It has 30 individual pens for calves up to weaning age and group pens thereafter. The feeding program over the 24-month budget period includes milk replacer, calf starter, calf grain, grain, alfalfa hay, silage and six months of pasture. All inputs are valued at current market prices. By assigning a market price to all inputs, it is possible to isolate the performance of the heifer enterprise from other enterprises in the business. Ten percent of the calves born alive are assumed to die during the 24-month growing period.
Operating expenses are outlays varying with the number of heifers supported by existing facilities.
They include feed, labor, veterinary care, medicine, breeding, bedding, supplies, interest on the current period's operating capital, interest on expenses accumulated during the previous growing period and death losses. Ownership expenses are associated with the ownership of buildings and equipment. Such expenses include depreciation, interest on the investment, property taxes, repairs and insurance. Depreciation allowances are intended to represent the decline in value due to wear, tear and obsolescence, and may differ from what is allowed for income taxes. An estimate of the expense required to support the heifer for each month over 24 months is also presented.