WEBVTT 00:00:10.509 --> 00:00:13.570 Welcome to the Bullvine Podcast, where we tear 00:00:13.570 --> 00:00:16.109 apart dairy myths and rebuild them with data 00:00:16.109 --> 00:00:19.010 -driven truth. Today, we're tackling the billion 00:00:19.010 --> 00:00:21.350 -dollar question keeping every dairy producer 00:00:21.350 --> 00:00:25.429 awake in 2025. Should you buy replacements, or 00:00:25.429 --> 00:00:28.350 is that financial suicide? Heifer prices just 00:00:28.350 --> 00:00:32.350 hit $412 for Segwit. Megadaries are hoarding 00:00:32.350 --> 00:00:34.750 genetics, and your competitors are locking in 00:00:34.750 --> 00:00:38.409 54 % savings by raising their own. This isn't 00:00:38.409 --> 00:00:41.109 your grandfather's replacement math. It's a survival 00:00:41.109 --> 00:00:44.869 equation where genomics meet robot feeders. We'll 00:00:44.869 --> 00:00:47.890 expose why that $3 ,000 heifer purchase could 00:00:47.890 --> 00:00:50.609 bankrupt your operation within two lactations. 00:00:51.179 --> 00:00:53.600 You'll hear how Ontario producers are slashing 00:00:53.600 --> 00:00:57.659 infertility rates by 41 % using genomic firewalls, 00:00:57.679 --> 00:01:00.179 and we'll break down the three labor metrics 00:01:00.179 --> 00:01:02.799 that separate profitable heifer programs from 00:01:02.799 --> 00:01:05.939 money pits. Stick around. By the end of this 00:01:05.939 --> 00:01:08.260 episode, you'll know exactly how to calculate 00:01:08.260 --> 00:01:10.739 your break -even point using the BCRC calculator, 00:01:11.060 --> 00:01:13.459 and why waiting six months could cost you $2 00:01:13.459 --> 00:01:18.239 ,810 per heifer in lost lifetime revenue. Let's 00:01:18.239 --> 00:01:21.450 dig in. Well, hello there, you financially astute 00:01:21.450 --> 00:01:24.230 dairy folks. If you've so much as glanced at 00:01:24.230 --> 00:01:28.469 the recent auction results or maybe dared to 00:01:28.469 --> 00:01:31.290 open your 2025 budget, you've likely felt that 00:01:31.290 --> 00:01:34.090 tightening in the chest. Oh, yeah. Seeing what 00:01:34.090 --> 00:01:35.849 replacement heifers are going for these days. 00:01:36.109 --> 00:01:38.030 It's pretty eye -watering. Makes you wonder if 00:01:38.030 --> 00:01:40.069 they're sprinkling gold dust on those feed rations, 00:01:40.170 --> 00:01:42.439 doesn't it? It really does. It's a far cry from 00:01:42.439 --> 00:01:44.439 just a few short years ago, that's for sure. 00:01:44.719 --> 00:01:46.540 We're in territory that would have made even 00:01:46.540 --> 00:01:49.319 the most seasoned dairy economist, well, raise 00:01:49.319 --> 00:01:52.019 an eyebrow or two. Absolutely. And that's precisely 00:01:52.019 --> 00:01:54.060 what we're unpacking for you today. You might 00:01:54.060 --> 00:01:55.659 as well toss those old spreadsheets, the ones 00:01:55.659 --> 00:01:58.019 comparing raising versus buying. Yeah, they're 00:01:58.019 --> 00:02:01.439 probably out of date. Right out the window. The 00:02:01.439 --> 00:02:03.840 game has seriously changed, and our deep dive 00:02:03.840 --> 00:02:07.079 into the latest data suggests that in 2025, raising 00:02:07.079 --> 00:02:09.819 your own replacements isn't just like... a smart 00:02:09.819 --> 00:02:12.960 move. It could actually be the financial linchpin 00:02:12.960 --> 00:02:15.599 of your whole operation. We're talking about 00:02:15.599 --> 00:02:18.580 potentially uncovering some serious profit hiding 00:02:18.580 --> 00:02:21.680 right there on your farm. Precisely. We're witnessing 00:02:21.680 --> 00:02:24.860 a real confluence of factors here in this replacement 00:02:24.860 --> 00:02:27.300 market. A perfect storm, you could call it. A 00:02:27.300 --> 00:02:29.120 perfect storm, yeah. You've got these record 00:02:29.120 --> 00:02:31.259 -breaking prices bumping right up against the 00:02:31.259 --> 00:02:33.680 supply that is, quite frankly, shrinking faster 00:02:33.680 --> 00:02:36.639 than ice in July. Shrinking is putting it mildly. 00:02:36.800 --> 00:02:38.560 Let's throw some hard numbers your way just to 00:02:38.560 --> 00:02:40.800 paint a clearer picture. We've got recent auction 00:02:40.800 --> 00:02:44.120 data out of Ontario. Okay. For those heifers 00:02:44.120 --> 00:02:46.860 tipping the scales at over 900 pounds, we're 00:02:46.860 --> 00:02:52.599 seeing prices hitting $326 to $328 per hundredweight. 00:02:52.740 --> 00:02:56.120 Averaging around $326 per 92 cents. Exactly. 00:02:56.120 --> 00:02:58.539 That's definitely not chicken feed. No. And it 00:02:58.539 --> 00:03:01.909 gets even more... shall we say, motivating. When 00:03:01.909 --> 00:03:03.389 you look at the slightly lighter categories, 00:03:03.650 --> 00:03:06.849 those 800 to 899 pound heifers, they're commanding 00:03:06.849 --> 00:03:10.310 between $300 to $72 and $383 per hundredweight. 00:03:10.449 --> 00:03:13.870 Okay. And the 700 to 799 pound group, well, brace 00:03:13.870 --> 00:03:15.969 yourselves, we're looking at a range of $356 00:03:15.969 --> 00:03:19.430 .07 all the way up to a jaw -dropping $407 .11 00:03:19.430 --> 00:03:22.090 per hundredweight. Wow. And some sales even peaked 00:03:22.090 --> 00:03:25.550 higher than that, around $412. So just to bring 00:03:25.550 --> 00:03:27.879 that down to earth for a second. If you were 00:03:27.879 --> 00:03:30.139 actually in the market for, say, a 900 -pound 00:03:30.139 --> 00:03:32.479 heifer, you'd be looking at an outlay of roughly 00:03:32.479 --> 00:03:37.659 $2 ,942, give or take. That's a substantial investment 00:03:37.659 --> 00:03:39.520 for just one animal that hasn't even started 00:03:39.520 --> 00:03:42.300 contributing to the milk tank yet. Exactly. It 00:03:42.300 --> 00:03:45.080 really underscores the significant financial 00:03:45.080 --> 00:03:48.400 pressure that buying replacements puts on producers 00:03:48.400 --> 00:03:51.020 in today's market. And look, this price surge 00:03:51.020 --> 00:03:53.400 isn't happening in a vacuum. No, it's tied directly 00:03:53.400 --> 00:03:56.259 to supply. It's directly tied to the increasingly 00:03:56.259 --> 00:03:58.639 tight supply of available heffles. Yeah, the 00:03:58.639 --> 00:04:00.620 figures on heifer availability are genuinely 00:04:00.620 --> 00:04:05.539 cause for concern. As of January 1st, 2025, the 00:04:05.539 --> 00:04:08.259 number of dairy heifers expected to calf. Okay, 00:04:08.300 --> 00:04:10.719 what are we looking at? It stood at 2 .5 million 00:04:10.719 --> 00:04:14.000 head. Now that's down 0 .4 % year over year, 00:04:14.099 --> 00:04:16.600 which doesn't sound huge, but here's the kicker. 00:04:16.879 --> 00:04:19.180 That's the lowest number we've seen since the 00:04:19.180 --> 00:04:21.980 USDA began tracking this specific data. Talk 00:04:21.980 --> 00:04:24.540 about a historical low. Wow, lowest ever recorded 00:04:24.540 --> 00:04:27.339 for expected calving? And the broader snapshot 00:04:27.339 --> 00:04:29.639 isn't much more encouraging either. The total 00:04:29.639 --> 00:04:32.040 count of dairy heifers weighing 500 pounds or 00:04:32.040 --> 00:04:35.600 more registered at just 3 .914 million head. 00:04:35.920 --> 00:04:38.339 That's a weight 9 % decrease from the previous 00:04:38.339 --> 00:04:40.899 year. And that number. That's the smallest inventory 00:04:40.899 --> 00:04:44.040 we've recorded since way back in 1978. Some of 00:04:44.040 --> 00:04:46.720 you listening might actually remember 1978. It 00:04:46.720 --> 00:04:48.459 feels like we're taking a step back in time, 00:04:48.480 --> 00:04:51.100 but, you know, not in a good way for finding 00:04:51.100 --> 00:04:53.959 replacements. And what's particularly eye -opening 00:04:53.959 --> 00:04:57.699 is that even these historically low numbers might 00:04:57.699 --> 00:05:00.139 be a bit optimistic. How so? Well, apparently 00:05:00.139 --> 00:05:02.660 the USDA has made some rather significant downward 00:05:02.660 --> 00:05:05.720 revisions to the inventory figures from previous 00:05:05.720 --> 00:05:08.870 years. That's right. Between January 2023 and 00:05:08.870 --> 00:05:12.170 January 2024, the agency revised the dairy replacement 00:05:12.170 --> 00:05:16.689 numbers downwards by a staggering 371 ,600 head. 00:05:16.889 --> 00:05:20.490 Wow. 371 ,000. Yep. That's an 8 .6 % reduction 00:05:20.490 --> 00:05:22.509 that wasn't initially reflected in the reports. 00:05:22.589 --> 00:05:25.149 It really emphasizes the severity of the supply 00:05:25.149 --> 00:05:27.430 crunch we're in. So what's behind this Great 00:05:27.430 --> 00:05:29.730 Heifer Vanishing Act then? Our sources point 00:05:29.730 --> 00:05:31.689 pretty strongly towards the growing trend of 00:05:31.689 --> 00:05:34.949 using beef semen on dairy cows. Ah, the beef 00:05:34.949 --> 00:05:36.829 on dairy trend. It seems to be gaining traction 00:05:36.829 --> 00:05:39.810 at a really impressive rate. It is indeed. As 00:05:39.810 --> 00:05:43.589 James Wilson from Agritrends put it, it's taking 00:05:43.589 --> 00:05:46.649 hold like shoppers looking to grab deals on a 00:05:46.649 --> 00:05:49.620 Black Friday shopping spree. Yeah, that's a good 00:05:49.620 --> 00:05:51.699 way to put it. And with overall beef cattle numbers 00:05:51.699 --> 00:05:54.660 generally on a decline anyway, this move towards 00:05:54.660 --> 00:05:57.319 beef on dairy looks like a trend with some real 00:05:57.319 --> 00:05:59.980 staying power. It's not just a blip. Okay, so 00:05:59.980 --> 00:06:03.920 recap. The cost of buying replacements is sky 00:06:03.920 --> 00:06:07.100 high. Fewer and fewer heifers are available for 00:06:07.100 --> 00:06:10.139 purchase. Which naturally leads us to the, well, 00:06:10.300 --> 00:06:12.699 the multi -thousand dollar question. What about 00:06:12.699 --> 00:06:16.439 raising your own? Exactly. Is it truly the financial 00:06:16.439 --> 00:06:18.740 sweet spot in the current climate? Well, the 00:06:18.740 --> 00:06:21.100 data certainly leans very heavily in that direction. 00:06:21.220 --> 00:06:23.540 While those market prices for purchased heifers 00:06:23.540 --> 00:06:26.279 have, you know, shot through the roof, the cost 00:06:26.279 --> 00:06:28.560 of raising them on your own farm, provided you're 00:06:28.560 --> 00:06:31.500 running a tight ship, offers a very, very compelling 00:06:31.500 --> 00:06:34.040 alternative. Okay, let's get down to brass tacks 00:06:34.040 --> 00:06:35.879 then. Let's look at those costs. According to 00:06:35.879 --> 00:06:38.040 the Canadian Cow -Calf Cost of Production Network. 00:06:38.160 --> 00:06:40.730 Good data source there. The average cost of raising 00:06:40.730 --> 00:06:43.529 a replacement heifer back in 2023 was around 00:06:43.529 --> 00:06:47.250 $2 ,904. Now that's an average figure, remember. 00:06:47.449 --> 00:06:49.529 Right. And it includes everything, feed bills, 00:06:49.790 --> 00:06:52.089 labor, those sometimes tricky to pin down opportunity 00:06:52.089 --> 00:06:55.069 costs. Exactly. And as Dr. Sarah Johnson over 00:06:55.069 --> 00:06:57.089 at the University of Gulf points out, when you 00:06:57.089 --> 00:07:00.569 factor in, say, a typical 10 % open rate, and 00:07:00.569 --> 00:07:02.790 you distribute those costs across the heifers 00:07:02.790 --> 00:07:05.269 that actually get bred, the average cost per 00:07:05.269 --> 00:07:09.829 bred heifer drops to approximately $2 ,382. Right, 00:07:09.970 --> 00:07:13.730 $2 ,382. Now, hold on to your hats, folks, because 00:07:13.730 --> 00:07:15.939 here's where it gets really interesting. When 00:07:15.939 --> 00:07:19.120 we stack that $2 ,382 figure against those eye 00:07:19.120 --> 00:07:20.459 -watering purchase prices we were just talking 00:07:20.459 --> 00:07:23.019 about. Yeah, like that $400 plus per hundredweight 00:07:23.019 --> 00:07:27.180 peak. Especially those 700 and 799 pound heifers 00:07:27.180 --> 00:07:31.220 hovering around an implied $388 .81 per hundredweight 00:07:31.220 --> 00:07:33.199 based on that peak. We're potentially looking 00:07:33.199 --> 00:07:36.680 at cost savings at around 54%. 54%. Yeah. That's 00:07:36.680 --> 00:07:38.120 not just a little bit of wiggle room in the budget. 00:07:38.139 --> 00:07:40.259 That's a potential game changer. Absolutely. 00:07:40.500 --> 00:07:43.439 I mean, 54 % cheaper, that's a massive difference 00:07:43.439 --> 00:07:45.860 that can significantly bolster a farm's profitability. 00:07:46.339 --> 00:07:48.399 That's the difference between a profitable year 00:07:48.399 --> 00:07:50.720 and maybe a struggling one. For sure. And it's 00:07:50.720 --> 00:07:53.160 really crucial to understand where those on -farm 00:07:53.160 --> 00:07:55.819 raising costs actually come from. Right. Our 00:07:55.819 --> 00:07:58.319 sources break it down pretty clearly. The biggest 00:07:58.319 --> 00:08:03.699 chunk, a hefty 60%. 60. Wow. Is that opportunity 00:08:03.699 --> 00:08:07.000 cost. Think of it this way. That calf you could 00:08:07.000 --> 00:08:09.699 have sold for immediate cash. Yeah. It's now 00:08:09.699 --> 00:08:12.639 an investment in your future herd. The opportunity 00:08:12.639 --> 00:08:15.000 cost is basically the profit you forego today 00:08:15.000 --> 00:08:17.540 for that future benefit. And in this market, 00:08:17.560 --> 00:08:20.019 it looks like a very worthwhile trade -off. Seems 00:08:20.019 --> 00:08:22.939 like it. Other significant cost components include 00:08:22.939 --> 00:08:26.839 labor at about 9%, feed at 6%, machinery also 00:08:26.839 --> 00:08:29.720 at 6%, and land around 5%. The rest is smaller 00:08:29.720 --> 00:08:32.259 stuff, vet bills, building upkeep, you know. 00:08:32.519 --> 00:08:34.820 Precisely. And while that opportunity cost might 00:08:34.820 --> 00:08:37.480 seem large on paper, the current market dynamics 00:08:37.480 --> 00:08:39.779 for replacement heifers really shift the whole 00:08:39.779 --> 00:08:42.000 calculation in its favor. Okay, now let's zero 00:08:42.000 --> 00:08:44.259 in on that labor piece. It's always a hot topic, 00:08:44.320 --> 00:08:47.320 right? Around the coffee pot on any dairy farm. 00:08:47.500 --> 00:08:50.049 Always. And it sounds like it's a real linchpin 00:08:50.049 --> 00:08:52.409 when it comes to the financial viability of raising 00:08:52.409 --> 00:08:55.100 your own replacements. Without a doubt. The research 00:08:55.100 --> 00:08:57.240 from that Canadian cow -calf cost -to -production 00:08:57.240 --> 00:09:00.200 network highlights a surprisingly wide range 00:09:00.200 --> 00:09:02.980 in labor efficiency. Oh, really? Yeah, the average 00:09:02.980 --> 00:09:06.259 is around 15 hours per cow annually, but some 00:09:06.259 --> 00:09:08.919 farms are clocking in significantly more and 00:09:08.919 --> 00:09:11.639 some significantly less than that benchmark. 00:09:11.740 --> 00:09:14.139 Big variation. We even have a concrete example 00:09:14.139 --> 00:09:17.419 here. Michael Thompson, who manages a 300 -cow 00:09:17.419 --> 00:09:19.679 dairy up in Ontario. Okay, what did he find? 00:09:19.860 --> 00:09:22.740 He managed to slash his labor costs by an impressive 00:09:22.740 --> 00:09:26.539 40%. Forty percent. How? Simply by implementing 00:09:26.539 --> 00:09:28.940 automated feeding systems and doing some strategic 00:09:28.940 --> 00:09:31.419 grouping of their animals. That's a serious chunk 00:09:31.419 --> 00:09:33.480 of time and money saved right there. It absolutely 00:09:33.480 --> 00:09:35.639 is. And when you compare the numbers between, 00:09:35.700 --> 00:09:39.220 say, high profit and low profit farms, the disparity 00:09:39.220 --> 00:09:42.080 is really striking. High profit farms average 00:09:42.080 --> 00:09:46.259 just 8 .8 hours of labor per cow per year. 8 00:09:46.259 --> 00:09:49.990 .8. Whereas low -profit farms are labor away 00:09:49.990 --> 00:09:54.629 for a hefty 23 .9 hours, almost three times as 00:09:54.629 --> 00:09:57.570 much. Wow, that's huge. That difference in efficiency 00:09:57.570 --> 00:10:00.110 translates directly to an average labor cost 00:10:00.110 --> 00:10:04.970 difference of about $327 per cow. $327 per cow 00:10:04.970 --> 00:10:07.370 just on labor difference. Which can represent 00:10:07.370 --> 00:10:10.309 a significant 18 % of total production costs. 00:10:11.309 --> 00:10:13.210 So yeah, getting a handle on labor efficiency 00:10:13.210 --> 00:10:16.210 is absolutely paramount if you want to make raising 00:10:16.210 --> 00:10:18.929 replacements a truly profitable venture. Okay, 00:10:19.029 --> 00:10:21.929 so the potential for significant cost savings. 00:10:22.149 --> 00:10:24.710 That's a major draw for raising your own heifers. 00:10:25.039 --> 00:10:27.399 Clearly. Definitely. But our sources argue there's 00:10:27.399 --> 00:10:29.460 an even more compelling advantage, something 00:10:29.460 --> 00:10:31.440 that purchased heifers just, well, they can't 00:10:31.440 --> 00:10:33.779 offer. Ah, now we're talking genetics. Exactly. 00:10:34.159 --> 00:10:36.259 Unparalleled value of genetic selection through 00:10:36.259 --> 00:10:38.539 genomics. This is where things get really exciting, 00:10:38.679 --> 00:10:40.740 I think, and where raising your own replacements 00:10:40.740 --> 00:10:43.340 truly shines. You have complete command over 00:10:43.340 --> 00:10:45.639 the genetic makeup of your future herd. Right. 00:10:45.700 --> 00:10:47.559 You're not just inheriting someone else's breeding 00:10:47.559 --> 00:10:50.259 decisions. Or potentially they're less desirable 00:10:50.259 --> 00:10:52.940 animals, let's be honest. Genomics isn't just 00:10:52.940 --> 00:10:56.340 about, you know, fancier cows on paper. It translates 00:10:56.340 --> 00:10:59.480 directly. Think about a 40 % reduction in heifer 00:10:59.480 --> 00:11:02.259 losses, significantly higher conception rates. 00:11:02.440 --> 00:11:05.700 That means more productive future generations, 00:11:05.799 --> 00:11:08.179 faster return on your investment. Yeah, exactly. 00:11:08.419 --> 00:11:10.500 We have a compelling example here from David 00:11:10.500 --> 00:11:13.779 Williams, runs a 120 -cow dairy near Woodstock, 00:11:13.940 --> 00:11:17.419 Ontario. He reported a remarkable 40 % reduction 00:11:17.419 --> 00:11:20.200 in heifer losses and a huge improvement in conception 00:11:20.200 --> 00:11:23.460 rates in his genomically selected heifers. Way 00:11:23.460 --> 00:11:24.960 better than conventionally selected heifers. 00:11:24.980 --> 00:11:28.620 Over 65 % conception in the genomic group versus 00:11:28.620 --> 00:11:31.940 just 52 % in the others. That's a game changer 00:11:31.940 --> 00:11:34.159 for future productivity. It truly is transformative. 00:11:34.539 --> 00:11:37.159 Modern genomic testing has revolutionized herd 00:11:37.159 --> 00:11:38.919 management. You look at the replacement head 00:11:38.919 --> 00:11:41.500 for profit index, the RHPI. Right, the RHPI. 00:11:41.500 --> 00:11:43.480 That's a key indicator. It weighs hybrid vigor 00:11:43.480 --> 00:11:46.159 really heavily, about 80%. And then the other 00:11:46.159 --> 00:11:48.639 20 % is split across seven key traits, efficiency, 00:11:48.879 --> 00:11:51.080 growth, fertility, longevity, that kind of stuff. 00:11:51.470 --> 00:11:54.029 And the impact of that RHPI score is pretty dramatic, 00:11:54.169 --> 00:11:55.750 isn't it, when you look at the numbers? Absolutely. 00:11:56.129 --> 00:11:59.909 Heifers with above average RHPI scores, they 00:11:59.909 --> 00:12:02.830 demonstrated significantly lower open rates. 00:12:02.929 --> 00:12:06.049 We're talking just 13 .7 % open. 13 .7, okay. 00:12:06.190 --> 00:12:10.090 Compared to a considerably higher 23 .4 % in 00:12:10.090 --> 00:12:12.370 the group with below average scores. So that's 00:12:12.370 --> 00:12:14.610 almost a 10 percentage point difference. Exactly. 00:12:14.629 --> 00:12:17.309 Which translates to approximately 9 more calves 00:12:17.309 --> 00:12:20.580 per 100 replacement heifers you raise. That's 00:12:20.580 --> 00:12:22.639 a level of productivity enhancement you simply 00:12:22.639 --> 00:12:24.980 cannot guarantee when you buy off the shelf. 00:12:25.200 --> 00:12:28.240 Okay. So for any dairy producers out there who 00:12:28.240 --> 00:12:30.799 are still kind of weighing the pros and cons, 00:12:30.879 --> 00:12:34.899 buy versus raise, our sources lay out three critical 00:12:34.899 --> 00:12:37.259 questions you absolutely need to ask yourselves 00:12:37.259 --> 00:12:39.299 before you make that call. These are fundamental 00:12:39.299 --> 00:12:41.080 questions, really. They can steer that crucial 00:12:41.080 --> 00:12:44.259 decision first. What is the true genetic potential 00:12:44.259 --> 00:12:46.139 of the heifers you're thinking about buying? 00:12:46.340 --> 00:12:49.059 As we've discussed, you know, they might be animals 00:12:49.059 --> 00:12:50.919 that didn't quite fit into someone else's breeding 00:12:50.919 --> 00:12:53.759 program. Could be culls, basically. Could be. 00:12:53.799 --> 00:12:56.259 When you raise your own, you're in the driver's 00:12:56.259 --> 00:12:59.259 seat of your own genetic roadmap. Exactly. Second 00:12:59.259 --> 00:13:02.039 question. What does your current labor efficiency 00:13:02.039 --> 00:13:04.779 actually look like? Be honest with yourself. 00:13:05.139 --> 00:13:08.720 Right. Benchmark it. If you're consistently operating 00:13:08.720 --> 00:13:12.279 above that average of, say, 15 hours per cow 00:13:12.279 --> 00:13:15.000 annually, we mentioned, that's a bright red flag. 00:13:15.159 --> 00:13:17.039 Yeah. Got to fix that first, maybe. You might 00:13:17.039 --> 00:13:19.759 need to prioritize streamlining your labor practices 00:13:19.759 --> 00:13:22.179 before fully committing to raising a significantly 00:13:22.179 --> 00:13:24.820 larger number of heifers on your own. Makes sense. 00:13:25.370 --> 00:13:28.090 And the third vital question. It revolves around 00:13:28.090 --> 00:13:31.649 your feed cost advantage. Do you have the capacity, 00:13:31.889 --> 00:13:34.669 the land, the equipment to grow your own high 00:13:34.669 --> 00:13:37.289 quality forage? Because. Operations that can. 00:13:37.429 --> 00:13:40.110 They typically realize substantial savings. We're 00:13:40.110 --> 00:13:42.289 talking in the ballpark of 30 to 40 percent on 00:13:42.289 --> 00:13:45.169 their feed costs compared to farms solely reliant 00:13:45.169 --> 00:13:47.970 on purchased feed. 30 to 40 percent feed savings. 00:13:48.149 --> 00:13:50.610 That's another huge lever to pull for profitability. 00:13:51.029 --> 00:13:53.549 Huge. Okay. So once you've given those questions 00:13:53.549 --> 00:13:56.220 some serious thought. It's also essential, they 00:13:56.220 --> 00:13:58.600 say, to keep a close eye on some key performance 00:13:58.600 --> 00:14:01.860 indicators, you know, to assess the success and 00:14:01.860 --> 00:14:04.360 efficiency of your heifer program if you go that 00:14:04.360 --> 00:14:07.259 route. Absolutely. Tracking these metrics provides 00:14:07.259 --> 00:14:09.899 invaluable insights into the financial health 00:14:09.899 --> 00:14:12.740 and, really, the long -term viability of raising 00:14:12.740 --> 00:14:15.440 your own replacements. So what's a key one? One 00:14:15.440 --> 00:14:18.500 crucial benchmark is the payback period. Essentially, 00:14:18.720 --> 00:14:20.980 how many years does it take for a replacement 00:14:20.980 --> 00:14:24.200 heifer to generate enough revenue to recoup her 00:14:24.200 --> 00:14:26.799 development costs? Right. Makes sense. And our 00:14:26.799 --> 00:14:29.100 sources indicate that analysis of Canadian benchmark 00:14:29.100 --> 00:14:32.700 farms reveals a payback period ranging from roughly 00:14:32.700 --> 00:14:35.159 five years. Five years for the really efficient 00:14:35.159 --> 00:14:37.399 ones. Yeah, for the most efficient, low -cost 00:14:37.399 --> 00:14:40.210 operations, up to around seven years. for those 00:14:40.210 --> 00:14:42.450 with higher development costs. And Dr. Robert 00:14:42.450 --> 00:14:44.570 Chen from the University of Manitoba highlights 00:14:44.570 --> 00:14:47.350 something important here. Operations that can 00:14:47.350 --> 00:14:50.330 keep those development costs under $2 ,400 per 00:14:50.330 --> 00:14:53.139 heifer. Okay, under $2 ,400. They not only achieve 00:14:53.139 --> 00:14:55.580 those quicker payback periods, but they also 00:14:55.580 --> 00:14:58.840 gain greater resilience, more flexibility to 00:14:58.840 --> 00:15:02.159 navigate market fluctuations. Good point. Another 00:15:02.159 --> 00:15:04.799 key benchmark to consider is looking at the total 00:15:04.799 --> 00:15:07.919 expense of replacements, but spread across your 00:15:07.919 --> 00:15:10.639 entire milking herd. Right, the whole herd perspective. 00:15:10.860 --> 00:15:13.399 That Canadian research suggests the average replacement 00:15:13.399 --> 00:15:17.879 cost per cow was about $139 back in 2023. Okay, 00:15:17.919 --> 00:15:20.720 $139 per cow. But there's a pretty considerable 00:15:20.720 --> 00:15:23.320 range there. It can be as low as $50 per cow 00:15:23.320 --> 00:15:27.200 or as high as $272. Wow, big range. It largely 00:15:27.200 --> 00:15:29.720 depends on your herd's replacement rate and, 00:15:29.799 --> 00:15:32.360 of course, the individual cost you have for developing 00:15:32.360 --> 00:15:34.980 each heifer. Now, this widespread shortage of 00:15:34.980 --> 00:15:37.899 heifers, it isn't just some random market blip, 00:15:37.899 --> 00:15:40.200 is it? Doesn't seem like it. Our sources suggest 00:15:40.200 --> 00:15:42.159 there's actually a strategic element at play 00:15:42.159 --> 00:15:44.750 here. particularly among the very large dairy 00:15:44.750 --> 00:15:47.309 operations. That's a very insightful point, as 00:15:47.309 --> 00:15:49.610 the dairy sector continues its trend towards 00:15:49.610 --> 00:15:52.049 consolidation. Which it definitely is. These 00:15:52.049 --> 00:15:54.970 mega -dairies are increasingly recognizing the 00:15:54.970 --> 00:15:57.990 sort of strategic imperative of maintaining control 00:15:57.990 --> 00:16:00.389 over their own replacement pipeline. Why is that 00:16:00.389 --> 00:16:02.629 so important for them? Well, it gives them greater 00:16:02.629 --> 00:16:06.110 security, for one, and the autonomy to implement 00:16:06.110 --> 00:16:08.970 their very specific genetic strategies without 00:16:08.970 --> 00:16:11.750 being subject to the volatility and the high 00:16:11.750 --> 00:16:14.169 prices of the open market. Jennifer Martinez, 00:16:14.330 --> 00:16:16.690 she's an industry consultant, even suggests that 00:16:16.690 --> 00:16:19.970 the top 5 % of producers are, in essence, kind 00:16:19.970 --> 00:16:22.470 of locking down their genetic future. Securing 00:16:22.470 --> 00:16:25.309 their genetic future, yeah. Which could, unfortunately, 00:16:25.590 --> 00:16:28.210 widen the productivity gap between them and smaller 00:16:28.210 --> 00:16:30.730 operations even further. It's a concerning dynamic, 00:16:30.850 --> 00:16:33.789 for sure. And with milk margins projected to 00:16:33.789 --> 00:16:38.210 remain pretty strong in 2025, around $13 .37 00:16:38.210 --> 00:16:40.809 and 100 weights expected. Right. Those larger 00:16:40.809 --> 00:16:43.009 operations that have a firm grip on their replacement 00:16:43.009 --> 00:16:45.409 pipeline, they're really well positioned for 00:16:45.409 --> 00:16:47.490 potential expansion. While smaller producers 00:16:47.490 --> 00:16:49.590 might find themselves in a much tighter spot, 00:16:49.730 --> 00:16:51.769 may be struggling to even maintain their herd 00:16:51.769 --> 00:16:54.289 size because of the high cost and the limited 00:16:54.289 --> 00:16:56.470 availability of replacements they can buy. Yeah, 00:16:56.570 --> 00:16:59.389 tough spot. So, okay, if you do make the decision 00:16:59.389 --> 00:17:01.889 to raise your own replacements, you absolutely 00:17:01.889 --> 00:17:04.769 must be on your game when it comes to health 00:17:04.769 --> 00:17:07.730 management. It sounds like investing in the well 00:17:07.730 --> 00:17:10.910 -being, the survival of those heifers is just 00:17:10.910 --> 00:17:13.309 critical. It's not just important, it's fundamental. 00:17:13.829 --> 00:17:16.480 Yeah. a comprehensive health management program, 00:17:16.640 --> 00:17:19.200 including a really well thought out vaccination 00:17:19.200 --> 00:17:22.950 protocol that's... Non -negotiable. Non -negotiable. 00:17:23.029 --> 00:17:26.869 It's essential for minimizing losses and maximizing 00:17:26.869 --> 00:17:29.089 the return on your investment and raising those 00:17:29.089 --> 00:17:31.509 valuable replacements. And the key vaccines they 00:17:31.509 --> 00:17:34.210 specifically mention are for IBR. Infectious 00:17:34.210 --> 00:17:37.910 bovine rhinotrichitis. BVD. Bovine viral diarrhea. 00:17:38.470 --> 00:17:41.869 BRSV. Bovine respiratory syncytial virus. VI3. 00:17:42.170 --> 00:17:44.230 Parainfluenza 3 virus. And those troublesome 00:17:44.230 --> 00:17:46.630 clostridial diseases as well. Right. And the 00:17:46.630 --> 00:17:49.059 timing of those vaccinations is... equally crucial. 00:17:49.119 --> 00:17:51.299 You can't just do them whenever. Okay, so what's 00:17:51.299 --> 00:17:54.099 the ideal schedule look like? Generally, an initial 00:17:54.099 --> 00:17:56.740 round around four months of age, then booster 00:17:56.740 --> 00:17:59.700 shots before weaning, another round at pre -breeding, 00:17:59.700 --> 00:18:03.339 say, 13 to 16 months, and then a final set about 00:18:03.339 --> 00:18:07.220 40 to 60 days before they're due to calve. This 00:18:07.220 --> 00:18:10.000 strategic timing really helps build robust immunity 00:18:10.000 --> 00:18:12.660 during those critical developmental stages. Gotcha. 00:18:13.720 --> 00:18:16.039 It's also worth noting that even with maybe a 00:18:16.039 --> 00:18:19.579 slight anticipated easing of feed prices in 2025. 00:18:20.039 --> 00:18:23.039 Yeah, maybe a little dip. Labor costs still represent 00:18:23.039 --> 00:18:25.859 a pretty significant portion of the heifer budget. 00:18:26.019 --> 00:18:29.460 Around 15%, they estimate. 15 % just for labor 00:18:29.460 --> 00:18:31.839 on heifers. Which really highlights the increasing 00:18:31.839 --> 00:18:35.200 value of, well, automation. Things like robotic 00:18:35.200 --> 00:18:37.980 feeders, health monitoring systems. They're rapidly 00:18:37.980 --> 00:18:39.920 transitioning, aren't they, from being seen as 00:18:39.920 --> 00:18:43.119 maybe luxuries? Right. To becoming pretty essential 00:18:43.119 --> 00:18:45.480 tools for maintaining competitiveness, especially 00:18:45.480 --> 00:18:48.460 with rising labor costs. That's spot on. These 00:18:48.460 --> 00:18:50.500 technologies can significantly enhance labor 00:18:50.500 --> 00:18:52.980 efficiency, like we talked about, and potentially 00:18:52.980 --> 00:18:56.000 lead to earlier detection of health issues, both 00:18:56.000 --> 00:18:58.279 of which contribute to a lower overall cost of 00:18:58.279 --> 00:19:00.019 raising those replacements. Makes total sense. 00:19:00.359 --> 00:19:02.720 Finally, let's touch quickly on long -term strategic 00:19:02.720 --> 00:19:05.859 planning. What kind of annual replacement rates 00:19:05.859 --> 00:19:09.359 should producers generally be aiming for to ensure 00:19:09.359 --> 00:19:11.039 the long -term health and productivity of their 00:19:11.039 --> 00:19:13.849 herds? Well, the ideal replacement rate can fluctuate 00:19:13.849 --> 00:19:16.069 a bit, obviously, depending on your specific 00:19:16.069 --> 00:19:18.829 herd goals, your culling strategies. But the 00:19:18.829 --> 00:19:21.089 research generally suggests that the most efficient 00:19:21.089 --> 00:19:24.349 operations maintain rates somewhere between 10 00:19:24.349 --> 00:19:28.049 % and 14 % annually. 10 to 14%. Okay. And that 00:19:28.049 --> 00:19:31.430 Canadian benchmark farm data backs this up. Low 00:19:31.430 --> 00:19:35.329 cost operations averaged around 10 .4%. Medium 00:19:35.329 --> 00:19:39.349 costs were at 12 .5%. And the higher cost operations 00:19:39.349 --> 00:19:42.859 were around 13 .7%. So right in that sweet spot. 00:19:43.000 --> 00:19:45.019 And modern reproductive technologies, things 00:19:45.019 --> 00:19:48.059 like sexed semen and using beef semen strategically, 00:19:48.240 --> 00:19:50.700 they can play a pivotal role in fine -tuning 00:19:50.700 --> 00:19:52.640 those replacement strategies, right? Precisely. 00:19:52.640 --> 00:19:55.240 Using sexed semen on your genetically superior 00:19:55.240 --> 00:19:57.720 females, that allows you to generate a higher 00:19:57.720 --> 00:19:59.559 percentage of potential replacements from your 00:19:59.559 --> 00:20:02.160 absolute best cows. Focus the genetics. Exactly. 00:20:03.119 --> 00:20:06.269 Conversely... Employing beef semen on your lower 00:20:06.269 --> 00:20:09.329 merit cows does two things. It reduces the number 00:20:09.329 --> 00:20:10.789 of dairy heifer calves you don't necessarily 00:20:10.789 --> 00:20:14.190 need. Right. And simultaneously creates valuable 00:20:14.190 --> 00:20:16.950 beef cross calves that can often command a premium 00:20:16.950 --> 00:20:20.029 in the market. It's all about strategically managing 00:20:20.029 --> 00:20:22.569 your breeding program. To optimize both your 00:20:22.569 --> 00:20:25.450 replacement pipeline and the overall value of 00:20:25.450 --> 00:20:27.529 all the calves produced on your farm. You got 00:20:27.529 --> 00:20:30.799 it. Maximum value. So... When we put all these 00:20:30.799 --> 00:20:33.019 pieces together, it really does appear that the 00:20:33.019 --> 00:20:35.480 stars have kind of aligned for raising replacement 00:20:35.480 --> 00:20:38.640 heifers in 2025. For some operations, yeah. At 00:20:38.640 --> 00:20:40.339 least for those dairy farms that are, you know, 00:20:40.359 --> 00:20:43.599 well managed, efficient, and really focused on 00:20:43.599 --> 00:20:45.700 strategic breeding. That's the key takeaway, 00:20:45.819 --> 00:20:48.180 I think. The combination of the super high purchase 00:20:48.180 --> 00:20:50.259 prices and the really constrained availability 00:20:50.259 --> 00:20:54.059 has created a genuinely favorable economic landscape 00:20:54.059 --> 00:20:56.000 for raising your own replacements. Yeah. The 00:20:56.000 --> 00:20:58.299 potential for significant cost savings is just 00:20:58.299 --> 00:21:00.819 undeniable. And then you add the ability to implement 00:21:00.819 --> 00:21:03.539 targeted genetic selection that offers a long 00:21:03.539 --> 00:21:05.740 -term competitive edge you simply cannot buy. 00:21:06.039 --> 00:21:08.420 That comparison our sources made really sticks 00:21:08.420 --> 00:21:10.420 with you, doesn't it? Which one was that? The 00:21:10.420 --> 00:21:13.940 purchased $3 ,000 heifer might need to produce... 00:21:14.240 --> 00:21:17.640 a staggering 24 calves just to reach the breakeven 00:21:17.640 --> 00:21:21.359 point 24 whereas a genetically superior home 00:21:21.359 --> 00:21:24.039 -raised animal starts contributing to your bottom 00:21:24.039 --> 00:21:27.059 line much much sooner it truly forces you to 00:21:27.059 --> 00:21:29.539 ask the question doesn't it can producers really 00:21:29.539 --> 00:21:32.680 afford not to be actively raising their own replacements 00:21:32.680 --> 00:21:35.279 right now especially when especially when their 00:21:35.279 --> 00:21:37.480 competitors are likely strategically building 00:21:37.480 --> 00:21:39.759 future profitability through their own proactive 00:21:39.759 --> 00:21:42.869 breeding programs as we speak yeah Definitely 00:21:42.869 --> 00:21:45.549 some crucial points to ponder there, folks. So 00:21:45.549 --> 00:21:49.089 the core message here seems clear. For well -run 00:21:49.089 --> 00:21:51.809 dairy operations, raising your own replacement 00:21:51.809 --> 00:21:54.470 heifers in 2025 presents some incredibly compelling 00:21:54.470 --> 00:21:57.190 economic and genetic advantages. Huge advantages. 00:21:57.230 --> 00:21:59.289 We're talking potential cost reductions of up 00:21:59.289 --> 00:22:02.029 to, what was it, 54 %? Up to a remarkable 54 00:22:02.029 --> 00:22:05.230 % compared to mine, yeah. Coupled with that invaluable 00:22:05.230 --> 00:22:07.910 ability to steer your herd's genetic progress 00:22:07.910 --> 00:22:11.210 through targeted selection. Absolutely. And we 00:22:11.210 --> 00:22:13.289 strongly encourage you listening to carefully 00:22:13.289 --> 00:22:15.970 evaluate those key questions we discussed earlier. 00:22:16.250 --> 00:22:18.569 Your farm's genetic goals. Your current labor 00:22:18.569 --> 00:22:22.130 efficiency. Be honest. And your feed cost advantages 00:22:22.130 --> 00:22:24.849 or disadvantages. Put them in the context of 00:22:24.849 --> 00:22:27.390 your own specific operation. And be sure to take 00:22:27.390 --> 00:22:29.609 a close look at those crucial benchmarks for 00:22:29.609 --> 00:22:32.500 heifer program success too. Understanding your 00:22:32.500 --> 00:22:35.359 payback period and your total replacement cost 00:22:35.359 --> 00:22:38.759 per cow. That can provide critical insights into 00:22:38.759 --> 00:22:41.420 the efficiency and the profitability of whatever 00:22:41.420 --> 00:22:43.509 strategy you're currently using. Ultimately, 00:22:43.630 --> 00:22:45.529 it's about critically assessing your current 00:22:45.529 --> 00:22:48.309 replacement strategies in light of these really 00:22:48.309 --> 00:22:50.329 significant shifts we're seeing in the market. 00:22:50.509 --> 00:22:53.670 The dairy landscape is constantly evolving and 00:22:53.670 --> 00:22:56.269 making proactive, informed decisions in this 00:22:56.269 --> 00:22:58.710 particular area. Replacements can have a profound 00:22:58.710 --> 00:23:01.589 and lasting impact on your farm's future profitability 00:23:01.589 --> 00:23:04.849 and its long -term sustainability. If today's 00:23:04.849 --> 00:23:08.829 numbers shocked you, 388 does an 81 for 700 pound 00:23:08.829 --> 00:23:12.690 heifers. 86 .3 % conception rates in top genomic 00:23:12.690 --> 00:23:16.210 tiers, you need to act now. Raising replacements 00:23:16.210 --> 00:23:18.769 isn't about nostalgia. It's about wielding data 00:23:18.769 --> 00:23:21.529 like a scalpel. As David Williams proved with 00:23:21.529 --> 00:23:24.369 his operation, homegrown heifers out -earn purchases 00:23:24.369 --> 00:23:28.009 by 2 .7 lactations. The question isn't if you 00:23:28.009 --> 00:23:30.430 should raise replacements, it's how fast you 00:23:30.430 --> 00:23:33.410 can build your genetic firewall. Subscribe now. 00:23:33.690 --> 00:23:36.730 Next week, we're exposing the robot feeder revolution. 00:23:37.339 --> 00:23:41.039 saving Wisconsin Dairy's $261 heifer annually. 00:23:41.460 --> 00:23:44.279 Until then, this is the Bullvine reminding you, 00:23:44.319 --> 00:23:46.779 in the Dairy Game, you either crunch the numbers 00:23:46.779 --> 00:23:48.119 or get crushed by them.