What is the gain/day going to be? By my calculations from OCT 1 to Mid May is about 225 days. If they gain 1 lb./day then your cost of gain is $2.15/lb. You could take them to a feedyard for less than that per day. However if they are going to gain 2 lbs./day, the cost of gain is $1.07 which is reasonable with feed and corn costs where they are. Look at it like this: Assuming the heifer weighs 550 pounds on October 1st and is worth $1.60/lb at that time. Basis on a 775 pound heifer in mid-May in NE is about -$3/cwt. May Feeder Cattle futures at $155.50 - $3=$152.50
550 lb. Heifer in OCT x $1.60=$880/hd
775 lb. Heifer in MAY x $1.525=$1,118.88/hd
$1,118.88 - $880=$238.88/225 lbs.=$1.06/lb is what the market is rewarding you for adding 225 pounds of gain. Not good considering your cost of gain was $2.15.
However, if they gain 2 lbs./day, then they weigh 1,000 lbs. in mid-May. Using a 4 cent slide means they are $10/cwt back of the May Feeder Cattle futures. May Feeder Cattle futures at $155.50 - $10=$145.50
550 lb. Heifer in OCT x $1.60=$880/hd
1,000 lb. Heifer in May x $145.50=$1,455/hd
$1,455 - $880=$575/450 lbs.=$1.28/lb is what the market is rewarding you for adding 450 pounds of gain. Still not a good deal, but holds the money together better.
These figures are what the futures market is pricing in today. I realize these are probably replacement heifers vs. market heifers but the same rules apply financially speaking. In this scenario, if you can dry lot the heifers and add 450 pounds of gain with a cost of gain below $1.28 it would reward you to do so. Either way $2.15/sounds about double what it should be.