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Factors affecting replacement heifer values
                                                                                                The Midwest Cattleman · February 25, 2021 · P7

      Longevity or replacement rates within the herd are crucial in deciding what you can afford to pay.                            By Curt Arens

         One of the biggest decisions  replacement heifers, and they  ment rate.
      you can make that affects your  can replace capital faster in           They also studied three
      bottom line for the cow-calf herd  those operations.  “Find some- different  cost  of  produc-
      is deciding what you can pay for  thing to match your forage base,  tion  ranges,  with  $716.16
      replacement heifers. If you pay  feed resources and goals with  as a low cost of produc-
      too much, you are setting your- your operation,” Saner said.          tion,  $780.50 as an aver-
      self up for a situation where         In 10 years of economics stud- age,  and $831.20 as the
      those heifers cannot possibly  ies at the University of Nebras- high end of cost of produc-
      pay for themselves over time.      ka-Lincoln  Gudmundsen  Sand- tion.  These numbers will
         At a recent University of  hills Laboratory near Whitman,  vary according to opera-
      Nebraska BeefWatch webinar,  researchers looked at three dif- tion. The information from
      Randy Saner, Nebraska Exten- ferent replacement rates of 14%  the studies helped develop
      sion educator, told participants  on the low end,  20% as aver-              continued on page 17
      that longevity or replacement  age, and 28% as a high replace-
      rates within the herd are crucial
      in deciding what you can afford
      to pay — and if a heifer made
      money for the operation, or cost
      4 factors
         There are four basic factors
      that affect the price a producer
      can afford to pay for replace-
         1. Longevity. This  simply
      means a replacement heifer’s
      ability to stay in the herd as a
      productive unit.  “If we have to
      sell her early on, she costs us
      money,” Saner said,  “because
      she didn’t raise enough calves
      to pay for herself.” For instance,
      a 12-year-old cow that has a
      healthy  calf  every  year  could
      easily bring $3,000 into the herd.
         2. Costs vs. value. This factor
      takes into account both current
      and future expected differences
      between costs and revenue.  “If
      you pay a lot for the heifer, and
      the calf prices are very low and
      costs are high over her produc-
      tive life, this impacts how much
      the  cow  eventually  brings  into
      the herd,” Saner said.
         3. Genetic and phenotypi-
      cal compatibility. This  factor
      asks if the heifer is genetically
      compatible with the rest of the
      cow herd and fits into the geno-
      type of the herd.
         4. Operator goals and man-
      agement style. Producer goals
      and  resources  are  different  for
      every unique geographic region.
      In some regions, corn is often
      available to feed to cows, but in
      others, that may not be the case.
      No matter where the operation
      is located, the heifers purchased
      or retained must fit with the
      goals and resources available to
      the operation.
      Low-cost and low-replacement
         Saner said that, ultimately,
      low-cost, low-replacement-rate
      herds can afford higher-valued
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