Monday, June 25, 2007


Input form For Calculating Cost Of Raised Replacement Heifers

Double click on a page icon and a larger version of that page will load into your computer. Then, you can printout that page with your browser's print command. To print the next page, click the left arrow on your browser and return to the previous web page. Then repeat this whole process for the next page.

There is an example completed input form, a blank input form for your use, and a detailed table of the heifer grower ration used in my heifer cost example. The example results are presented on the BEEF Magazine web page as my May 2007 Market Advisor.

Fall calf prices peaked In 2005, and the current beef-price cycle is expected to trend lower for a few years as the emerging biofuels era plays out. Thus, measuring and controlling heifer replacement costs over the next 3-4years is critical. Managing home-raised, replacement heifer numbers has much more impact on a rancher's unit cost of producing a hundredweight of calf (UCOP) than ranchers typically believe.

The quickest way to increase UCOP is to hold backadded replacement heifers. Conversely, the quickest way to lower UCOP is to reduce the heifer calves held back as replacements.

Where the cost of raising replacementheifers is concerned, cash accounting will lead most ranchers down a primrosepath. That's because cash accounting underestimates the true economic costs of raising replacement heifers. In fact, I project some ranchers will lose substantial money raising replacement heifers over the next few years and not even be aware of it. Ranchers are currently producing record high-cost replacement heifers destined to produce mid-priced calves for the rest of this decade and into the next- a recipe for financial stress. The cost of replacement heifers should be based on "economic costs"(opportunity costs), not "cash costs."

If you don't hold back replacement heifers, you have the "opportunity" to sell them at weaning. The feed used to raise replacementheifers could be sold, or fed to other animals. If you don't develop your own re-placement heifers, you can run more mature cows.

I have included an example input form used to calculate the cost of rasing replacement heifers. The actual calculations are published as my Market Advisor in the May 2007 BEEF Magazine.

You can double click on the input form icons for the example and blank input forms and a larger version will load into your computer. You can use your browser's print command to print out the input forms. After print the first page, click the left arrow on your brower to return to previous web page and double click the next input form. Then, print it with your browser.

Send your completed input form, along with a check for $99, to and I will generate a heifer replacement cost for your herd and email it back to you. This service is available free to paid IRM clients and NCIS Risk Management Workshop Participants.

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