What are the Real Costs of Raising Dairy Replacements?

It’s important to know because your dairy’s profit potential is at stake.

Do you know what it really costs your dairy enterprise to raise replacements? Would it be more economical to send them to a custom raiser? According to University of Nebraska Extension Dairy
Specialists Jeffrey Keown and Paul Kononoff, you need to take an objective look at your current dairy enterprise to answer these questions.

They caution that the decision to stop raising replacements and switch to a custom rearing operation should not be made lightly because the entire profit potential of your dairy operation is based upon the foundation of good heifer rearing.

There are many questions to answer before making this decision. Keown and Kononoff emphasize it will take time and effort to obtain the information necessary, and to be certain you are making the correct
decision for your situation. The University of Nebraska dairy experts suggest you start by answering the
following questions:

1. Do you currently have enough labor to raise your own replacements? If not, you might consider two options: have your heifers custom raised, or consider hiring another employee to do the job for you.

2. Are your facilities — housing, land and feed resources — adequate to raise heifers?

3. Under your current system, are your heifers freshening at 24 months of age and at 1,250 pounds (for Holsteins)? If your answer is no, then you should consider revamping your heifer-rearing operation.

4. Do you have enough capital to pay someone else to raise your heifers?

5. How could the facilities currently used to raise heifers be better utilized if you no longer raised your own heifers? If no economic use can be made of the existing facilities, then you may want to continue raising your heifers. If another economic use can be found for existing facilities – one that will return a profit to the enterprise over the expenses of custom-raising – then alternative uses should be  considered.

Keown and Kononoff say most dairy producers estimate the cost of running their replacement enterprise by calculating expenses for the milking herd first, then allocating the remainder of expenses to heifer rearing. They suggest you might be better off taking the opposite approach. First, ascertain what it takes to raise your replacements by accurately tracking your heifer-rearing expenses. This
can help you evaluate whether custom-rearing could be more profitable for you.

The Nebraska dairy experts point out that the usual cost of raising a heifer from birth to 24 months ranges from $1,050 to $1,200. If your costs are significantly below these figures, and your heifers are freshening at 24 months weighing 1,250 pounds, you are doing an excellent job in your heifer program, they say.

When recording the costs for heifer raising, estimate expenses for various age categories. The age categories normally used are newborn to 2 months, 3 to 12 months, 13 to 24 months and over 24 months. Your goal should be to have all heifers freshen by 24 months.

Remember that every penny put into a heifer that does not freshen is a total loss, say Keown and Kononoff. That’s why every effort should be made to make heifer rearing a top priority.

Proper feed formulation, vaccinations, routine herd-health programs and maintenance of fences, equipment and facilities should be given top priority. When your heifers are due to be bred, move them closer to the milking herd so they can be observed in heat and bred properly. Producers often have excellent heifer-rearing programs but neglect to check the heifers for heat.

Keown and Kononoff offer more detailed information plus a cost-analysis worksheet and example partial budget for raising heifers in “Developing Dairy Heifer Rearing Expenses” published by  the University of Nebraska Lincoln Extension, Institute of Agriculture and Natural Resources. This publication can be downloaded at:

http://www.ianrpubs. unl.edu/epublic/live/g1662/build/g1662. pdf?redirected=true

How to Choose a Custom Heifer Raiser

Let’s say you’ve calculated the costs of heifer rearing for your particular dairy enterprise and decided it will be more profitable for you to send your heifers to a custom raiser. But how do you make a decision on which custom heifer raiser to choose? The University of Nebraska dairy experts provide these suggestions:

• Visit the facility where the heifers are raised.
• Talk to the workers and spend time watching how the heifers are treated.
•  Walk around the facility and make sure the area is sanitary, buildings are in proper repair, adequate clean, cool water is available, feed is not left in the manger to mold and hay appears to be top quality.
• Ask what ration is fed to the younger heifers and how it changes as the heifers mature.
• Are there adequate employees to care for all the animals in the facility? 
• Inquire about the procedures for heat detection and who breeds the heifers. 
• Look at the semen inventory and tanks. Are they clean and kept in a secure place with proper inventory and accountability procedures?
• How are heifers identified and commingled?
• What vaccinations are required, and who is the veterinarian?
• How often are routine health checks made on all the heifers?
• What bio-security measures are utilized and how stringent is the implementation?