Heifer price “sticker shock”: Dairy farmers have been feeling sticker shock for some time when it comes to the cost of buying springing heifers. Considering that these animals were raised before the recent spike in fuel and feed costs, it makes you wonder what the price will be in a year or two.
Custom heifer growers have been raising rates as well. They need to continually keep up with the increasing cost structure in order to stay competitive in the business. Everyone knows that costs have been rising, but how much of that affects the young stock enterprise on your farm? Can we raise heifers at less cost than the market rate?
The recent Winter Dairy Management series focused on replacements. Jason Karszes, who works in Applied Economics and Management with PRO-DAIRY, had some good answers. He pulled together real time costs and analysis for dairy replacement programs by working with over a dozen well managed and profitable dairies. Jason worked his usual budgetary magic in getting to the bottom line of what it costs today to raise a heifer to the point of entering the milking herd. This type of in depth survey had not been undertaken in New York or any other dairy states in recent years.
What the data shows: The preliminary data showed that these farms had an average cost of close to $1,710 per heifer freshened. Not included in this figure was the value of the heifer born into the system. This did include all associated fixed expenditures such as insurance, breeding, manure handling, trucking and health as well as the top four cash costs - feed, labor, building ownership and interest on daily investment. No categories were entered as “free”. Even old barns and pasture have costs associated with use, no matter how hard we try to ignore it.
These surveyed farms had heifers calving an average age of 22.8 months weighing just over 1300 lbs. Their average daily cost from birth to calving, including an adjustment for the non-performance expense of culled herd mates, was $2.45. Baby calves up to 200 lbs. cost the most per day, around $289 for the period. The 201-700 lb heifers cost the lowest per day, with a period growth cost of $517. Past 700 lbs. costs ramped up per day mostly as a function of feed costs. It cost $199 to raise heifers between 700 and 850 lbs. Post-breeding heifers (past 850 lbs.) averaged $686 to complete the last growth phase through to calving.
Quality vs. cost: Dairy researchers (and farmers) have argued back and forth for years whether across the board low cost is the best management plan in raising heifers. There is now research pointing to a real difference in production and days of productive life achievable only by the quality of inputs. Studies point towards increases of as much as 2,000 lbs of milk in the first lactation when management, diet and health are top notch. That kind of production provides a good return on those pricey inputs. The long delay between spending on a calf today and having her “milk off” the debt in two years, however, remains a disincentive. But, the lessons we have learned about the impact of transition cow comfort and care on health, culling and production might be the model used to change the mind of the industry in general on heifers.
The quality animal we are looking for tomorrow probably won’t come out of a bargain basement sale. Prices are a function of supply and demand. The strong milk prices have put an upward pull on heifer demand and maintained their market price. Time will tell if rearing costs will force the heifer value higher than it already is today. More producers may “grow their own” to avoid high prices and have handle on input quality. One thing is for certain – you can’t have quality milk cows without them be quality heifers first. The old adage “garbage in – garbage out” probably holds in heifer production!
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