The Gooseneck Dilemma
By Scott Lake, UW Extension Livestock Specialist
Today’s cattle producers are enjoying cattle prices that have rarely, if ever, been topped. However, along with increasing calf prices, there has been a tremendous increase in fertilizer, fuel and hay prices. And how can we forget that corn prices continue to set record highs?
Because of these rising input costs, record calf prices are not necessarily translating into record profits. It is doubtful that the cost structure of raising cattle will change in the near future. Today’s beef cattle producers will have to continually re-evaluate every aspect of their operation to find opportunities to increase profit, whether that is cutting costs or creating new profit centers.
One potential ranch enterprise that could either create a new profit center or reduce costs is heifer development. Raising heifers as replacements is a costly and time-consuming task that may not be worth the money or effort. Beef producers should carefully consider the cost of time, interest and feed as they make the decision of buying versus raising replacement heifers.
Due to dystocia concerns, most producers select yearling bulls with calving ease EPDs and/or low actual birth weights. Because the accuracy of yearling bulls is modest at best, actual birth weights are probably a better indicator of potential calving ease.
Nevertheless, growth performance is often lower on the list of importance for heifer bulls, and rightfully so. However, there are quite a few dynamics at play that can affect profitability. First, after a year or two, sometimes a heifer bull is physically too large to service heifers. But, since the bull is still in his prime, he is placed with the producer’s cowherd and another heifer bull is purchased.
While the initial bull has physically matured, his genetic merit for growth and performance hasn’t likely increased. Thus, he is still siring lightweight calves that don’t have a tremendous amount of growth potential. After a couple such cycles, the producer may have a whole battery of bulls that are low on growth. Sound familiar?
As a general rule of thumb, most producers turn over approximately 10 to 15 percent of their cowherd annually. This means only 10 to 15 percent of the heifers would be retained as replacement females each year. Hence, a producer who rolled the “heifer bulls” over to service the mature cows has set their selection criteria for bulls that breed the majority of their cows to fit the 10 to 15 percent of the heifers they are keeping. This producer has essentially handicapped the remaining 85 percent of their calf crop from a growth standpoint to accommodate the few retained replacement heifers.
Thus, the gooseneck dilemma is born! The producer in the above mentioned scenario has now set back a pot load of calves from a potential growth standpoint, to keep a group of heifers that the average-sized producer could fit into a gooseneck trailer.
Why not buy replacement heifers? There is evidence to suggest the resources required (feed, labor, space, time, bulls, etc.) to develop your own replacement heifers outweighs the cost of purchasing replacement females, even in the current high-priced market environment.
There are several excellent educational tools to calculate whether it is better to buy or sell replacements (ansci.colostate.edu/beef/). However, it is important to recognize that these calculators only compare the input costs to raise heifers compared to cost of purchasing heifers. To truly make an informed decision, the cost (lost performance) of calves that could have been sold needs to be considered.
For instance, if a rancher were to buy all replacement heifers already bred, there would be no need for a heifer bull or the expense of maintaining the bull. Because creating replacement females would not be a concern, terminal crosses with higher growth potential could be utilized without fear of increasing mature cow size. The end result would be a heavier calf crop at essentially the same cost.
In fact, in recent years, a high growth potential Continental-influenced bull can be purchased for less than the price of an average Angus bull. Terminal crosses can produce quality calves that will wean heavier, grow in the feed yard and maintain a high quality carcass. This is a win-win scenario regardless if calves are sold at weaning or retained through the feed yard. If maintaining the right color is of importance, there are many breeds that will help maximize growth and are available in black, red, white and every color shade in between for your convenience.
This type of system also provides an avenue for larger producers to sell bred heifers. Simple economies of scale are in play, and producers with larger numbers and greater resources can develop heifers less expensively than smaller producers. Obviously this system has valid concerns as well.
A relationship with the “replacement supplier” needs to be established to ensure that heifers have the genetic make-up and have been developed in an environment that will allow them to adapt and perform at the home ranch. As with any management system, the system outlined here may not work for everyone. However, purchasing replacement females and utilizing a terminal cross has the potential to increase ranch profitability.