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Heifer development linked to long-term cow/calf herd profitability

TAGS: Beef
Photo credit Troy Walz. Univ Nebraska three heifers.jpg
Heifer development should be focused on increasing long-term profitability of the cowherd and creating value of the heifer rather than focusing on high yearling pregnancy rates or achieving certain percentage of body weight.
Heifer development should focus on increasing long-term profitability of cow herd rather than on high yearling pregnancy rates or achieving certain growth metrics.

Developing a heifer to replace a cull cow is one of the most expensive management decisions for cow/calf producers, leading to major implications on long-term herd profitability, according to a "Nebraska BeefWatch" post by University of Nebraska-Lincoln beef cattle nutritionist Travis Mulliniks.

Mulliniks said when the decision to develop heifers has been made, the question then becomes: “What is the proper strategy to develop replacements for the cow herd?”

Traditional recommendations suggest that heifers should be managed to reach 65% of their mature bodyweight at breeding to maximize pregnancy rates. In the last several years, multiple studies across differing environmental conditions have shown that heifers can be developed to as low as 48-50% of mature bodyweight with no negative impact on pregnancy rates, he noted, explaining that heifers in these systems are developed at a restricted gain (less than 0.75 lb. per day) while utilizing a compensatory gain or increased gain period at the time of breeding.

For cow/calf operations, maximizing outputs does not necessarily result in maximizing profit, Mulliniks said. Sometimes, the “proper” way to develop heifers disregards her net present value and ability to pay off her investment cost. Just like any capital investment, retained or purchased heifers are only worth the sum of all the income over their lifetime, including salvage value minus production costs that occurred during development, he added.

Mulliniks pointed to a recent study he co-authored -- published in the Journal of Applied Farm Economics -- that compared developing heifers on a low-input, forage-based system versus a high-input drylot system and the impact on profitability of the system over an 11-year life span.

Heifer replacement rate and cow costs were held constant across the heifer development systems. The net present value of heifers developed on a low-input, forage-based system ranged from $264 to $468 per head. Heifers developed in a drylot system had a net present value of a negative $876 per head and were developed to reach 65% of their mature bodyweight, Mulliniks reported.

The breakeven period to pay off heifer development costs was estimated in years of age, and heifers in forage-based systems became profitable at three to four years of age, whereas heifers developed in a drylot were 9-10 years of age before their investment cost was covered, he added.

Altogether, developing heifers in a high-input system increased production risks and decreased long-term profitability. Since cow costs and replacement rates were the same in the study, the only thing that differed was investment or development costs, according to the researcher. Low-input heifer development decreased costs and increased opportunity, which extensive research has indicated will not sacrifice reproductive performance, Mulliniks noted.

With that in mind, Mulliniks said when producers think about heifer development, they may want to consider more than just maximizing pregnancy rates but also increasing the net present value or general value of that heifer. Low-input, cost-effective heifer systems allow for increased marketing flexibility.

In a production system, heifer programs are essentially a stocker operation with multiple end marketing or target options, Mulliniks suggested. Pregnant heifers can be kept as replacements or sold, while the non-pregnant heifers are young enough to be fed for the Choice beef market or kept as yearlings.

Another advantage to low-cost heifer development systems is increased longevity within the cow herd, he noted, adding that profitability and longevity in the herd are directly tied to each other.

In addition, high-input development systems tend to decrease longevity in rangeland production settings, Mulliniks said. In most cow herds, this is largely due to the highest non-pregnant rate occurring in young, two- and three-year-old females that are asked to get pregnant while lactating for the first or second time and still growing themselves, he said. Cost-effective, low-input heifer development systems helps identify sub-fertile heifers early that need additional nutrient resources to make it as a cow and lack the ability to sustain reproductive function under limited nutritional environments.

Mulliniks concluded that heifer development should be focused on increasing the long-term profitability of the cow herd and creating value in the heifer rather than focusing on high yearling pregnancy rates or achieving a certain percentage of bodyweight.

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