.

 

[JSCATTLE]

Until you get your herd built up I would buy bred cows . It takes 2 and a half years to sell a calf from a heifer . I also save 10 percent of my hiefers to replace cows with . But I am at max animal units on my Land . Jmo

 

[user1]

The way I look at it is if they aren't good enough to put in my cowherd then what am I doing raising cattle. If the heifers aren't good enough to be a keeper are the steers good enough?

 

[highgrit]

When I look at cattle for sale I ask myself. Why are they for sale? I like to raise heifers out of my own stock. You don't have as much to go wrong in my mind.

 

[wbvs58]

If you live on the same place as the cattle, heifers would be ok. If they are a bit of travelling away from you then older cows may be a better option.
Ken

 

[Caustic Burno]

Hello All,

We have just started a small operation. We have 18 bred cows. We intend to run a cow/calf operation. What me and my partner have been going back and forth about is whether to keep any of the heifers. (if they look like they'd be decent). He contends that it'd be better to sell them and buy bred cows next year instead of dealing with the entire 1st calf heifer issue. Was just curious what you fellers thought about it.

Thank you.

IMO it makes no sense to retain heifers in a commercial operation. They are very costly and are a crap shoot.
I have increased input cost by retaining a cow that will not return to the bottom line for two and half years as well as the dam has not returned anything to the bottom line for two years. If the heifer dies you can not write her off as a retained heifer has no value other than your input cost. You can buy a heavy that will go into production now and returning to the bottom line, as well as the write off/ depreciation value.

 

[ANAZAZI]

IMO it makes no sense to retain heifers in a commercial operation. They are very costly and are a crap shoot.
I have increased input cost by retaining a cow that will not return to the bottom line for two and half years as well as the dam has not returned anything to the bottom line for two years. If the heifer dies you can not write her off as a retained heifer has no value other than your input cost. You can buy a heavy that will go into production now and returning to the bottom line, as well as the write off/ depreciation value.

I have read this reasoning many times CB, and each time I think it is flawed in a way.
First, the writing off lost cattle deal is probably right, different tax laws in different countries I guess.
(Although it is only logical that a half grown lost heifer have did cost less to raise than a full grown lost heifer, and that the actual input costs mirrors her actual value quite good. This means that for me there is not much difference, except for the possibility that a lost retained heifer was worth more than what was put into her. But no that would mean it is possible to earn money raising a heifer! :hide: )

If the normal age to sell a weaned heifer calf is half a year and calving age is two years, this means actual waiting time for the heifer to start contributing is two years not two and a half year.

As for the dam not producing for two years, well wrong. When one retains a heifer calf, this hurts the cash flow that year, but not the next year when the dam can bring money again simply because the younger sister or brother of the retained heifer can be sold. So one year, not two years.

And while a growing heifer is not contributing to cash flow, she still makes money, simply by putting on pounds, and by the time she calves she will be worth roughly the same money as a cow.

Now, what I do when I retain replacements, I replace some other animal with them. That animal, (an older cow or unworthy first calver for example) will contribute to cash flow, will it not?
:2cents:

And a post script; the late scroote thinks that you and I are the same person, it is a shame we shall have to disagree with each other. :banana: :banana: :banana:

 

[Kscattle]

IMO it makes no sense to retain heifers in a commercial operation. They are very costly and are a crap shoot.
I have increased input cost by retaining a cow that will not return to the bottom line for two and half years as well as the dam has not returned anything to the bottom line for two years. If the heifer dies you can not write her off as a retained heifer has no value other than your input cost. You can buy a heavy that will go into production now and returning to the bottom line, as well as the write off/ depreciation value.

I have read this reasoning many times CB, and each time I think it is flawed in a way.
First, the writing off lost cattle deal is probably right, different tax laws in different countries I guess.
(Although it is logical that a half grown lost heifer have did cost less to raise than a full grown lost heifer, and that the actual input costs mirrors her actual value quite good. This means that for me there is not much difference, except for the possibility that a lost retained heifer was worth more than what was put into her. But no that would mean it is possible to earn money raising a heifer! :hide: )

If the normal age to sell a weaned heifer calf is half a year and calving age is two years, this means actual waiting time for the heifer to start contributing is two years not two and a half year.

As for the dam not producing for two years, well wrong. When one retains a heifer calf, this hurts the cash flow that year, but not the next year when the dam can bring money again simply because the younger sister or brother of the retained heifer can be sold. So one year, not two years.

And while a growing heifer is not contributing to cash flow, she still makes money, simply by putting on pounds, and by the time she calves she will be worth roughly the same money as a cow.

Now, what I do when I retain replacements, I replace some other animal with them. That animal, (an older cow or unworthy first calver for example) will contribute to cash flow, will it not?
:2cents:

And a post script; the late scroote thinks that you and I are the same person, it is a shame we shall have to disagree! :banana: :banana: :banana:

I agree with this theory and wanted to add that if you retain hfrs every year and sell older cows you are able to retain a younger, genetically better herd. When you sell older cows you normally generate more revenue than if you would have selling a fat heifer

 

[dun]

I see it as a wash in the short term but long term retaining heifers I see as preferable because those retained heifers will generally stick around in the herd longer then the bought in cows.
But it probably boils down to Ford or chevy

 

[TennesseeTuxedo]

Or Dodge?

 

[ANAZAZI]

volvo

 

[Galloways1]

We raise registered cattle, so keeping replacements is a must. Replacement heifers are also a large part of our cashflow.

We also have commercial cattle, a keep replacements as well.

I can see where some commercial operations would chose to sell entire calf crops. A terminal, high growth bull can be used, to produce pounds to sell. If the type of cow that works for that operation is readily availalbe, then buying replacement breds would be an easy decision. As long as there are some breeders still breeding for maternal cattle, there will be a supply.

 

[Caustic Burno]

IMO it makes no sense to retain heifers in a commercial operation. They are very costly and are a crap shoot.
I have increased input cost by retaining a cow that will not return to the bottom line for two and half years as well as the dam has not returned anything to the bottom line for two years. If the heifer dies you can not write her off as a retained heifer has no value other than your input cost. You can buy a heavy that will go into production now and returning to the bottom line, as well as the write off/ depreciation value.

I have read this reasoning many times CB, and each time I think it is flawed in a way.
First, the writing off lost cattle deal is probably right, different tax laws in different countries I guess.
(Although it is only logical that a half grown lost heifer have did cost less to raise than a full grown lost heifer, and that the actual input costs mirrors her actual value quite good. This means that for me there is not much difference, except for the possibility that a lost retained heifer was worth more than what was put into her. But no that would mean it is possible to earn money raising a heifer! :hide: )

If the normal age to sell a weaned heifer calf is half a year and calving age is two years, this means actual waiting time for the heifer to start contributing is two years not two and a half year.

As for the dam not producing for two years, well wrong. When one retains a heifer calf, this hurts the cash flow that year, but not the next year when the dam can bring money again simply because the younger sister or brother of the retained heifer can be sold. So one year, not two years.

And while a growing heifer is not contributing to cash flow, she still makes money, simply by putting on pounds, and by the time she calves she will be worth roughly the same money as a cow.

Now, what I do when I retain replacements, I replace some other animal with them. That animal, (an older cow or unworthy first calver for example) will contribute to cash flow, will it not?
:2cents:

And a post script; the late scroote thinks that you and I are the same person, it is a shame we shall have to disagree with each other. :banana: :banana: :banana:

You feed the dam and heifer for two years and they generated nothing to the bottom line zilch zero .
At a 1.50 a day upkeep roughly you have sunk 1800 to 2000 in the retained heifer. You have upkept the Dam for 730 days with no generation of income. Wean the heifer at 205 day's now she is no longer riding the cow's train and is costing a 1.50 a day. You carry her another 7 months before breeding another 283 day's before a calf maybe, it is a heifer.
The heifer has no value to the IRS if she fall's over dead, the purchased cow does as well as her input cost.
This is like buying insurance versus driving uninsured. It is an absolutely loss to retain a heifer other than for genetic's.
When you get to the point my genetic's are the best you have become pasture blind.

 

[TennesseeTuxedo]

What if your operation was big enough and you ran separate herds you could also theoretically run separate books and treat each herd as its own business so you could sell heifers from one company (herd) to the other thereby gaining the potential for the tax loss benefit you mention Caustic.

Just a thought.

 

[ANAZAZI]

You feed the dam and heifer for two years and they generated nothing to the bottom line zilch zero .
At a 1.50 a day upkeep roughly you have sunk 1800 to 2000 in the retained heifer. You have upkept the Dam for 730 days with no generation of income. Wean the heifer at 205 day's now she is no longer riding the cow's train and is costing a 1.50 a day. You carry her another 7 months before breeding another 283 day's before a calf maybe, it is a heifer.
The heifer has no value to the IRS if she fall's over dead, the purchased cow does as well as her input cost.
This is like buying insurance versus driving uninsured. It is an absolutely loss to retain a heifer other than for genetic's.

I will try again.
If one of the purchased cows fall over dead, the tax write off is what one payed for her.

If one of the home raised cows fall over dead, one already payed her by paying what it costs to raise her, and this cost has already made a tax write off.

Is tax not payed upon income minus write off? :compute:

 

[angus9259]

You feed the dam and heifer for two years and they generated nothing to the bottom line zilch zero .
At a 1.50 a day upkeep roughly you have sunk 1800 to 2000 in the retained heifer. You have upkept the Dam for 730 days with no generation of income. Wean the heifer at 205 day's now she is no longer riding the cow's train and is costing a 1.50 a day. You carry her another 7 months before breeding another 283 day's before a calf maybe, it is a heifer.
The heifer has no value to the IRS if she fall's over dead, the purchased cow does as well as her input cost.
This is like buying insurance versus driving uninsured. It is an absolutely loss to retain a heifer other than for genetic's.

I will try again.
If one of the purchased cows fall over dead, the tax write off is what one payed for her.

If one of the home raised cows fall over dead, one already payed her by paying what it costs to raise her, and this cost has already made a tax write off.

Is tax not payed upon income minus write off? :compute:

Mathematically, you are correct. But there are some new tax laws / incentives right now that incentivize purchases (economic stimulus at work???). So if you buy a heifer (even a young one) or bull for purposes of enlisting in your breeding stock I do believe there are some present advantages that don't exist if you raise your own. But I'm not an accountant. Animals purchased for breeding are treated different than animals purchased for resale....I know I have to split them out differently for my accountant. :roll:

 

[ANAZAZI]

You feed the dam and heifer for two years and they generated nothing to the bottom line zilch zero .
At a 1.50 a day upkeep roughly you have sunk 1800 to 2000 in the retained heifer. You have upkept the Dam for 730 days with no generation of income. Wean the heifer at 205 day's now she is no longer riding the cow's train and is costing a 1.50 a day. You carry her another 7 months before breeding another 283 day's before a calf maybe, it is a heifer.

Let us assume that the retained heifer is worth $X; two years pass and she weans her first calf, that happens to sell for $X. I am aware that the first calf usually weighs less, but ignore this to make it easier to count. We take both calves out of the equation; one replacing the other.
One feeds the retained heifer for two years at your price of 1,50 dollars per day x 730 days equals $1095. Because she is a replacement heifer, she replaces a cull cow, that is sold at some cull price.
The new cow is also worth more than a cull because she is still functioning. There lies the only cost, the difference between a functional new cow and a cull cow.

Meanwhile the retained heifer calf is payed for at weaning by its own first calf two years later, so the dam costs nothing in upkeep that first year. The next year the dam weans a calf and when it is sold it pays her upkeep for the second year too. Savvy?

 

[Dave]

I believe that both sides of this discussion have merit. I generally by cows, many of them short term cows, but occasionally I keep heifers back. Without a doubt the best cows in my pasture are ones that I raised as heifers. But I am also sure that I make more money on those short term cows.
Last fall I got $770 average for my weaned heifer calves. The last couple months I have bought 19 cows total. Most of them older cows but there are a couple heifers included in those purchased cows. I have an average of $836 into those cows. The majority of them have calves on the ground now. Just wintering those heifers I would have a lot more than $836 into them and I would still be a year away from any calves being born. When I wean calves this fall probably 12-15 of those cows will go to town.
To me the time to keep heifers is when the market is down. At that point they aren't worth as much and thus you have less into them.
Another option is to keep all of your heifers and breed them all. I know several guys who do this. They then use different criteria to select the ones they want to keep and sell the rest as bred heifers. That would certainly have worked good this year with the price of bred heifers.