One of the biggest concerns of ranchers when they are considering AI is that their costs will increase if they synchronize estrus and AI their cows. Does estrus synchronization and AI actually increase the cost of getting a cow pregnant? Few ranchers understand these costs which make the decision to AI a difficult one.
Let's first try to understand the costs of pregnancy when using natural service. The factors that most dramatically impact cost per pregnancy for natural service include the initial purchase price, the number of cows that the bull will breed, the number of years a bull will be used, and the pregnancy rate. The costs per pregnancy for bulls that range in price from $1,500 to $3,000 and bull-to-cow ratios from 1:15 to 1:50 are shown in the table below. Assumptions of the calculations included use of the bull for 3 seasons; 10% death loss of bulls; 7% interest rate; and an 85% pregnancy rate.
Annual bull maintenance costs are probably a bit higher than most producers would predict. Feed costs for a bull are quite high ($560.60) and increasing the feed costs by $100 increased cost per pregnancy from $2.44 to $8.12 for high and low bull-to-cow ratios, respectively. The annual cost of about $100 per bull for labor, vet, repairs (gates, etc), and miscellaneous is likely a bit conservative but the total variable cost considering today's feed costs is about $700.
The fixed costs of using natural service basically are a reflection of the opportunity cost of the bull. A rancher invests money in his commodity (i.e. the bull) and using that money for this purpose has a cost associated with it in addition to the actual expenditure. For example, the depreciation of the bull and the equipment needed to handle the bull needs to be included. Also, the interest on the money used for purchase is an expense. Since these costs are a reflection of the purchase price, they will increase as the purchase price of the bull increases. Fixed costs range from $255 to $823 for bulls that cost between $1,500 and $3,000.
Using this model, costs per pregnancy ranged from $22.77 to $120.41 depending predominantly upon the purchase price and bull-to-cow ratio. Most ranchers in Kentucky run one bull per 25-30 cows so the cost per pregnancy for Kentucky beef cattle producers typically runs from $38-$72. This seems high, but, frankly, most famers don't realize just how much it costs to produce a pregnancy.
The cost per pregnancy when using for estrus synchronization and AI is easier to calculate. Cost per pregnancy is influenced by cost of the estrus synchronization drugs (usually $10-20 per cow), the cost of labor ($5-$15 per cow), and the cost of semen (highly variable). The main factor that influences the cost per pregnancy of AI is conception rate. As conception rate to AI increases, the cost of pregnancy of the system decreases. A common estrus synchronization system that is used in cows is the 7-day CIDR + TAI. The standard out-of-pocket cost for this system is about $45 per cow (semen/service ($20), synchronization drugs ($20), and labor ($5) per cow). If 60% of the cows conceive to the AI, then the cost per pregnancy is $75 which is similar to the cost of using a $3,000 bull.
So, the cost of using estrus synchronization and AI is similar to using a quality bull. Certainly, the cost of registered bulls has gone up recently which makes considering estrus synchronization and AI practical. The key is can estrus synchronization and AI increase productivity and profitability? Can it increase the value of your calves? We will address these issues in the next couple of months.
a1,800 pound bull sold at $.6049 per pound
b1.5AU x 8 months grazing x $17.45/AU
c1,800 lbs bull x .025 = 45 lbs hay per day x 1.15 (waste) / .90% (conv to as-fed) = 58 pounds of hay per day. 58 lbs per day x 120 days / 2000 x $65 per ton cost for grass hay.
dInterest on money needed to purchase feed.
eInterest on money used to purchase the bull
This table was altered and used with the permission of Dr. Sandy Johnson, Kansas State University.
Source: Dr. Les Anderson, UK Beef Extension Specialist