Having suitable replacement heifers is vital for the long-term profitability of any ranch. It is necessary to be able to rotate the breeding stock out to improve the overall genetic gene pool. Also, cows will get to a point where they will be too old to breed anymore. When this happens, you must have new stock ready to take their place.
When it comes to having replacement heifers, there are two ways you can go: buy or raise them. Most producers tend to grow their own, but buying them can also be an option. When it comes to deciding which to go with, like with any choice, it is crucial to weigh the pros and cons to determine which is best for your situation.
Selecting the most economical source for your replacement heifers is vital to you. There is no point in going with an option that will only cost you more money in the long run. One of the first things you must do is look at your current facilities. Here are some things that you can look at when deciding on either to buy or raise:
Factors to consider
No matter which way you end up choosing, there are some factors to consider in your decision
- Money available
- you will need to look at the money you have available for any purchases. This availability can be money that you have in the bank. Also, any potential loans (though they may not be the best choice) you may be able to get
- Feed costs
- As with any option where you are increasing the number of cattle that will be in your place, you need to decide if you can even afford to feed them. Understanding your feed costs is vital when facing drought conditions like we often have to deal with.
- Labor availability
- You must decide if you even have the workforce to handle any new cattle in your place. This labor increase can be either increased feeding or simply hauling them to your place. Naturally, raising replacement heifers will be more labor-intensive for you than just buying them.
- Cattle prices
- This factor goes hand in hand with the money available part of this list. However, it deserves to have its own section here. When deciding on either buying or raising, you must consider whether you can even afford the price to pay for them. When looking at the costs, you must look at the total costs (feed, vaccines, etc.), not just the initial market costs.
- Reproductive rates
- You will also want to look at the potential reproductive rates of any replacement heifers. One way to do this is to look at their mother’s performance to gauge her potential.
Raising Replacement heifers
Now that we have gone over some things you should consider when making this decision, we can review the pros and cons of either choice. Let us begin with the raising option:
Advantages
The first advantage is that you will have more control over certain factors that are going into your herd. These factors can include things like the overall improvement of genetics in your cow herd.
Since you will be raising them from birth, you will also be able to know all the diseases that your heifers have been exposed to. This knowledge will be necessary so that your cows won’t run the risk of getting some disease that could severely cripple your operation.
Another advantage is that raising them rather than buying them can cost less. It is for this reason that most people tend to raise them. While this may not be true for every operation, it could be for what you are needing.
Disadvantages
A disadvantage of raising replacement heifers is that it is more of a long-term investment than just buying what you need. Looking at the productivity cycle of cattle, it can be at least two years before you start to see any return on the feed or other costs it took to raise them. Since it is a more prolonged investment, it is harder to make any adjustments based on changing market conditions.
Buying replacement heifers
And now let us look at the advantages and disadvantages of buying your replacement heifers.
Advantages
Since you will not be raising them from birth, it can free up resources typically needed to raise them to do other things. This freeing up of resources can benefit smaller types of operations that have few resources at their disposal.
Another advantage is that you can control how many replacement heifers you will have; you can expand or decrease the size of your potential herd in less time in response to conditions. A producer can use this fluidity to take advantage of good grass growth or drought conditions.
Disadvantages
Depending on the market, it can cost more to buy rather than raise the heifers you will need. This potential cost will mean that you will need to pay attention to current prices. Also, you will need to keep an eye on what the futures market could look like.
Making the decision
As I mentioned several times in other posts, there is never a “one-size-fits-all” answer regarding cattle operations. You will need to look at all of the available factors and make the decision that works best for you.
The things that you will need to look at are your budget, your overall goals, and even the cattle market itself. Now, when you look at your budget, it will be in your best interest to look at what it actually is and not what you hope it is. When deciding on something that can affect your place for years to come, looking at things through an “idealized world” type of mindset is not a good idea. It would be best to consider this an investment, so make a wise choice here.
Suppose you are looking for ideas on how to make a decision on this subject. In that case, Iowa State has a couple of spreadsheet examples that can give you some ideas. They have examples for if you want to buy and ones if you want to raise your replacement heifers.
Crunching the numbers
When looking at the numbers, you should look at the most probable scenarios that will likely occur during heifer development. Once you have an idea of the net return, you can weigh it against the potential risk you may face with the option you choose.
Some variables will be complex for you to predict, but they are still important. These things are for you to anticipate in order to make an informed financial decision. Things like the sale price of heifer calves, feed costs, and production performance of purchased vs raised heifers. Now, as far as feed costs are concerned, if you buy a lot throughout the year, you may be able to lock in prices. A producer can do this price lock for the contract year, but it is more of an option for larger operations.
Though you may not be able to predict some of these prices accurately, you can get a reasonably accurate guess. This correct guess is where paying attention to the overall trend and even your own intuition can come into play. If you are unsure, I recommend visiting your local beef extension specialist. A feed nutritionist and your local veterinarian are also good options. Other local ranchers that you may know can also be valuable resources.
If you would like to read more about how to develop your heifers, I went over that in a previous post, “Heifer Development 101”.
