Artificial Insemination (AI) Breeding Cost Calculation Decision Aids
The decision aid is used to calculate the breeding cost for beef cattle AI breeding
describing the breeding protocol followed, artificial insemination costs, and clean up bull
costs. The spreadsheet calculates and reports the breeding cost for all females exposed
and then per bred female. The spreadsheet also provides the calculation associated with
the use of sexed semen for gender selection.
In calculating costs these are full costs including cash operating costs, depreciation of
facilities and equipment, purchased clean up bulls, management and labor and general
and administrative costs. Breeding costs, although important they are less than 10% of
total production cost. This should not be an area to try to reduce costs. The focus must be
on pregnancy - getting the heifers or cows bred and to produce live calves that are market
acceptable and for the females to rebreed. Using low EPD birth weight bull semen and
clean up bulls is of course a good management practice for replacement heifers. Gender
selection adds another value added dimension to AI breeding.
Reproduction is the number one production factor determining cow-calf production
cost of weaned calves. AI cannot overcome poor nutrition and other management factors
that determine pregnancy in beef cattle. This decision aid only addressed breeding cost.
Decision Aids Operation
The data convention is items in blue are user input data all the cell black
numbers are calculated numbers and are protected cells. Other data is from links between
the spreadsheet and calculated values. An example is provided to facilitate use of the
decision aid not as a source of representative date. That is the users’ responsibility.
The AI Breeding Cost Calculator has four sheets that need to be filled to describe
the breeding cost described below.
1. The Description sheet is used to describe the breeding protocols that determine
costs and potential success of the breeding program.
2. The second sheet is used to record production and cost data and calculate the
breeding cost. If sex semen is used the calculations are available to calculate the
expected number of calves by gender.
3. The third sheet describes the Clean up Bulls and generates this cost data that is
linked back to the breeding cost protocol sheet. The labor cost is critical in this
cost analysis. The percent each cost is on total cost shows the importance of each
cost in the total breeding cost. The clean up bull investment is now described.
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*Prepared by: James M. McGrann, Professor Emeritus, Department of Agricultural Economics, Texas
Cooperative Extension, Texas A&M University 8-19-2008.
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Clean UP Bull Investment – Annual Bull and Per Cow Cost Calculation
Purchasing bulls is an investment that is expected to pay out over a 3 to 5 year
productive life. The ownership costs (depreciation, death loss and interest cost) should
be expressed as an annual cost spread over females serviced and calves produced during
the bull’s productive life. Depreciation is the purchased cost minus salvage value.
Salvage value or cull bull net sales value when the bull is culled is a substantial porting of
bull purchase cost it reduces the bull depreciation cost.
The investment in a higher priced bull that can contribute to improved production
of more market acceptable calves and better weaning weight for the cow-calf producer is
not that costly when numbers are put into perspective for calves sired. The bull is an
investment with a long-term pay out rather than just a cash capital expenditure in the year
purchased.
The purpose of this sheet is to the “clean up bull investment” into proper cost and
production perspectives. Annual cost is calculated in terms of the number of cows
serviced. Also calculated is the cost per calf and per cwt. of calf weaned per cow
exposed. This provides incite into what the market would have to pay to justify paying
more for a herd bull that could produce a more market acceptable calf.
The impact on the replacement heifers and bull selection uncertainty is not
addressed in this decision aid. A higher priced bull does not insure the pricing is a
correct predictor of genetic performance. Selection involves more than bull price.
Input Data for Bulls
The key data for this sheet in the decision aid is the bull investment or purchase
cost, estimated salvage value, and economic life. When combined with an interest cost
on capital these are the “ownership costs” of the bull investment. Once the bull is
purchased these are fixed costs and only vary with the salvage value of the bull and, of
course, the productive life. Annual costs include the grazing, feed, and veterinarian cost
including the annual breeding soundness exam.
To calculate cost per cow the number of cows serviced per year needs to be input.
In order to evaluate the impact of number of cows and cost per cow, a sensitivity table is
included. Cost level is quite sensitive to the number of cows serviced and reinforces the
importance of the breeding soundness exam, good bull nutrition, and management. To
calculate change in weaned calf weight needed to pay for added costs, the weaned calf
crop and weaning weight must be input. Weaned calf weight per female exposed is
calculated. The final data item is the projected average market price of the weaned calves.
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Calf Survival and Value
The fourth sheet provides the user the opportunity to input the survival of calves
weights and values. Its obvious that data generated form actual experiences is important
to estimate survival and weaning weight values.
Factors that Determine the Value of Sexed Semen for Beef Cattle
There are a number of factors that will determine the economics of sexed semen over not
sexed semen or natural service including.

Reproduction differences - pregnancy, calving and weaning percentage

Value of calves weaned by sex

Cost of breeding system alternatives – sexed semen added cost.

Ability to capture the difference in value by sex of production – if selling bred
females or the calves produced. This is very dependent on the marketing program
and the ability to capture the value difference in the market place.

All factors above will determine the gross margin (production times price) over
breeding cost for alternative breeding systems. The gross margin over breeding
cost difference is the amount that can be paid for sexed semen.
The address these questions the user needs to know:
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What will the market pay for the different calves by sex?
Genetic potential if the sire differ – semen and clean up bulls.
What will be the difference in reproduction (weaning percent) with sexed
semen?
Evaluate Experiences
The purpose of this decision aid is to help organize the data and do the
calculations and to perform “what – if” analysis. Ideally data will be collected to evaluate
“what really happened” in the production environment. The usefulness of this tool is in
its capability to quickly evaluate different variables. It’s important to change the values in
the blue cells and see what impact the change will have on costs.
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