I hear it all the time. "I have to raise my own replacements. I can't find the right genetic quality anywhere. I'd expose my herd to all sorts of diseases if I brought them in from somewhere else."
The issues raised may all be fair points, but I become skeptical when hundreds of ranchers cite the unique quality of their herd. Few of those clinging so strongly to the conventional wisdom of raising their own replacements have ever calculated the cost.
Second-calf heifers are the toughest to rebreed on schedule, so it's only fair to calculate the cost of raising her to be confirmed pregnant for the second time. At that point, we can probably assume she'll have similar reproductive rates as our cows.
The cost of raising a replacement to this point changes from one part of the country to another and depends on reproductive rates, land costs and supplementation strategy. But, it often ranges between $800-$1,500! (Call us for a free worksheet to calculate the cost of raising your replacements.)
The Argument Against Heifers
Here's a test. - Which cattle are most likely to have calving difficulties? - Which females are most difficult to rebreed on schedule? - Which cattle are most susceptible to nutritional stress? - Which cattle require the most labor in your herd? - Which segment of the herd has the poorest gross margin?
For 90% of the commercial livestock producers in North America the answers are: 1. heifers; 2. heifers; 3. heifers; 4. heifers; and 5. heifers.
Here's another quiz. What's the biggest cost of keeping a cow? a. Feed b. Land c. Labor d. None of the above
The answer is d, which stands for "depreciation." That isn't true all of the time, but it sure is at this phase of the cattle cycle.
Ironically, many of your neighbors don't even think of cow depreciation as a cost, let alone the biggest cost of keeping cows. In some herds, cow depreciation is more than $200/cow/year.
What does this have to do with replacements? Everything. Replacement heifers usually depreciate faster and more severely than any other beast on the property.
Dairymen figured out a long time ago that they shouldn't take up capacity of their dairies with replacements. Milking cows have high gross margins. Heifers, with lower gross margins, should not be allowed to take up limited capacity that could be occupied by animals with higher gross margins.
You might think this principle is less important in the beef cattle industry. It's not. Many ranchers use up to a third of their capacity, and a disproportionate share of other resources, raising replacements. There has got to be another way.
The most obvious answer is to purchase replacements from others. But, just because that's the most obvious answer doesn't mean it is the best answer, especially now as we approach the peak of the cattle cycle.
The common assumption is that we must purchase replacement heifers. Another often more profitable option is to purchase replacement cows. If your replacement cows start out as someone else's 3- and 4-year-old culls, we not only reduce the cost of replacements, but eliminate cow depreciation as a cost.
Does this mean that commercial producers should never raise their own replacements? Of course not. In some situations raising your own replacements makes sense. The question is, in your operation does it make dollars and sense? It is an economic question for those producers who are ranching for profit.