The beef cow herd is at the lowest level since 1963, and the heifers are going to the feed yard at a rate that does not support herd expansion. Several factors around the country are contributing to the further decline in the cow herd. The rate of decline may have slowed due to lower culling activity on a national basis, but drought conditions in some parts of the country are sending cows to the sale barn. In the Midwest and Southeast producers are dealing with reduced pasture availability due to competition for crop ground. In addition, some heifers that were held back for replacement may have been sold due to tight cash flow as the result of a slow start to the grazing season which resulted in unplanned hay purchases. What will be the determining factor for when the herd begins to expand? Cash flow and forage availability will be short term factors to consider. However, the decision to retain heifers as replacements needs to consider the long term demand for breeding stock and feeder cattle. If the feeder cattle market stays strong and the cow herd continues to decline, those who decide to retain heifers this year should be very well rewarded for the decision.
Areas that have available grass have a distinct advantage in the cost to raise replacement heifers. Raising heifers on pasture and a low cost per head per day supplement such as Iono-Lyx® B300 is a proven system. In areas of reduced pasture availability, some producers are taking a new look at rotational grazing and various low moisture block supplement strategies to maximize pasture utilization. Efforts to extend the grazing season by 2 to 3 weeks will have a significant economical impact.
In areas where pasture availability is a concern, some operations are considering a dry lot feeding program for all or part of the replacements. This option will be more expensive due to increased use of stored forage, but can be a viable option if total cost is controlled. The cost can be minimized if consideration is given to ways to reduce the total labor and equipment cost associated with dry lot feeding. A common assumption is a tractor and feed wagon will be utilized every day. Using the Crystal Clear Economyx® tool, I entered a conservative tractor value of $100,000 and feeder wagon cost at $30,000 and contributed 25% of that expense to the heifer feeding program. Fuel and operating cost of the tractor was estimated at $0.40 per hour. Feeding every day with 1 hours of tractor time resulted in estimated yearly cost for the wagon of $50 per head and tractor/fuel cost of $164 per head. Nutritionally we don’t need to feed replacement heifers like feed lot steers, and mechanically we don’t need to feed replacement heifers like steers. A dry lot feeding program for replacement can be profitable if the equipment and fuel cost can be minimized.
What factors are you considering in your decision to retain or not retain heifers?