Considerations for Raising Versus Purchasing Replacement Heifers

by Macey Mueller for the Red Angus Magazine

The ongoing drought widely affecting the U.S. Plains and western half of the country has drastically limited feed and forage supplies, subsequently increasing input costs and forcing many producers to liquidate some, or all of their cattle. As of mid-February, U.S. drought monitors indicated more than 41% of the lower 48 states were still affected by the lack of adequate moisture, and as a result, U.S. Department of Agriculture data shows the U.S. beef cow herd dropped to 28.9 million beef cows as of Jan. 1 – its lowest level since 1962.

According to a report by Lance Zimmerman, Rabo AgriFinance senior beef analyst, “meaningful progress in rebuilding the nation’s cow herd will not come until 2025 at the earliest,” meaning many of the initially needed replacement heifers are hitting the ground this spring.

Zimmerman’s report goes on to say “cow-calf producers will be tasked with building a more economically viable herd as outside demands on production agriculture intensify,” which should have some producers questioning their decision to raise or purchase the replacements necessary in the rebuilding process.

There are advantages to both buying and developing replacement heifers. Purchasing outside females allows a producer to continue adding maternal characteristics while using high-quality terminal sires in their herd. On the other hand, developing replacement heifers gives a producer more control over the genetics in the herd and allows them to retain females that best fit their environment.

The decision whether or not to raise replacements comes down to available management resources to properly select, wean, develop and calve replacement heifers and, of course, the economics – winter feed costs, opportunity cost of the heifer and breeding costs. Raising replacement heifers is widely acknowledged as one of the costliest activities, yet one of the most important investment activities for a cowcalf producer.

A good decision-making starting point is herd size. According to research from Jim McGrann, professor emeritus in the department of agricultural economics at Texas A&M University, if a producer owns fewer than 200 cows, purchasing bred heifers is usually a better economic alternative. To help producers understand the risks and opportunities associated with developing heifers in their own operations, TAMU has developed a replacement heifer budget (agecoext.tamu.edu/resources/decisionaids/beef/) that calculates total production costs and return on investment to evaluate production, breeding systems and pricing and marketing alternatives.

In his role as an Extension beef reproduction specialist with the University of Nebraska-Lincoln, Rick Funston, Ph.D., has extensively researched strategies to cost effectively develop replacement heifers. He said producers interested in raising their own replacements should consider employing a systems approach that utilizes feed resources heifers will be expected to consume as mature cows. He added that increased feed costs have negatively impacted heifer development protocols that rely heavily on harvested feeds.