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Should I buy or raise replacement heifers?

Having the right replacement heifers is important 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 and no longer be profitable. When this happens you will need to have new stock ready to take their place.

When it comes to having replacement heifers there are 2 ways you can go: buy or raise them. Most producers tend to raise their own but buying them can also be an option. When it comes to deciding which to go with, like with any options, it is important to weigh the pros and cons to determine which is best for your situation.

Selecting the most economical source for your replacement heifers is of vital importance for you. There is no point in going with an option that will only cost you more money in the long run. 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

Raising Replacement heifers

Now that we have gone over some things that you should consider when making this decision we can now go over 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. This 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 what all diseases that your heifers have been exposed to. This will be important so that your cows won’t run the risk of getting some disease that could severely cripple your operation.

Another advantage is that it can cost less to raise them over buying them. 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 long-term investment over just buying what you need. Looking at the productivity cycle of cattle it can be at least 2 years before you start to see any return on the feed or other costs it took to raise them. Since it is a longer investment it is harder to make any adjustments based on any changing market conditions.

Buying replacement heifers

Advantages

Since you will not be raising them from birth it can free up resources that would normally be needed to raise them to do other things. This can be of benefit for smaller types of operations that do not have a large number of 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. This can be used to take advantage of either good grass growth or possibly drought conditions.

Disadvantages

Depending on how the market is looking it can cost more to buy rather than raise the heifers that you will need. This will mean that you will need to pay attention to how prices currently are. Also, you will need to keep an eye on what the futures market could also look like.

Making the decision

As I mentioned several times before in other posts there is never a ‘one-size-fits-all” answer when it comes to cattle operations. What you will need to do is to look at all of the factors that are available 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 I will say that 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 making a decision on something that can affect your place for years to come it is not a good idea to look at things through an “idealized world” type of mindset.

If you are looking for ideas of how to make a decision on this subject Iowa state has a couple of spreadsheet examples that can give you some ideas. They have examples for if you are wanting to buy and ones if you are wanting to raise your replacement heifers.

Crunching the numbers

When looking at the numbers you will want to look at the most likely scenarios that are most likely to occur during heifer development. Once you have an idea of what the net return will be you can then weigh it against the potential risk that you may face with the option you choose.

There are some variables that will be hard for you to predict but they are still important. These things are for you to try to predict 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 end up purchasing a lot throughout the year you may be able to lock in prices. This can be done for the contract year but it is more an option for larger operations.

Though you may not be able to accurately predict some of these prices you can get a fairly accurate guess. This is where paying attention to the overall trend and even your own intuition can come into play. If you are not sure I would recommend visiting with your local beef extension specialist, feed nutritionist, as well as your local veterinarian.

If you are wanting to read more about how to develop your heifers I went over that in a previous post “Heifer Development 101”.

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