Staying top of class by minimizing cow depreciation 

The eight most dangerous words in agriculture are, “Because that’s how we have always done it.” Successful commercial cow-calf producers put an emphasis on minimizing cow depreciation. An operation that develops its own heifers does not have to write a check for depreciation, so it is overlooked. However, by adapting heifer development strategies and capturing value from open heifers, producers can enhance efficiency, increase profitability, and improve herd sustainability.

Rethinking heifer development to reduce losses

Research shows heifers calving in the first 21 days of their first calving season remain in the herd longer, resulting in greater lifetime productivity. However, a significant challenge in heifer development is the open heifer — those that fail to conceive. Open heifers often represent a financial loss when sold in small groups, and cost per pound of weight gain is above the feeder cattle market.

The University of Missouri initiated a demonstration project at the Thompson Research farm in 2022 to address this issue by developing all heifers to a lesser target weight (55%) than industry average (65%). Heifers were exposed to a single round of timed artificial insemination (AI) with no cleanup bull. Open heifers were then placed in a feedlot and finished. 

The cow herd has strong carcass performance history, with steers from the same herd routinely grading more than 50% Prime. This genetic potential suggested open heifers could also achieve superior carcass quality if properly managed. 

Additionally, by finishing open heifers rather than immediately selling them at a discount, the operation gained greater control of its market timing and potential profitability.

Heifers entered the feedlot at 830 pound (lb.), gained 4.1 lb. per day and generated $265 per head in profit.  In previous years, this farm had sold eight-10 open heifers at auction after pregnancy diagnosis. In this demonstration, we sold a semitrailer load of finished cattle to a packer. In addition to the profit from feeding, a 60-day heifer calving season was reduced to 21 days. 

Advantages of developing more heifers

Had drought conditions hit, we could have reduced the number of heifers to breed by selling as feeders. Our feed costs were much more in line with backgrounding, so even if we did have to sell heifers, it would have generated a positive return. In my opinion, making the decision to maximize the probability of a single heifer achieving pregnancy leads producers to spend more on heifer development than what the live weight gain is valued at by the market. Another way of looking at it is investing resources in an unproven “No. 1 draft pick” vs. having a bunch of draft picks. 

Additionally, heifer development costs can be optimized by lowering target weights rather than pushing for maximum growth. Research suggests developing heifers to a more moderate weight before breeding can reduce costs while still achieving acceptable conception rates. This strategy can help producers avoid unnecessary expenses while maintaining herd productivity.

From a financial perspective, developing more heifers offers multiple ways to mitigate risk. Producers who consistently develop more replacement heifers than needed can sell surplus bred heifers at a premium, helping offset potential losses from cull cow sales. Additionally, by tightening the calving season and improving reproductive efficiency, operations can increase uniformity in their calf crop, leading to better marketability and pricing.

Final thoughts

Cow depreciation — the declining value of cows over time — is a hidden cost that often goes unaddressed in cow-calf operations. At the same time, capturing value from open heifers through targeted finishing strategies can help producers turn what would be a financial loss into a profitable enterprise.

Producers who embrace these approaches can improve their economic sustainability while maintaining greater flexibility in their operations. By rethinking traditional methods and making strategic adjustments, they can increase profitability, enhance resilience and build a more efficient beef production system for the future.