B3o*Lancaster Farming, Saturday, March 7,1992 [ F A R MANAGEMENT DAIRY HEIFERS Luther B. Smith Multicounty Farm Management Agent A common question that is asked by dairy farmers is should I raise my own replacements or pay someone else do it for me? The only way to accurately answer that question is to compare what it costs you to raise a heifer to calving vs. having to pay someone else to do it. Don’t only consider the direct (variable) costs but also keep in mind the fixed costs and the oppor tunity costs. Opportunity costs are what it costs someone to do one thing as opposed to another. If you are considering having someone else raise your heifers on a contract basis, or you might be thinking of raising heifers for other farmers, the following example might be of some help. The source of some of my infor mation is the Penn State Farm Management Handbook, DHIA averages, and personal estimates. The three farm situations are the same farm. If an item, such as total debt load, is not mentioned it was the same for all three situations. The primary question to be addressed is “I need more cash flow. Should I expand the herd with or without heifers?” We focused on raising our own heifers vs. having someone else do it. So in our example, the heifers return to the farm they were bom on and V\ (£* For All <ov Vip* (|* \\ \V-tk' your Concrete \6i VOX W* 'V-J Walls And Vpv^ XUPAX&' Construction Weeds v/ Agriculture - Residential - Commercial Invest In Concrete, Quality Work That Will tast A Lifetime CALL FOR FREE ESTIMATES AND SEE HOW AFFORDABLE CONCRETE WALLS CAN BE PRECISE 601 Overly Grove Road, New Holland, PA 17557 the original owner retains ownership. Please keep in mind that the results are based on the given situ ation, and with certain factors, such as prices and yields, you might not get exactly the same results with differing factors. (Present Farm Situation) 75 tillable acres, 19 acres (135 bushels/acie) feed com. 26 acres (20 tons/acre) com silage, and 30 acres total hay (4.8 tons/acre. aver age for new seeding and estab lished stand). Farm produces 65 percent of the hay, 100 percent of die com silage, and 39 percent of the com grain needs. 60-cow herd, 60 heifers (all ages), 17,000 pounds milk/cow/ year, $13.00/cwt. average annual gross milk price. Approximately a 14-month calving interval with heifers calv ing at 28 months of age and weigh ing 1,100 pounds. First calf heifers milk 80 percent of herd average (13,600 pounds) and represent 25 percent of the herd. Second calf heifers milk-85 per cent of herd average (14,400 pounds) and represent 25 percent of the herd. Culling rate is 25 percent and mortality on heifers (birth to fresh) 5 percent Limiting factors are land and the size of the dairy bam. There is room for 10 more cows with some SCS Approved Manure Storage - Lancaster County, PA Base Plan CONTACT STEVE PETERSHEIM 717-355-0726 CONCRETE WALLS, INC. remodeling but that space is taken up at present by heifers. Results From Base Plan Situation (Figures Annual Basis) Purchased Feed $17,490 (this includes heifers), purchased com $11,170, purchased hay $6,750, milk income $120,998, net cash farm income $30,170, cash avail able after all expenses, taxes, fami ly living, debt payments are paid = $1,936. Alternative #1 Same Farm With Changes 24 acres feed com, 21 acres com silage, 30 acres hay. Farm pro duces 100 percent of the hay, 100 percent of die com silage, and 49 percent of the com grain needs. 70-cow herd, no heifers raised on the farm, heifers return to the farm 2 months before calving, and this amounts to 17 springing heif ers on the farm over a year’s time. Same milk herd average and price. Bam was remodeled to add the 10 cows at a cost of $5OO/head, totalling $5,000 financed for 2 years at 9 percent Heifers are contract raised at a cost of $1.48/heifer/day for 56 heifers per year. Culling rate is 25 percent and mortality on heifers is less than 1 percent. Heifers calve at 24 to 25 months of age and weigh 1,200 pounds. First calf heifers milk 85 percent of herd average (14,400 pounds) and represent 25 percent of the herd. Second calf heifers milk 95 per cent of herd average (16.200 pounds) and represent 25 percent of the herd. Results From Alternative #l, Annual Basis Purchased feed $13,504, pur chased com $9,224, purchased hay $O, milk income $147,186, heifer raising contract $30,252, net cash farm income $40,980, new debt payment $2,881, cash available after all expenses, taxes, family living, and debt payments = $7,305. Alternative #2 Same situations as the base plan but the herd was expanded to 70 cows and the heifers were also expanded to 70 total. The dairy facilities were expanded as in alternative #1 and heifer facilities were built to accommodate 70 heifers at $5OO/heifer. Total new debt is now $40,000 ($5,0Q0 for 10 more cows and $35,000 for heifer facilities) Financed for 7 years at 9 percent. The cropping program is now 15 PUS GMS RESULTS ELUSIVE Rotate Duke-ET *TL 2027752 VOM Born 11/2088 «A» 4 3 2 1 6 8 DMS 34+3/2 Acquired from EKj»Kre Gorwllct, Ttopl, MN ELUSIVE’S DAM WAS MATED TO ROTATE AFTER ALL THE FACTS WERE RUN THROUGH THE GMS COMPUTER. HE IS ROTATE’S HIGHEST SON FOR T.P.I. Don’t You Think GMS Has A Place In Your Herd? mis TOP BULLS AT a|s GREAT PRICES Hi 'ENNSYLVAMA Akron, PA. Kikh Campbel 717-733-0094 Atenwood, PA George Showers 717-538-1612 Berlin, PA Joyce Dingier 114-267-5576 Cobum, PA Wendel Mueter 614-349-5310 Cobiinbia, PA .. James Charles 717-396-9672 Ooylsetown, PA Ilka Charles 215-2644517 Indiana Co, PA. Robin Dannlalon 518-766-4214 Intercourse, PA Paul Martin 717-766-7766 Kulztown, PA Ilka Charles 215-264-6517 Lebanon, PA Paul Martin 717-949-2361 Linden, PA Larry Bower 717-323-9710 MHirfburg, PA David Bsachy 717-966-1344 MMlrWown, PA... Marvin Zandl 717-436-6366 New Paris, PA Barry Lawary 614-639-2044 M MARYLAND Grantsvla, MD Richard Bowaar 301-695-5709 Hagerstown, MD Don Koona 717-762-4465 KermedyviDa. MD Greg Rlnker 301-476-2323 Keymar. MO Gtag Rlnker 301476-2323 acres of com grain, 30 acres of com silage, and 30 acres of hay. The farm produces 58 percent of the hay, 100 percentof the com sil age, and 26 percent of the com grain needs. Purchased feed $20,405, pur chased com $15,675, purchased hay $10,250, milk income $141,550, net cash farm income $31,869, new debt payment $8,216, cash available after all expenses, taxes, family living, and debt payments = $6OB. The purpose of this article is to demonstrate that contracting someone else to raise heifers might be a possible way to increase cash flow. I strongly suggest that before you decide to do something like this that you develop a long-range budget for your farm situation and determine all the positives and negatives. The above results were gener ated by using the Finpack financial program. If you would like to dis cuss this or other farm-related financial situations, please call your county Penn State extension office and ask to talk to a farm management agent It Works! Northampton PA Ilk* Charles 215-284-4517 PoUsviße, PA Mil* Chirin 215-284-4517 Quakertown, PA Ilk* Chirit* 215-284-8517 Quarryville, PA Paid H*rr 717-786-8171 Reedsville, PA... Chester SeKHdge 717-667-2775 Sandy Like, PA Piul Better 412-376-3483 Shppensburg, PA . Wayne Piper 717-532-4401 Spring City, PA Bob Hewitt 215485-7827 Slewartstown, PA Tom Engl* 717-883-6836 Terre Hill, PA Paul Martin 717-7334)866 Thomasville, PA Ire Boyer 717-225-3758 Unci, PA Gale Dene 814-425-2838 Washington, PA Donald Dawn 412-225-3773 Waynesboro, Pa Don Koona 717-762-4486 West Grove, PA—Sidney Patera 215-868-8117 KNEW JERSEY Lambertvile, NJ Robert Fulper 608-387*3478 Port Murray, NJ Robert Kayhart 201-688-2605 Woodstown, NJ. Mka Charles 301-478-2323 W DELAWARE Gi Results From Alternative #2, Annual Basis + 2360 Milk + 1077 T.P.I. + 2.10 Type + 60 Lbs. Protein + .94 Feet Leg Comp. +1.73 Udder Comp. 61 Dtrs/ 45 Herds s3o°° Semen Price Rlnker 301-478-2323
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