Replacement heifers: What is the return on investment?

For whatever reason, it is more common to hear about break-even points. We say things like, “You don't break even on a heifer until she weans her fifth calf.” Those rules of thumb can be helpful. But at the end of the day, do you really want to break even? Whether purchased or developed on the farm, replacement heifers are an investment. So let’s talk about ROI.

Jordan Thomas

Assistant Professor and Cow-Calf Extension Specialist / University of Missouri

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Calculating ROI for an individual heifer is actually pretty challenging. We don’t know the ROI of a heifer until the end of her productive lifespan when she has weaned her last calf. It’s also hard to track expenses and account them to individual animals. How much of the revenue from the sale of her calf was actually profit? How much just covered feed and other costs of maintaining cows? I am not going to walk through a financial calculation; I am not an economist. Instead, let's talk about the science. How do you set up a heifer for maximum ROI?

The returns

By far, the biggest factor influencing the profitability of a heifer is how long she remains in the herd. We want a cow to wean a calf every year and go as many years as possible without coming up open at preg check. A big driver here is managing cows to calve early. A cow that calves late in the calving season simply has fewer chances to conceive in the next breeding season.

It sounds simple, but if you start a heifer off as a late-calver, you will find she leaves the herd after just a couple of seasons. Start her off as an early-calver, and her likelihood of staying around in the herd is much higher. Published data supports this: Heifers that become pregnant early in their first breeding season remain in the herd longer and wean more calves. They even wean heavier calves every year, since their calves are older at weaning.

The investment

Basic math might make you think you want the lowest heifer development cost possible, but be cautious here. Heifer development should not be a race to the bottom for the lowest cost of production. Wise business people are thinking about total returns, not just costs.

Nutritional development of heifers is critical. Develop heifers to 55 to 65 percent of the mature weight of cows by the start of the breeding season. And note that nutritional development of heifers does not just stop at the end of the breeding season. Heifers should be developed to approximately 85 percent of mature bodyweight by calving and should calve at body condition score 6. This is an investment you don't want to skimp on. Nursing her first calf, rebreeding in her second breeding season and still growing to mature size is already plenty to ask of your first-calf heifers.

There are, however, some very logical opportunities to cut costs. First, how many heifers are you attempting to develop? Unless you have very low development costs and a good market to sell late-bred heifers, be strict about which calves are retained as replacement candidates. Typically, I find producers are too lenient. Later born heifers are more likely to be later conceiving. Try to only keep heifers born in the first half of the calving season. Heifers born after that time are already behind and are arguably out of your less fertile, later conceiving cows. Limiting the number of heifer calves entering the development phase is a key part of keeping your overall cost of heifer development low.

Jordan Thomas explains why heifers born early in the season are a better investment in the video below:

Pre-breeding evaluation of heifers is another opportunity to weed out heifers that have no business entering a breeding program. Pelvic measurements can screen out abnormal heifers that would have calving difficulty. Reproductive tract scoring can allow you to screen out heifers with abnormal or immature reproductive tracts. This is a big opportunity to cull some underperforming heifers before investing in additional feed and breeding costs.

Make the investment to get heifers pregnant early in the breeding season though. Progressive beef producers now recognize the clear advantages of using estrus synchronization and A.I. Not only can you get a large proportion of your heifers pregnant early in the breeding season, but you can use an elite sire at an extremely affordable cost. It is also time to recognize the value of A.I. in your mature cow herd to produce better replacement heifer candidates. The EPDs of those elite A.I. sires can be in the top percentile rankings of the breed, and now you can retain those genetics around in your herd. The accuracy of EPDs is typically higher for A.I. sires as well, so you also have more confidence about their true genetic merit. Building up the genetic quality of your heifers means adding value to your calves.

Purchasing replacement heifers

If you are purchasing bred replacement heifers rather than developing your own, many of the same considerations apply. Buy heifers that will calve as early as possible in your calving season. But also try to find high-information heifers. There is a big difference between a heifer marketed as "Bred P3" and one marketed as A.I.-sired, genomic-tested, bred to a high-accuracy, calving-ease A.I. sire, with a known calving date and known fetal sex.

Final thoughts

Think in the long term when selecting and developing replacement heifers. There are smart ways to cut heifer development costs, but make the investment to get heifers pregnant early in their first breeding season. Acronyms and initials like ROI might seem silly, but think about your heifers in those terms. If you don't, there might be sillier sets of letters used to describe your operation: OMG, SMH or LOL.