When done properly, low-cost production does not have to interfere with production of high-quality cattle.
We hear quite often that the high cost of developing a replacement heifer dictates that we keep as few as possible. We also hear that a cow must wean 4-6 calves before she breaks even. I don’t doubt that, for many, this is true; but it doesn’t have to be.
At the recent Beef Improvement Federation meeting in Lincoln, NE, Rick Funston, a University of Nebraska beef cattle reproductive physiologist, presented research results indicating that, contrary to general belief, heifers don’t need to achieve 65% of expected mature cow body weight to achieve acceptable levels of pregnancy. In fact, the heifers in his study were in the 50-55% range of expected mature cow body weight, and were developed on low-cost feeds.
In Funston’s research and in other places, the cows produced from “minimally” developed heifers are proving to be better cows in their rebreeding rates and calf weaning weights. “Minimal” doesn’t mean they’re underdeveloped or that protein supplementation is unnecessary. The timing of breeding and calving will determine when supplementation is needed to keep heifers gaining weight before breeding and between breeding and calving as a first-calf heifer.
For years, economic research has shown stocker operations to be more profitable than cow-calf operations in most comparisons. If heifers are wintered as stockers, they should be profitable if sold as open stocker heifers.
If the only added cost is to artificially inseminate (AI) them or put bulls in, it may add as much as $60 to each bred heifer. In recent times, a bred heifer would easily bring $60 more than an open feeder heifer. So, in a typical year, the heifer owes you nothing. She’s paid her way and made a profit if you sell her or keep her as a replacement heifer.
The weaned calf crop percentage will be a little lower for the two-year-old heifers than for the mature cows, and the calves will weigh a little less. There will also be a few more open at preg-check time. The heifer will also weigh less as a cull, but the heiferette price will be as much as $10-15/cwt. better than for older culls.
The two-year-old year will cost you a little; but if the heifer is open and you sell her and her calf, she still should have paid her way. If she hasn’t, you should probably consider buying replacement cows – not heifers – from someone who specializes in this, rather than raise your own.
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My point is that a well-run, profitable ranch should be able to cull cows at any age and make a good profit from the cow’s lifetime production when you include her sale weight. The few dry cows that lost calves between pregnancy check and weaning, and didn’t have a calf to sell, will be more than compensated for by the many others that weaned a calf.
Why buy replacement cows?
Why did I suggest buying replacement cows instead of bred heifers? Because two-year olds are less profitable than yearlings or adult cows. If you are buying replacements, why would you want to calve first-calf heifers, rebreed first-calf heifers, and market their smaller calves along with the bigger calves from your mature cows when you could calve and rebreed only cows that require much less attention? You can also buy smaller to moderate-sized cows and terminal cross them all with high-growth, good carcass merit bulls. I think most small ranches should consider this alternative.
When using low-cost heifer development and achieving weights less than 60% of expected mature cow body weight, I like to expose significantly more heifers than needed for replacements. I like short breeding periods – not more than 30 days. I know of a couple of ranches that expose almost all their heifers for one synchronized AI exposure with no cleanup bulls. The ones that get pregnant become their replacement heifers. With short exposure of yearling heifers, the pregnancy rate for two- and three-year olds usually increases in following years.
A larger ranch that uses this approach will usually have more pregnant heifers than needed. It can either sell a few bred heifers or sell some bred cows to make room for the heifers.
On the ranches I managed, where we developed heifers, we usually had significantly more bred heifers than needed. However, we kept the heifers and sold bred cows to ranches that routinely bought replacements and terminal-crossed those cows. By selling a good number of bred cows we were able to compensate for the additional cost of having a higher number of two year olds than normal.
When most people try to do an economic analysis of these kinds of alternatives, they try to estimate the opportunity cost of the retained heifer calf (what could it have been sold for). The problem with this approach is that you must also consider the alternative costs that will occur if you actually do sell the heifer calf.
I prefer to look at three basic alternatives in which I consider my entire cattle operation to be one enterprise. That way, I don’t have to place an opportunity cost on the retained heifer. I simply compare:
- A cow-calf normal replacement heifer operation with
- A cow-calf operation with a high number of replacement heifers and selling some bred cows and
- Buying replacement cows and not raising any replacement heifers.
I’m sure that if you do this analysis correctly, many of you will be very surprised. The results will be different for different sizes of operations and for different feed costs.
You can ignore overhead costs for these comparisons; you simply need to get a gross margin (total livestock sales minus direct cost) for each alternative. The key is to do it correctly.
Sale weights and prices for those weights must be in proper relationship to each other for each situation. You also must adjust cattle numbers so that the total animal units are the same for each alternative.
When comparing alternative stocking strategies, it’s always simpler, and I think more accurate, to have the year beginning and ending inventories equal to each other. After allowing for death loss, you may only project to sell what maintaining that inventory allows. It’s not difficult, but it does take time and care to do it correctly.
Burke Teichert, consultant on strategic planning for ranches, is retired as vice president and general manager of Deseret. He resides in Orem, UT, and can be reached at firstname.lastname@example.org. His comments do not necessarily reflect those of beefmagazine.com or the Penton Farm Progress Group.
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