What’s a bred heifer worth?

 by Nevil Speer via Beef Magazine

A Handbook for Ranch Managers Cow costs loom large in figuring the value of bred heifers.

Profitability is an enduring challenge, even in the best of markets. Meanwhile, the cow-calf sector appears poised for a second straight year of Planned Grazing: A Study Guide and Reference Manual rebuilding following higher feeder cattle prices and better feed conditions across most of the country during the past several years. The primary question now concerns the duration and extent of the rebuilding effort in the years to come.

Environmental & Natural Resource Economics: The Austrian ViewFor the meantime, though, it appears that producers are fairly confident about the future. Rebuilding signals are coming from both reduced cow culling and increased heifer retention. Keeping or purchasing heifers represents a very different risk decision because of the longer payoff from the investment.

replacement heifer value

Accordingly, this week’s illustration features varying net present value (NPV) for a replacement heifer based on different cow costs and the number of calves marketed over the heifer’s lifetime. Several other considerations, not shown here, also impact NPV including projected market value of both calves and cull cows.Nevertheless, the figure underscores the importance of knowing and managing cow costs when it comes to raising or purchasing replacement heifers and avoiding an unfavorable decision. The difference across the various cost categories is substantial! Where would your operation be in terms of annual costs?  Subsequently, are you valuing replacement heifers correctly?  What do you perceive as the largest challenge in making replacement heifers profitable over their lifetime?

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About Land & Livestock Interntional, Inc.

Land and Livestock International, Inc. is a leading agribusiness management firm providing a complete line of services to the range livestock industry. We believe that private property is the foundation of America. Private property and free markets go hand in hand—without property there is no freedom. We also believe that free markets, not government intervention, hold the key to natural resource conservation and environmental preservation. No government bureaucrat can (or will) understand and treat the land with as much respect as its owner. The bureaucrat simply does not have the same motives as does the owner of a capital interest in the property. Our specialty is the working livestock ranch simply because there are so many very good reasons for owning such a property. We provide educational, management and consulting services with a focus on ecologically and financially sustainable land management that will enhance natural processes (water and mineral cycles, energy flow and community dynamics) while enhancing profits and steadily building wealth.
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