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