At first I thought I would write my column about struggles versus opportunities. My idea was something along the lines of a person should take advantage of opportunities to expand horizons, go outside of their comfort zone and learn new things when chances come along. Even when there are roadblocks and struggles, seize the day and go for it.
    This type of advice is certainly put out there a lot during graduation speeches and when people are thinking about what is next in their life. I decided to delve a bit further into the topic, however, when our son, Leif, was home over the weekend. We started talking about the concept of opportunity cost in a conversation about the microeconomics course he is finishing up this semester in college. I asked if he knew how to define it and he readily came up with a good definition. It is a relative cost. The opportunity cost of choosing one possibility is the value of the possibility you gave up. So what you sacrifice, not what you choose, is the opportunity cost.
    I started thinking about all kinds of examples in farming and life where the opportunity cost concept is valuable for making decisions. I realize that an economist’s idea is to include cost analysis and actual numbers with the concept. But I tend to think in words more than numbers. In my own little world of calf-raising, for example, switching calves off their bottles and onto buckets sooner yields more time and less work for me. I don’t really think about labor saved in terms of payment for my work. However, an opportunity cost in doing this might mean that a calf will get sick, and I’ll have to switch her back to a bottle or that some of the calves will be very vocal in protest to being switched to buckets at too young of an age. Then I’ll have to listen to a lot of calf noise during feeding. That, to me, is the opportunity cost of this scenario: are those two annoyance costs actually worth the saved time in having calves drink from buckets sooner? Yes, usually.
    Maybe another all-too-common example on typical dairy farms makes this concept clearer. We have too many heifers to replace the cows in our herd that are culled, and we cannot obtain a price for excess springing heifers that is higher than what it costs to raise them. An opportunity cost is to breed a percentage of the herd to beef bulls so that we can sell the young offspring at a premium to buyers who will raise them for beef. We save the expense of raising heifers we likely will not need. The opportunity cost is not having the larger group of heifers in case disease or some other tragedy would leave us without an adequate number of replacements. Is the tradeoff worth it? Since we have committed to using beef semen to breed the lower genomic portion of our herd, we hope so. It has been many years since we have needed all of the replacement heifers we are raising.
    What about opportunity costs in other life decisions? Our three college students have made choices for how to spend their summers using the concept, perhaps without actually thinking about it. Matthias chose to apply for an agronomy internship to gain important technical knowledge and skills outside of his main area of study, and he will also gain income. The timing didn’t allow for a study abroad trip this summer, so that is an opportunity cost. Leif chose to spend a part of the summer doing a study abroad opportunity in Norway. He will gain a new experience in a different county, college credits and will spend a fair amount on the trip cost. For the rest of his summer, he will work on our farm and make money. He will need to find an internship next summer, so maybe that is his opportunity cost. Emily will do the same study abroad experience and then have an internship at Dairy Marketing Inc. in Rosemount, IL. She will gain new experiences and contacts in her field and make money at the internship. She will spend money going to Norway, but gain an international experience. She said she will miss helping to train and show cows, so that is her opportunity cost.
    So you can see that thinking about opportunity cost in detail can be vital to making good decisions in life and in farming. It has value in the discussion and examination of the details in choices that we make. Maybe the clearest benefits are that it takes some of the emotion out of the toughest decisions and can help negate second guessing.
    Jean dairy farms with her husband, Rolf, and brother-in-law, Mike, and children Emily, Matthias and Leif. They farm near St. Peter, in Norseland, where she is still trying to fit in with the Norwegians and Swedes. They milk 200 cows and farm 650 acres. She can be reached at jeanannexstad@gmail.com.