The Moos Room™

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Joe: Welcome to the Moos Room, everybody. This is Dr. Joe Armstrong and it's just me today. We're covering a dairy topic, one that I just presented on with my colleague, Jim Salfer. I'll be taking some of the things he said and applying them today. Great resource, Jim Salfer. He's working out of St. Cloud, been with Extension for a long time. We heard about him last week from his son, Isaac Salfer, who's also with the University of Minnesota. Amazing to have both of them there. Both amazing resources. Thank you, Jim, for helping me the other night and for providing all the insight you had at that meeting.
The question we were really addressing at this meeting that we had the other night in Pipestone was what should we be doing with replacement heifers? Should we be raising heifers at home? Should someone else be custom-raising them for us? Should we be raising heifers at all or should we be buying them as replacements? There's a lot to talk about in this, and we're going to keep it fairly brief most of today. I just want you to think about all your different options that are out there. There'll be some other things to think about when we talk about economics and all the things that are not about economics that matter in this decision as well.
On the beef side, we have this discussion sometimes as well where we talk about should I be raising my own replacements or not. Should I be buying them? How big should I be before I get to that point? There's a lot that goes into whether or not you should raise your own replacements on the beef side. On the dairy side, this is a massive question. On the dairy side, we're talking about so much that goes into what the future of your dairy is going to look like, and that all is very dependent on how those calves are taken care of at a young age and all the way through until they're milking in your herd. What are the reasons that you would raise your heifers at home?
I was really happy to see that this group in Pipestone had a lot to say on this and they knew exactly why or why not they would want to raise their heifers at home. One of the biggest things we heard, and I think almost everyone that was raising their heifers themselves agreed on, was control. Having control of the product, having control of the genetics, having control of what's going on, knowing exactly what's happening with their calves. Control is a huge piece of this, just knowing what's happening and having everything figured out and having oversight of every piece of that process of getting a heifer from birth all the way into the milking herd.
Some of the other things that came up when we talked about this discussion, why raise your own heifers, sometimes it's a way to keep someone employed at the farm. If someone is willing to take on the challenge of raising calves, then having them at home and raising them yourselves is a great way to give that person a job, whether that's a spouse or kids or whoever else it is. It's a way to provide a job that is incredibly important and can save you money on your dairy farm.
That brings us right to one of the most important pieces of this is cost. The cost of raising your own dairy heifer. Now, that's going to come up again when we talk about the other piece of this, what does it cost to buy your own and what does it cost to raise your own, all of that. Is there a way to offset the difference if you're not willing or you're not able to raise your own heifers? We'll get into that later.
Part of the quality of product conversation is we are providing a product at the end of this process. We're looking for an animal that's going to be in our herd, milking for a long time, that can produce enough milk to stay in the herd long time without too many issues on the health side. That all is directly related to whether or not they're taken care of as a young animal.
Quality of product is one reason you would raise your heifers at home, and that's part of the control piece. If you are going to have the heifers at home and you're going to raise them really, really, really well, go for it if you have the time and the labor and the money. That's where we're looking at, is there is control and quality of product. Pair that with cost, potentially providing a job for someone at the farm. Those are all amazing reasons to raise your own heifers.
The other piece of this from the veterinary standpoint is biosecurity. If you're going to attempt to have a closed herd, and that's a whole nother discussion, what is a closed herd and what is not, but if you're going to limit your risk when it comes to biosecurity, raising your own heifers is a great way to do that so that you don't send them somewhere else to be raised by someone else, potentially mixed with other herds, all of that stuff, and then come home and bring whatever they have with them. There is risk associated with that and so biosecurity is a great reason to raise your own heifers.
Now, what about the other side of this conversation? Why would I have someone else raise my heifers? The custom feeding side of this piece. Why would I send my heifers somewhere else for someone else to raise them? Well, again, it comes back to a lot of different things, a lot of variables. One of the things is just facilities. I think that was something that I had on my list, but I didn't realize how high it would be on my list after talking to all the farmers at this meeting.
Facilities is a huge piece of it. Do I have physical space on my farm and adequate facilities where I feel comfortable raising heifers in them? A lot of times the answer is no or at least not yet, or not right now. That comes back to all the other things that go with raising heifers, whether it's labor or time, time being a big piece of this. That's one we're going to focus on later as well when we talk about non-economic reasons for maybe raising your heifers somewhere else or buying replacements. Labor is huge. We all know there's a shortage of labor. Doesn't really matter what industry you're in at this point. There's a shortage. Labor is a big piece. If you can't find help to do it, it's hard to do it yourself.
Then one thing we talked about a lot and we need to focus on here too is quality of product. We talked about the ability to raise heifers really well yourself, but there's some situations where frankly maybe you aren't doing a very good job of raising your own heifers. There's all sorts of reasons for that. If you're not doing a good job of it, maybe it is time to consider having someone else do it so that you can get a better product in the end.
Now, why might you not be able to do a good job raising heifers? Well, I think one underestimated reason why is that you just don't like working with calves. That is a real possibility. If you don't like doing calf chores and you just don't enjoy the monotony of doing the exact same thing every day at the exact same time, it's hard to do a really good job if you don't enjoy the work. I'm not saying you can't do a good job if you don't enjoy it because I think a lot of people do a very good job and they may or may not enjoy it at all, but it is harder to stay engaged and stay on top of things when you just really don't like the work.
Then we have those same considerations when it comes to labor and time and whether or not you can afford to spend the time raising your own heifers if you're not going to have the true amount of time you need and the true amount of help you need to dedicate yourself to doing a really good job. Now, one thing that Jim brought up that wasn't on my radar as much as it should be is just land base. Do you have the land base available to provide the feed for raising your own heifers?
Now, a lot of dairies might have that land base or they have the opportunity to take some of their poorer quality forages or feeds and push them through that heifer grower operation on their farm to find value in those things, but not everyone has that extra land base, and that is a big factor in whether or not you have the ability to raise your own replacements or not.
Now, we've done plenty of episodes on how to take care of calves and some of the benchmarks behind whether or not you know you're doing a good job or not. I think it's really important to know those numbers regardless of if you raise your own heifers or not because it allows you to know if your heifer grower is also doing a good job. That's something you need to stay on top of. I really think it's super valuable for heifer grower operations to provide lots of data about how good a job they're doing so that their clients can see that they're doing a very good job with their heifers.
If you don't stay on top of that and your heifer grower isn't doing a good job or you're not doing a good job, there's a big lag time. There'll be whole cohorts of heifers that are not going to perform well. When they get back to your place and they're lactating, they're going to have a lot more issues. It's going to be a huge headache, and because it's going to take you two years to find out if you don't check in, you've got another two years before it's going to be fixed.
I think it's really important you stay on top of this and I think it's really a great value-added service that a lot of heifer grower operations can provide by just taking basic data that allows them to say, "Yes, we are doing a good job," and I think it's really great to provide health records as well so those dairies and their clients know, "Hey, this heifer really did have quite a few issues as a calf. Now she grew pretty good, but she had several pneumonia events or scours events and always lagged behind a little bit."
Now if you don't have that information, you might not put her on the call list like you normally would because you just aren't aware of what was going on. Again, lots of opportunities to gather data. I think it's a great idea if you are a heifer grower to provide that as a service. If you are a dairy, I think you it's great to ask for those things. You need to be able to know if they're doing a good job or not.
Since I'm a veterinarian there is no way that we can get out of this conversation without talking about biosecurity. If you're going to have someone else raise your heifers offsite or you're going to buy replacements, biosecurity is something that you need to factor in. There are certain diseases that can really make your life miserable and potentially put you out of business if we aren't being careful about it. You need to trust your heifer grower. If you are sending your heifers to that heifer grower, I think it's very important to ask what they're doing to ensure that when they send you their product at the end, which is your calf, what are they doing to ensure that they're protecting you from some of the diseases that are out there that could be really, really devastating?
This becomes especially important if you know that your animals are co-mingled with other dairies. I think you have to be on the same page with the other dairies and the heifer grower about what steps are we taking to avoid some of these things coming back to my dairy, whether that's BVD or Johne's, there's a lot of things that we need to address in this whole process when it comes to biosecurity. All right, enough of the boring biosecurity talk. Let's talk about buying replacements. Why would you buy your replacements?
Now, there's several ways to do this and it all comes down to what animal are you going to buy. Are you going to buy a springer, a pregnant animal, late in gestation, and then you're going to get the calf and a lactating cow? Or what we're seeing more frequently now, especially in Wisconsin, is people buying wet cows or 60-day fresh animals that are already milking. Why would you buy that animal and not a springer?
I would say from a biosecurity standpoint you have a couple advantages. If you're buying a pregnant animal, you can test the animal itself that is pregnant for BVD, you cannot test the calf she is carrying for BVD. She could be carrying a PI and you will not know until that calf hits the ground. Unless you're testing every calf that hits the ground, you have the potential to expose your herd to a PI animal which is certainly less than ideal.
That's one reason to maybe consider buying a fresh animal that's fresh 60 days already milking, not pregnant. There's some biosecurity things that go into that decision. Also, 60 days fresh, that is the cutoff that we use when we're looking at when do most animals leave a herd that have had problems. They leave in that first 60 days. Basically, I am paying for an animal where someone else has taken the risk of that for 60 days. Now you might have to pay for it because you're paying for a low-risk animal as opposed to a higher-risk animal. Not necessarily high risk but higher risk animal when you buy that springer or that already pregnant animal and you have to deal with the transition period.
Now what does that cost, right? We're looking and talking to people about what does it cost to buy a replacement. We're talking today, basically, middle of July in 2023, we're seeing people buy replacement animals or that wet cow 60 days fresh for $2,500, $2,600. Now that's certainly immediately may sound like a lot but again remember you're paying for a low-risk animal that's been through the hardest part of that first 60 days. They're ready to go as soon as they hit your farm.
Yes, there is some stress from the change in environment and being in a new place and all of those things. In general, they're a lower-risk animal and you didn't have to pay for the cost of raising that animal all the way through that first two years of her life, getting her pregnant, all of those things. What does it cost to raise your own heifer? That question really comes down to an extension answer that we always say and it depends.
Now, I can look up the data on FINBIN and I can see what the range is but on average when we go across the board, not looking at the different breakdowns percentage-wise on who can do it the best or the cheapest, just average across the board, we're looking at $2,000 to $2,200. If that is the case, I think it's really, really practical to think about what am I getting for that $2,000, that $2,200 doing it myself versus what if I bought an animal for $2,500? Now there's certainly farms that can raise their own heifers for much less. Maybe some of those farms can get by raising their own heifers for much under $2,000 at $1,700 or $1,800 and a lot of that cost comes back to, can you do it at that low of a price and still do it well? If you can, all the more power to you.
You just need to really be honest about your heifer growing operation and how well it's going. If you can do it for that inexpensive, great. For a lot of dairies, it's very reasonable to consider, should I be raising my own or should I take that time and that labor that I'm using on calves and put it towards something else? As we talk to our colleagues in Wisconsin, one of the things we see is that the beef market is driving some of these decisions. Calves are worth a lot right now, a ton. If I make a decision that I am no longer going to raise my own calves and I'm going to buy all of my replacements, that opens the door to breeding my entire dairy herd to beef.
Now, if beef prices stay high and those calves are worth a lot, that serves to greatly offset the cost of buying your own replacements and make up the difference for what you could do it yourself versus what you're going to have to pay to buy your own replacements. There is a lot to think about in this discussion, and we can't certainly get into all of it today. I don't want to because, first of all, it'd be boring to hear me ramble on for another 40 minutes. I do encourage you to reach out with questions and comments and ask this question to me. If I have questions I will certainly pass them along to Bradley and Jim and we'll pull all of our answers together and get you what we think is our best answer among the three of us.
Now, before we wrap up, I want to talk about this non-economic parts of this decision. I think on this podcast we've talked several times about how not every decision is an economic decision. The best example of that is your 4-H animal that's in your herd. There's not too many of them that can break even. They are a non-economic decision in your herd and everyone has an animal in their herd regardless of if they're a 4-H animal where really they're an emotional attachment or they're your first cow or your best cow and she just isn't an economic decision anymore and she gets to stay. That's totally fine.
One of the other examples that I like to use for this non-economic decision is your kids coming home to farm. Does it always make economic sense for you to take a risk to expand or do something else that allows your kids to come home and farm? No, it doesn't but you're going to do it anyway, almost every time, even though it may not make economic sense. Long story short, the same thing applies to this decision in raising calves especially if you don't enjoy it. You have to think about the stress, the mental health aspects, the time, the big thing being time. Time is the most valuable resource.
If you don't like raising calves and you'd love to spend your time doing something else that can benefit the dairy and can help offset the cost of either buying replacements or having someone else raise your calves, it becomes a little harder to figure out how all the variables fit together when it comes to making that break-even calculation. I guarantee it's going to make your life better if you hate raising calves and now all of a sudden you don't have to do it anymore and you get to spend your time helping the dairy in a different way.
Now that comes back to stage of life as well. How much is your time worth? If your friends are starting to retire and they're headed to Hawaii and you don't get to go because you have calves at home maybe you're willing to pay a little extra knowing that it does not make pure economic sense to do so, so that you can go on vacation with your friends and you can enjoy your life and do that at an age where you're still able to.
That is not an economic decision, but it's a perfectly valid decision in the scope of your life and where you are. Look at the economics, then step back, look at the non-economic side and what it provides for you in quality of life, mental health, all those other things, and then bring them together and see if you can get it done. With that, like I said, if you have comments, questions, scathing rebuttals, send them to themoosroom@umn.edu. That's T-H-E-M-O-O-S-R-O-O-M@umn.edu.
I will get those questions answered myself. Send them through Bradley. I'll talk to Jim. Between the three of us, we should be able to answer your question. Please check us out on Twitter @UMNmoosroom and @UMNFarmSafety. Check Bradley out on Instagram @umnwcrocdairy. Check out our website extension .umn.edu. Thank you everybody for listening. We will catch you next week.
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