It’s weaning time for spring-born calves. As producers wean heifer calves, they will consider if they should keep them as a replacement female for the cow herd. At the same time, a large number of bred heifers will hit the market in the next few months.
“It is not uncommon for someone to comment on how expensive bred heifers are and assume that they can develop their own heifers for much less,” says Kenny Burdine, University of Kentucky livestock agriculture economist. “While this is true in some cases, I also think it is easy to underestimate some of those costs.”
Burdine shares three things that are crucial to consider when comparing the cost of developing heifers to buying bred heifers.
1. The Opportunity Cost is the Biggest Cost
“I hope this one is obvious, but the largest cost of developing a heifer is the opportunity cost of that heifer at weaning,” Burdine explains.
High-quality weaned heifers, in the 500 to 600 lb. range, are bringing $2,000 and higher across most U.S. markets. Whatever those heifer calves are worth in the marketplace is the first cost of heifer development.
He reminds producers when they chose not to sell a heifer calf, they are forgoing that income.
“This cost is huge right now due to the strength of the calf market and higher interest rates, which makes forgoing that income even more significant,” Burdine says. “While the heifer herself is the easiest opportunity cost to quantify, this applies to all the costs of developing her.”
Development costs include feed, pasture, breeding costs, facilities and labor.
2. They Won’t All Make the Cut
After the initial cost of not selling the heifer at weaning, another year of expenses will be incurred to get that heifer to the same stage as those bred heifers on the marketplace.
She will be carried through a full winter and summer grazing season and be bred to calve the following year.
“There are significant costs in doing this, but it is also important to understand that not all those heifers are going to end up being kept for breeding,” Burdine says. “Some will fail to breed, and others will simply not meet the expectations of the farmer.”
Heifers not kept for breeding will end up being sold as feeders and likely won’t cover all those expenses. Burdine adds the loss on these heifers becomes an additional cost of the heifers that do enter the cow herd as replacements.
3. Next Year’s Calf Should Be Very Profitable
“This is another one that doesn’t get much attention but really matters in a time like the present,” Burdine says.
He explains it’s easier to think about this when applied to a specific timeline. So, in his example, he frames it for a heifer born this spring.
“A heifer calf weaned in the fall 2025, kept for replacement purposes and bred in 2026, won’t wean her first calf until fall of 2027,” he says. “Conversely, those bred heifers on the market in fall of 2025 should wean their first calf in 2026. While nothing is guaranteed in the cattle markets, fundamentals suggest 2026 should be a profitable year for cow-calf operations. The potential profit on that calf in 2026 becomes capitalized in the value of those bred heifers in 2025. For this reason, comparing the cost of a bred heifer in fall 2025 to the cost of developing a heifer weaned in fall of 2025, can be misleading.”
He also points out these considerations are even more significant given the strength of the current cattle market. Burdine stresses he’s not suggesting that either strategy is best.
“There is merit in both approaches, and it largely comes down to the goals of the operator,” he explains. “While I am an economist, I also recognize there are a lot of non-economic considerations that come into play. But the economics of the decision is complex, and carefully thinking through all aspects of that decision is likely time well spent.”
