LUBBOCK, Texas (RFD News) — Record cattle prices are making replacement-heifer decisions increasingly expensive for cow-calf producers, raising the financial stakes as ranchers consider whether to buy breeding females or retain their own calves.
University of Arkansas agricultural economists James Mitchell and Ryan Loy developed a Beef Cow and Heifer Investment Analysis tool to compare those choices. Under default assumptions, the model estimates a producer could pay up to $5,018 per heifer while still targeting an 8% return.
The calculation assumes a 92% weaning rate, 520-pound calves, $1,100 in annual cow costs and an eight-year productive life. Changing those assumptions can quickly alter the economics. Reducing the weaning rate to 87% produces a negative net present value of $596 per head.
For producers retaining their own heifers, the cost also includes the calf sale they give up, development expenses and an additional year before receiving the first calf.
The economists say the best choice depends on each operation’s costs, financing, productivity and expected cattle prices rather than a single industrywide answer.
