As the dairy industry becomes more competitive and farms increase in size, economics of the dairy replacement enterprise has become an integral component of farm profitability, and a focus of strategic decisions within the business. The dairy replacement enterprise offers opportunities for decreasing costs, improving efficiencies, and maximizing the quality of animal entering the dairy herd. The purpose of this project is to identify the costs associated with raising heifers and to highlight the critical expense areas associated with raising dairy replacements.