  BeefTalk:
Market Power Creates Sale Options for Heifers
By Kris Ringwall, Extension Beef Specialist,
NDSU Extension Service
Every fall the dilemma of which heifers to keep or cull weaves its way into
the normal flow of beef conversation. When calf prices are high (like this
year), the heifers may be too good to keep.
Local sale barns are reporting strong markets. A look at 100 lots of heifers
indicates the upper end of the market is good. Weights at the sale barns ranged
from 326 to 681 pounds. The lightweights make excellent coffee table talk; their
high dollars per pound are attractive but they are too light to pay the major
operating bills. The 632-pound heifers, selling at $98 per hundredweight, bring
more than $600 per head, which should surely cover the bills.
A review of various market reports indicates uncertainty over whether the
holding and purchasing of replacements is going to accelerate into herd
expansion. The values for heifers have helped producers pay bills, but the
question of keeping or selling heifers remains.
Each year I ask the students in the cow-calf management course to pick a
topic and try writing a news story. Sandi Frenzel, who ranches in southwest
North Dakota with her husband Joe, added some input in regard to replacement
heifers.
Sandi noted, "Much can be said for raising your own replacement heifers. If
you are on the CHAPS program or some similar record keeping system, you know the
performance record of your weaned calves and, based on the their mother’s
production, the maternal qualities. You know their frame size, their disposition
and that they are relatively disease-free because you have controlled their
background and environment. They look good to you, so why would you choose to
sell them and let someone else take advantage of all your hard work to produce
great heifers?"
In most debates there are two sides to a question. Sandi continued: "There
are some possible reasons that you might want to let them go. If you keep your
own raised heifers, you lose one full year of calf production from that animal
unit. Unless you have numerous pastures you also risk the chance of inbreeding
if those heifers end up in the same pasture as their sires."
Sandi notes in contrast "By purchasing your bred heifers from another
reliable source, you will have a calf on the ground one full year sooner than
you would by raising your own. I need to stress reliable source because it’s
very important for you to identify where those replacement heifers come from if
you want to be guaranteed that you are getting the quality cattle that you want
for your herd."
In an environment that places increasing emphasis on tracking and verifying
cattle sources, the comfort needle would point to improving in-herd records and
only allowing in-herd replacements. On the economic side, the needle would point
to looking at the current value of good heifer calves at $500 to $600, versus
the projected value of upcoming-bred heifer sales.
Current projections place bred heifers in the $750 to $850 range.
Interestingly, the difference between heifer calves and bred heifers is
approximately $250 dollars, roughly the cost of developing them. Do you go for a
calf this year and buy bred heifers or do you hold and develop your own heifers
and calve out last year’s heifer calves?
For me, I’m going to develop a known set of heifers but cull deep. But in
straight commercial production, buying replacement heifers from, as Sandi notes,
"reliable sources," willing to pass the potential tough sourcing standards,
ready to calve out, makes a lot of sense. Just watch the premium.
May you find all your ear tags.
Your comments are always welcome at
www.BeefTalk.com. For more information,
contact the North Dakota Beef Cattle Improvement Association, 1133 State Avenue,
Dickinson, ND 58601 or go to
www.CHAPS2000.com on the Internet. In
correspondence about this column, refer to BT0168.
###
Source: Kris Ringwall, (701) 483-2427, kringwal@ndsuext.nodak.edu
Editor: Tom Jirik, (701) 231-9629, tjirik@ndsuext.nodak.edu
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Sell or Develop the Current Heifer Crop?
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Current good heifer values $500-$600
Current bred heifer values $750-$850
Estimated development costs $250
What would you do?
Raise replacements................Source verified
Buy replacements.........Possibly source verified
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