We assume that you are not purchasing the heifers and that they will be brought to you and you develop them to a target weight. You will need to know what they weigh when they are brought to you, and you and the owner must agree on a target weight for the heifers to be before the start of the breeding season. If you are developing the heifers in a dry-lot, then treat it much like a feedlot. There is a cost for feed, and then there is yardage on a per head per day basis. The feed is marked up, and you need to determine this before you begin. This is where the money is made, and it adds value to the feeds that you may have harvested on your farm. Yardage is anywhere from 35 to 45 cents per head per day. Not much money, if any, is made on yardage. Yardage fees are more or less a rental rate on a facility and service while cattle are finished. Two main methods to charge for developing the heifers are:
1) Flat yardage fee.
2) Feed markup.
3) A combination of the two.
The flat yardage fee is the easiest and most transparent, as well as most straightforward. Many times the other two methods are based on an acceptable yardage fee.
Average yardages today range from 35 cents to 45 cents per head per day. This includes facility charge, animal care, feeding, and all services needed. With older facilities, yardage may be a bit lower; however, they are not charging for facility replacement costs in these instances. Of course, feed amounts and costs need to be tracked very closely.
Following is a Web address that has some cattle budgets:
www.ianrpubs.unl.edu. You will need Microsoft Excel to download these budgets. C8 and C9 are heifer-development budgets. Use them to see what it will cost you using your feedstuffs. In addition, this will help you determine the "feed mark-up" to use.
