The dairy sector has lots to look forward to in 2017. The softer prices in 2015 and 2016 have subsided and production is now responding to strong consumption trends. Watch JP Gervais, Vice-President and Chief Agricultural Economist for Farm Credit Canada as he discusses Future Economic Intel and how that will affect dairy producers around the world.
This video was recorded as part of the Tactical Business Workshop: Dairy Producer during the 2017 Canadian Dairy Xpo.
About the presenter
JP Gervais is the Vice-President and Chief Agricultural Economist at Farm Credit Canada. Prior to joining FCC in 2010, J.P. was a professor of agricultural economics at North Carolina State University and Laval University. He also held the Canada Research Chair in Agri-Industries and International Trade at Laval. JP is Past-President of the Canadian Agricultural Economics Society. He obtained his Ph.D. in economics from Iowa State University in 1999.
It has been a deal that has been expected for years, yet it seemed like it might never happen. Never in history has the livestock genetics industry seen a rate of change like it has over the past ten years. With many of the small to medium AI companies being sold, it was only a matter of time before we started to see some of the larger programs either be sold or start to merge to stay competitive. With the July 1st merger between Accelerated Genetics and Select Sires Inc., we see the two companies that partnered together internationally in World Wide Sires become an even greater force to be reckoned with in the US and around the world.
As the dairy industry has evolved rapidly in recent years with the commercial adoption of genomics and sorted semen, margins have become smaller, and profitability became more elusive. Janet Keller, President and CEO of Accelerated Genetics gives her viewpoint on the strategy that led to this merger. “Over time, one of the greatest strengths that our cooperative leveraged was that of vision. The leadership at Accelerated Genetics felt it was time to move swiftly to look at opportunities to partner with another genetic organization that had a similar vision, culture, and organizational structure.” From the staff side of the merger, Janet Keller expands on the decision. “One of our cooperative delegates expressed it well, ‘Now is the right time for our cooperative to make plans for the future and join forces’.” Keller had been hired by Accelerated Genetics at the beginning of this year as their President and CEO after the company had posted a $2.6 million net loss last year.
“The dairy industry, through ambitious research and development, has leaped into a rapidly growing environment that has extended beyond our ability to maintain, much less thrive” stated Vice President Marketing Communications at Accelerated Genetics, Angie Lindloff. With that “Accelerated Genetics has been searching for a partner who could enhance the business and move it forward,” comments Scott Dahlk, Accelerated Genetics Board Chair. “So, it only made sense that the company that it already was working within Europe, Africa, Asia, the Middle East and Oceania would become its dance partner in the US and the rest of the world.”
The discussion between the two co-operatives started with an invitation to talk from Board Chairman Scott Dahlk at Accelerated Genetics to Select Sires’ board chairman Dan Andreas in December of 2016. Given the nature of the agreement between the two companies in World Wide Sires and its co-operative structure, Accelerated had a limited number of potential partners, and ultimately that is why Select Sires become the obvious partner going forward.
From there the discussions continued between the two organizations’ representatives about how they could work together and structure the deal. Then, on June 13th, as speculation in the industry started to build, the two organizations announced the potential deal that would see Select Sires acquire the assets of Accelerated Genetics, and join the forces of employees and independent sales representatives in each of their geographical member organizations. (Read more: SELECT SIRES INC., AND ACCELERATED GENETICS TO JOIN FORCES). At a special delegate meeting held June 22, 2017, Accelerated Genetics voting delegates voted in favor of uniting Select Sires Inc. and Accelerated Genetics, formally finalizing the agreement recommended by both cooperative’s boards of directors. (Read more: ACCELERATED GENETICS DELEGATES VOTE TO JOIN FORCES WITH SELECT SIRES, INC.)
As a result of the merger, producers will see that “the creation of a larger sire program, coupled with high fertility, will provide all member/owners with more choices at a competitive price. The ability to spread costs over a larger market will enable Select Sires to continue to be the AI leader in bovine genetics, services and research and development. It is a win-win situation for dairy and beef producers across the U.S.” comments Dan Andreas, Chairman of the Board of Directors, Select Sires, Inc.
Similar to when Select Sires acquired GenerVations back in 2014, it is expected that most client-facing representatives will be retained, though in a slightly different structure. (Read more: SELECT SIRES ANNOUNCES THE ACQUISITION OF GENERVATIONS INC. AND SIRE LODGE INC.) Unlike the GenerVations acquisition, where there was a limited amount of overlap with representatives in each region and the two organizations merged into one sales force, it is anticipated that in this merger there will be two separate lineups for representatives of each organization. Given Select Sires dominant sire lineup and genetic programs, this will be a big win for those Accelerated Genetics representatives that have seen their share of top sires go from 6% back in 2015 to under 3% in 2016. With the two merged programs now representing 36% of the top sires, the merger holds 18% more top sires than the nearest competitor. (Read more: STUD WARS EPISODE IV: THE FORCE GROWS STRONGER – 2016, and STUD WARS EPISODE III – THE CONFLICT FOR CONTROL)
Dave Thorbahn, Select Sires’ President, and CEO comments, “It is pretty early to speculate on all staff positions, but our goal is to attract passionate people at all levels of the organization. At Select Sires and Accelerated Genetics, we value people, as they are a leading reason for our success. We also plan to expand the use of the Accelerated Genetics production facilities in Westby, Wisconsin and will retain employees to accommodate that growth. This also provides opportunities to office employees as well, to support the production, product management, and operational efforts.”
With the merger also comes speculation about what this means for World Wide Sires. Thorbahn comments, “World Wide Sires is one of the most respected sales organizations in the world. It has been very successful in growing sales and has represented both Select Sires and Accelerated Genetics around the globe for years. While World Wide Sires will now be wholly-owned, it does not mean major changes. With one organization now owning all the shares, it will give us an opportunity to work more closely with World Wide Sires and make us more synchronized to better serve the producers around the world.”
For those of you wondering what will happen to the Accelerated Genetics website, which has become one of the most popular resources for searching for sire genetic evaluations, Janet Keller shares with us that “Accelerated Genetics has worked diligently over recent years to provide a resourceful and relevant website for breeders and industry associates around the world. Plans are underway to continue to provide the best information in a timely fashion to people that visit the website moving forward. Dairy and beef sire information, animal health product solutions and cooperative news are just a few of the great resources found on the website. Stay tuned for even greater content.”
The Bullvine Bottom Line
One could very accurately argue that the dairy cattle genetics industry has changed more in ten years than it has ever done before in its history. With that comes the need for organizations to either change or close their doors. When Select Sires was formed back in 1965, it was Accelerated Genetics (then known as Tri-State Breeders) deciding not to join the newly formed co-operative and instead to take their own path. Now, 52 years later, we see these two co-operatives finally merging and further cementing the position of the Select Sires Federation as the greatest force in the dairy breeding industry in the world.
Drawing on the latest research in the psychology of judgment, Glen Whyte will help you will learn to improve your negotiation skills, your influence, and your decision-making process to increase the productivity of your dairy.
This video was recorded as part of the Tactical Business Workshop: Dairy Producer during the 2017 Canadian Dairy Xpo.
About the presenter
Glen Whyte is a lawyer, professor of Organizational Behaviour and Human Resource Management (Ph.D, Yale), and holder of the Desautels chair in integrative thinking at the Rotman School of Management, University of Toronto. He is also currently a visiting assistant deputy minister at the Treasury Board Secretariat, Government of Canada. A native of Stratford, Ontario and currently the owner of a farm north of Port Hope, Ontario, Glen has many years of real world experience in challenging negotiations, and has related expertise in the fields of decision making, risk management, and corporate governance. Recognizing the importance of effective negotiation, Glen knows that great negotiators are made not born.
We had an enlightening moment recently when my Michigan Granddaughter who is studying American History thought it would be fun to Play Canadian History trivial pursuit. Her mother and father did extremely well (both Canadians), but she was disappointed in the gaps in her knowledge. In true Canadian fashion, we apologized for the one-sided viewpoint of this Canadian game and urged her to seek historical bridges between the two countries. We found it. It is in our agricultural roots as descendants from farmers. However, it didn’t take much reminiscing until we came to this conclusion.
Farmers — on both sides of the border —
have a lot in common with each other.
And there is a lot that isn’t in common with anyone else!
Farmers are Odd
It seems that any time we look into our farmer past; we always land on one of those one-of-a-kind memories. The phrase “hard to believe” is the golden grail of family farmer stories and it seems that every generation has many to draw on. We love to see the looks of disbelief, when a story starts out with,” There was a farmer…” As I seek to polish my farmer’s wife role in tandem with writing for The Bullvine, I have a growing file on the oddities of the dairy farmer. Some of them are scientifically proven, others go beyond science to the undeniable truth which is found, of course, through four decades of marriage to a farmer.
Even Oddities Can Be Measured
Today everyone wants proof. Thankfully some farmer oddities can easily be monitored by the speed at which they occur. When it comes to walking, farmers are faster. When it comes to talking, farmers are slower. I haven’t had the opportunity to simultaneously test the two, but we all know that, when something unexpected is happening two fields away, the farmer is off and speed walking to the rescue. After the emergency is taken care of, the final five-word assessment of the successful outcome almost always seems to take longer to say than it took him to get to the scene. “She wasn’t due until tomorrow!” Apparently, the slowness of the delivery adds to the significance of the pronouncement.
Farmers Have an Odd Sense of Hearing
When I got the opportunity to join a farm family, I was mightily impressed by the attention they gave to listening. Coming from the fast forward of a house construction family, it was delightful to be heard at the board room table, which like farmers was also the kitchen table. However, not only do farmers listen better, farmers think about what you say. If I was prone to wild pronouncements in my early farm days like “that looks easy” or “I could do that,” it would quickly earn me the privilege of becoming more farmer-like myself. To this day, handy experiences magically appear to prove whether I actually have managed to fit in with these odd folks. You see, real farmers are not only hands-on, but they are also hands in. Most things non-mechanical will only get you dirty or smelly but it’s a fact that farmers get the oddest satisfaction from going beyond hands on to get up to their elbows in mud, dust, manure or baby calf deliveries. I’ve done most of the dirty jobs, but I usually try to have water, rags, and soap on hand for the inevitable clean-up.
Odd Sense of Smell
Which brings me to the biggest oddity that sets farmers apart — their smell. No. I don’t mean their sense of smell. It goes beyond that. You too probably know one of those odd farmer dudes who is absolutely convinced that he is still huggable even when he is covered head to foot in manure, and other unidentifiable ride longs gathered on his around-the-farm journey. That charm can only go so far. However, it also makes him a prime candidate for diaper changing, should the opportunity arise. But first, you have to convince him that he notices it. Remember farmers are odd. They love those dairy airs perhaps a little more than smells coming from their dairy heirs. Truth be told, I have learned to accept that oddity, until or unless it invades my car or suddenly wafts down to where I’m sitting in the church choir. “What is that smell?” remains a subject of investigation, but somehow or another folks are learning to check out that guy up there in the men’s section. You know the one with a little bit of something on his shoe. As for the car, I must be a real farmer. The other day, the neighbor surreptitiously put the window down when I was driving her to a card party. Farmers are odd!
Farmers Are the Oddest Volunteers
Although hubby’s family have lived on this farm for 101 years, there seem to be less and less farmers in the surrounding community every year. Having said that, if you want to test how many farmers belong to the group you’re volunteering for, whether it’s Lions Club, community theater or any other group that needs a big effort, just call a work bee, and the conversation you hear will quickly tell you where the odd farmers are.
Farmers cannot get together – ever – and not have their conversation start somewhat harmlessly with the weather and then turn to a variety of farm related experiences that most of the neighbors wouldn’t touch with a ten-foot pole.
Of course, I have proof. Recently, when setting up tables for the Annual Ladies Salad Luncheon, I clearly overheard two of these odd fellows as their conversation moved easily from broken water mains to mastitis. They didn’t have any concern that their heartfelt problem solving might not be entirely appropriate to the rest of the team who was preparing for white tablecloths and teaspoons. If this occasionally happens to you, remember farmers are a declining breed. It is best to make sure your normality meter can handle a conversation that is as free-wheeling and organic as the food they produce.
Dairy Farmers Produce Experiments
When I am spending time with my city friends, that’s when I notice that they are oblivious to the excitement that being married to a dairy farmer can entail. Although I don’t think my hubby actually plans to scare me, nevertheless I sometimes feel that he ponders the deep question of, “Let’s see if this will go through the washing machine!” more frequently than his innocent expression is intended to display. Although the quantity of rattles and bangs has started to decline, I still experience the mystery of discovering everything from binder twine to invoices in the washer. This recurring problem would be eliminated if the machines didn’t get turned on without inspection. But remember farmers are hands on. They are not hands- emptying-the-pockets-first on! Then, of course, there is stage two. “If it makes it through the wash, let’s try drying it.” Ear tags, cotter pins and anything else that can be zipped into a pocket to keep it safe will eventually send you running to the crash banging of the clothes dryer. “Well it may not be safe anymore, but it sure is dry!” (This is delivered slowly and with an eye on the nearest exit). Odd indeed!
Farmers Remember Differently
I have learned from being married to a farmer, that there is satisfaction in repairing and maintaining the family homestead. In the past 100 plus years, there are unique stores of items all over the farm that can be used for landscaping. Family history wouldn’t be the same if we didn’t join around the fire pit to hear the tales of days gone by. So, when I needed some especially flat stones for edging, I was told to drive the front end loader to the rock ridge. Well, folks. After one hundred years, the rock ridge is no longer rocky or a ridge. Thanks to erosion, tree harvesting, and rock picking, it is currently only slightly more than a rise in the rolling terrain. However, if you have to ask for more defined directions, the ensuing argument ranks right up there with trying to create a mountain out of an old hill.
Likewise, when you think it’s time to replace a split rail fence that has seen better days, you better get approval from any guys still living that had a hand in building it. “Dad and I built that when I was fifteen. We hauled all those rails from the bush to the barnyard. It is not only beautiful, but it’s also part of our history!” Yup. Farmers remember things differently. They’re odd.
The Bullvine Bottom Line
As the sun sets each day beyond the now empty milkhouse, I often reflect on the myriad of ways that the man I married is different from the men and women I meet in corner offices. Although he is comfortable there too, he really shines when he takes a farm project into his own two hands. Today that might have more to do with writing and consulting, but he always comes home to the farm and delves into the next ‘real’ work that needs doing. He’s there when the neighbors need help training calves. He’s there to build tree houses and forts with his grandchildren. He works hard. He sometimes smells funny. He loves the land and his long, long days almost as much as he loves passing on his long, long history to the next generations of his family.
We all want to pay our bills. After all, most people don’t get a great feeling watching debts accumulate. But things happen unexpectedly and, suddenly, you can’t make payments for everything on time. Although you need to correct things quickly, making an ill-considered decision may mean wasted speed and wasted money!
When milk prices decline, the quickest response is to immediately cut an expense!
Most often, somebody else’s bill becomes the first target: vet; nutritionist; feed supplier. What may be overlooked in this quick decision, are the positive ways these providers and consultants can contribute with solutions for the tight cash flow problem. It is short sighted to think that changing nutrition or health from monitored and managed to least cost or elimination will be the best decision. It is in everyone’s interest to work together to make the dairy profitable.
“My Business is the First Priority.”
Take note the important word is “business” not “bottom line.” Although the two may seem inseparable, a well-run, well-planned dairy business always comes ahead of dollar based decisions only. Focusing on how you run the dairy will absolutely pay off to the bottom line. Focusing on the bottom line could mean a savings today that is irreparably costly tomorrow. If you choose to cut something out of the chain, you may also be cutting profits due to losses from sick or dying animals and the resulting lost production and expensive solutions.
Everyone in the barn lane …. better be prepared!
This is not to say, that everyone in the dairy lane should be kept on your team. You want your cows to produce. Your consultants and suppliers should contribute to that goal too. Let’s look at bills from both sides now:
The Nutrition Bill:
Engage a nutrition company that is willing to work with you not simply there to sell you product. Make sure the nutrition company has a proven track record with dairies your size. The biggest is not always the one interested in solving your problems. Find a nutrition company who has a person willing to check every cow – in the pen – from input to output, including manure. You want to be presented with choices that have actual measurable outcomes, beyond the quick, “our price is lower!” answer.
The Vet Bill:
On the one hand, if the bill hasn’t changed much it may seem to be the easiest to complain about and then the easiest not to pay!
On the other hand, if the vet bill is actually higher than it’s been before, finding the reason is crucial, or you could be throwing the baby out with the bathwater. It’s one thing if a business is solving its own cash flow crisis by charging higher rates, but if there are rising health issues or ongoing medication or medical emergencies, these need to be identified with both action and financial planning. Sometimes it’s a talk about brand versus generic medicines. Perhaps it’s as simple as reducing the age at first calving. An example recently cited a dairy farm where age at first calving was 28 months. The suggestion given by the vet was that lowering that number to 23 months would pay the vet bill for an entire year. What can you do better?
Are you Saving Money to Lose Money?
Perhaps you haven’t cut out the expertise on your team, maybe you have inserted your own. When saving money, sometimes it seems that I did it myself is a good solution. Some dairies mix own detergents, teat tip, pipeline cleaner. Great! If it works! However, if the SCC raises the dominoes mentioned earlier start falling: SCC rises and you don’t get premiums
Don’t Get Caught up in the least Cost Solutions
Don’t get caught up in finding least cost solutions: whether they are yours or someone else’s. You decide to make little changes … cut back a couple of steps in corn growing schedule … less yield. Lower quality corn silage …. Once again the dominoes start falling as a monetary cut back in the spring could cause significant financial losses during the winter.
What Effect is Loyalty Having on Your Bottom Line?
Every dairy farm has loyalties. Those include a best friend, twenty years or more of service, a hunting buddy or a next door neighbor. These can all be rewarding but let’s look through the lens of business. It all comes down to cash flow and the bottom line. Goods and services are on the expense side of the ledger, and every manager must determine if loyalty is maximizing or draining this return over cost.
A sound financial plan will identify both sides of this relationship: “whom do you need the most?” and “Who needs you the most?” Write each supplier line down and assign a priority: labor, vet, nutritionist, feed supplier, equipment supplier. Which ones are first and last on the list of improvements you a targeting to improve your bottom line. Do you have every latest product line or piece of equipment from the supplier you’re loyal to? What does it cost you? Is there a way to balance what you are buying with the effect it has on making you more efficient or productive? When was the last time that a consultant suggested modifying or cutting back to get through a downturn? Again… these must be measurable results, not just heartfelt feelings.
Whom are you Going to Cull? Do you keep Unproductive Cows Too?
It is perhaps easier to cull people sending bills to your inbox than it is to cull cows in the milking line. However, both are an important part of your cash flow (story). Herd turnover and the milk quality produced not only affects the price received for the milk you send out, it financially impacts every step from calf to the milking line. How much money are you spending on raising calves that will never produce? Consider all your options from breeding programs and sexed semen to setting up defined culling strategies. Put your money where the milk is long before the animal is in the milking line.
All cows are not created equally profitable! All numbers are not created equal.
Don’t live or die, meaning kill your business, by blinding maintaining some magic number of total cows on your farm. Are you keeping everything to maintain a number that you consider ideal? A pen of sick or low producing animals is costly. Not only because of the effect on the net return over feed per day but also because of the potential for sharing their diseases. Furthermore, the time and attention and FEED took away from better-producing animals is money and time wasted.
Planning for the Future means Planning to Survive.
In every business success hinges on finances. You may be willing to have a less flashy lifestyle, but you must always pay the bills. How can you generate more income? How can you hold costs under control? Revenue maximization is a planned response to both rising or falling milk prices. It is a major challenge. The up and down cycle of change occurs every two or three years. Producing a product that garners a premium is one of the few ways a producer can affect the milk price received. Having a plan in place for both events is the only way to manage this volatile business. Following a plan, will make surviving any crisis more likely.
The Bullvine Bottom Line:
Suppliers, vets, and consultants have bills to pay as well. Nothing in the dairy industry happens in a vacuum. If everyone reduces feed supplies, stops vet visits and decides to put the cows on a “recession diet,” the domino effect will go into play. Soon there are expensive health, feed, and sourcing problems, that are even more costly than the initial lower milk price or cash flow crisis that prompted the short-sighted response. Everyone in the dairy chain benefits from looking at diary bills from both sides now!
What do consumers think of Canadian farmers? Recent studies tell us that consumers appreciate and respect farmers’ efforts to produce healthy, affordable, safe food for Canadians. But to maintain the strength of the Canadian farm brand and consumers’ trust, farmers must continue to be brand champions for their own farms and their industry, says Len Kahn, CEO of Guelph, Ontario-based Kahntact Marketing. In this presentation, Kahn discusses the important roll individual dairy farmers play in creating and supporting the Canadian dairy brand and shaping consumer perceptions of dairy products. Kahn also addresses the controversy surrounding the new Dairy Farmers of Canada brand campaign. Many farmers have expressed displeasure with new television commercials as well as the reduced emphasis on the traditional “Blue Cow” imagery. Kahn notes that television commercials and logos do not constitute a brand. What farmers actually do on their farms is more important – everything from how clean your barn is, to your involvement in the local community, and the farm sign at the end of the laneway plays a significant role in shaping consumer attitudes.
This video was recorded as part of the Tactical Business Workshop: Dairy Producer during the 2017 Canadian Dairy Xpo.
About the Presenter
Len Kahn, Managing Director of Kahntact Marketing From a solid start on his family’s Ontario dairy farm and cattle export operation, Len took his passion for farming to the business world. Moving quickly from a valued employee for agri-businesses such as Chase Econometrics, Cyanamid Canada and Ginty Jocius and Associates, Len started Kahntact Marketing in 1994 and grew the business to 20 people and $5 million in annual revenue. After a merger with AdFarm Len brought Kahntact back to the agricultural marketplace and has developed strategic marketing plans for Agricorp, Bayer Animal Health, Bayer CropScience, DFO, DuPont and others. Len has been active in the autism community in Guelph, and has served on several Board of Directors.
I didn’t see all the rounds of voting for the new leader of the Conservative Party of Canada, but my ears did ring to attention when the subject of supply management was discussed by the election night panel. “It affects only 11%.” That phrase and the notion that it was too small a portion of the electorate to be an election game changer went by very quickly. I remember thinking. “Yes, it’s a small group. But there are so many others affected by that small group.
Food Chain Lingo Should Not Be Disparaged
“From Farm to Fork” and “From Stable to Table” are popular lingo used in support of the good chain. When analysts decide the group is too small to have national, or political, significance they are writing off a much larger group than just the primary providers. From the stable to the table applies to all the suppliers, consultants, financial institutions, truckers and grocery stores that make a portion of their living from the sustainability of the dairy industry. And that’s not to mention consumers. Too often that silent majority also gets overlooked in the hoopla of election forecasting and numbers analysis.
Who is Andrew Scheer? Why Does He Care About Supply Management?
On May 27th, Andrew Scheer, Regina-Qu’Appelle MP, became the new leader of the Conservative Party of Canada. He pulled ahead of Maxime Bernier to win. Once again, the modern day election results of “By a slim margin” came into play. A CBC article quoted Franck Groeneweg, a grain farmer from Edgeley, Saskatchewan as saying “It was a nail-biter to the end.” Hindsight being 20/20 political pundits are now saying that Scheer seemed to have the support of many (dairy) producers” and that made the difference.
The Rural Vote Rallied Around Scheer
Election platforms come and go and sometimes the ones that win never get put into action, but Andrew Scheer voiced support for supply management and for abolishing Prime Minister Trudeau’s carbon tax. Rural voters took notice of what he claimed and also were not as supportive of Maxime Bernier’s statements that he wanted to abolish supply management. Thus the expected winner became the election-night loser.
Who Likes Him Now?
The Dairy Farmers of Canada (DFC) also proclaimed its support for the new leader in a congratulatory post.
“Dairy Farmers of Canada would like to congratulate Andrew Scheer on his win in the Conservative leadership race,” says the DFC post. “Mr. Scheer was supportive of supply management as a Member of Parliament, and has continued to be supportive throughout this leadership campaign; on behalf of all Canadian dairy farmers – thank you!”
Farming Is a New Political Game Changer
It hasn’t been that long since we wrote about the turmoil, rural interests are causing for US President Trump (Read more: Trump Fabricates False Dairy War with Canada – US Dairy Farmers Stuck Paying the Price). Whenever two or more people gather together to solve the problems of the world, you can be sure that Trump’s position on NAFTA, supply management and Canadian impact on Wisconsin dairy farmers, will be a hot topic. It isn’t surprising then that the Conservative Party had to choose who they felt was ready for that challenge on top of putting their agenda in the forefront of Prime Minister Justin Trudeau’s government.
The Winner Had a Farm Strategy
Over the coming months, there may be many who try to determine how someone from a smaller province like Saskatchewan can rise to political prominence or even become Prime Minister. As Scheer himself put it in an interview, “John Diefenbaker did it.” and he obviously has his eye on the prize. Ag supporters noted that, throughout the campaign, he valued the needs of farmers. He campaigned in Quebec where he met directly with dairy farmers and earned the support of many of them. His strategy worked, and now he will be using those insights to power his opposition in Parliament.
So Who’s TOO SMALL Now?
We all love to read statistics that confirm that our position – political or otherwise – is the most popular. I know I’m not the only one who is wondering why election polls seem to be missing the mark more and more often these days.
I think pollsters are asking the wrong questions of the wrong people. They are so immersed in the take and take of traditional politics that they are missing the shifting mood of the times. No one would ever call election campaigning and international politics as “normal, ” but we keep trying to look at modern issues through the distortion of the past. Bluster, bravado, and name-calling have risen to new heights. In the real world, there are many who don’t conduct themselves this way. Nevertheless, they want their position to be acknowledged on the world stage. That’s when what they would do themselves is sublimated, and they vote for the candidate who can get the job done. If they think it takes bluster, they mark the “X” for that manner of candidate. If they are against smooth, big money politics, they put their vote where the candidate doesn’t spout those values. It doesn’t make a huge number to make the winning difference in an election. Twenty-five percent of the population is a landslide in most modern elections. Winning agricultural support is not often considered a mainstream election platform. Yet it is a good strategy when it brings out the passionate group who is ready to challenge mass production, mass advertising and mass conformance to money issues. The average voter – him or her— are ready to take the unlikely route when choosing who best represents what satisfies their average needs. That’s where majority wins are made.
Speak Up and Stand Up for Agriculture
There are so many times when headlines regarding agriculture broadcast the negative (Read more: Country vs. City – Bullying, Rejection, and a Total Lack of Understanding). It is refreshing to see a high-profile opportunity to celebrate the positive values of producing healthy food products. The challenge for Andrew Scheer will be where he goes with this foundation of support. He saw the sector and recognized that they wanted their voice heard.
The Bullvine Bottom Line
It wasn’t a landslide victory for Andrew Scheer, but many analysts feel his insight into supply management did make a difference! Now let’s see if he will continue to do so on Parliament Hill.
Successful dairy cattle breeding is about using the facts available including the degree of trust that can be placed in the numbers. The facts used by breeders can vary all the way from in-herd observations, to show results, to including actual performance and genetic evaluation indexes. This article will deal with the genetic evaluation indexes that are based to a great extent on an animal’s DNA analysis. Often just referred to as ‘genomics.’ In this article, The Bullvine will cover details, from recently released studies and articles. We will look at how genomic evaluations are adding trustworthy information to the toolkit that breeders can use to advance their herds genetically.
1) Accuracy
Before there were genomic indexes, there were parent average genetic indexes (PA’s) for heifers that did not have their performance (production and type) records of for bulls that did not have daughters with a performance recorded. The prediction accuracy for PA’s was low, standing at 20-33%. Breeders knew that there would be a wide variation from the PA numbers, once performance data was added in.
In 2008, based on the study of the DNA profiles of daughters proven sires, genomic (genetic) indexes were published by genetic evaluation centers that used both pedigree performance information and an animal’s DNA profile. Immediately the accuracy of the genomic indexes doubled (60-65%) those for PA’s. Of course, this was lower than the accuracies for extensively daughter proven sires, but a significant step forward.
Alta Genetics has recently published an excellent article on the accuracy of genomic index predictions – “How genomic proofs hold up.” The study compares genomic indexes at the time of release as young sires and what their indexes are in April 2017.
The study reports:
Young sires released in 2010 2014 decreased by 171 vs. 52 in TPI and by 151 vs. 74 in NM$.
For the 1078 US A.I. Holstein bulls released in 2013, their April 2017 indexes decreased on average by 99 TPI and 103 NM$. The degrees of change for TPI were: 4% of bull lost more than 300 TPI points; 9% remain, in 2017, within 20 TPI points of their 2013 indexes; and 19% increased in TPI from their 2013 to 2017 indexes. For NM$: 2% on the bulls changes by more than 300 in NM$; 9% were within 20 NM$ in 2017 of their 2013 indexes, and 9% increased in their NM$ index.
Definitely, there was an increase in accuracy of prediction of genomic indexes from 2010 to 2017.
Take Home Message: With each passing year, breeders can place more and more trust in the accuracy of genomics indexes. As more animals have their DNA profile established and as more SNIP research is conducted breeders can expect to see further increases in accuracy of genomic indexes. Also, there will, in the future, be the publication for additional genomic indexes for specific fats and proteins, for lifetime performance and for health and fertility traits.
2) Improvement Rates
CDN has recently reported on a study “Analysis of Genetic Gains Realized Since Genomics.” This study compares two five-year time periods: (a) animals born (2004-2009) immediately prior to the existence of genomic evaluations; and (b) animals born (2011-2016) after genomic evaluations were available to breeders.
The rates vary by trait with the range in compared indexes being from a small improvement rate to over 500%. Note that in Holsteins the rate of genetic gain in protein %, lactation persistency (LP), daughter fertility (DF) and milking temperament (MTP) went from negative to positive. In Jerseys LP, MSP and daughter calving ability (DCA) went from negative to positive, yet metabolic disease resistance (MDR) went slightly negative. Similar rates of improved genetic gains were achieved by both Ayrshire and Brown Swiss breeds.
Take Home Message: Congratulations to the breeders for trusting and using the genomic index information to make faster rates of genetic improvement. A word of thanks goes out to the genetic evaluation centers all over the world for doing the research on and implementation of genomic indexes. The very significant increased rates of genetic gain may not be duplicated in the future for all traits as breeders are now selecting for many new economically important traits not previously evaluated and published.
3) Terminology
It is a known fact that the term ‘genomics’ has not always been interpreted correctly by everyone.
Over forty years ago, when genetic indexes were first published, frequently breeders thought of them as only being for production traits when they were available for both production and type traits. Today many people refer to genomic indexes as only being for production traits when they are available for production, type, fertility, health, other functional traits and total merit indexes (TPI, NM$, …).
Take Home Message: Interpret genomic indexes to be genetic indexes that include both pedigree and DNA profile information. Breeders can find genomically evaluated sires for all traits at all A.I. studs. Breeders can use one or all the genomic indexes as part of their herd’s breeding plan.
When selection is practiced in a population, it results in a concentration of good genes and thus inbreeding. So, inbreeding is a natural outcome of selecting the best and eliminating the rest.
Every 1% increase in inbreeding results in $22 – $24 less profit over a cow’s lifetime.
There is not a magic level of inbreeding to be avoided. The current average level of inbreeding in North American Holsteins is 7-8%.
A Midwest US study shows that superior inbred high genetic merit cows are more profitable than inferior genetic merit non-inbred cows.
The average inbreeding level of the top 25 NM$ (April ’17) daughter proven Holstein sires is 7.9% for genomic future inbreeding index (GFI). For the top 25 NM$ genomically evaluated sires the average GFI is 8.2%. Having genomic bulls with a higher level of inbreeding than proven sires is as expected when selection pressure is high, when generations are turned rapidly and when there is extensive focus placed on a single total merit indexes (NM$ or TPI or Pro$ or LPI or …).
Take Home Message: A.I. sire mating programs are designed to take into consideration the level of inbreeding of future progeny when a sire x dam is recommended. If a Holstein sire has a GFI of 9% or higher a breeder should require that that bull should have positive proof values for all of DPR, HCR, CCR, LIV, PL, SCC, immunity and calf wellness. Breeders should use and trust that inbreeding is being handled by sire mating programs.
5) Functional Traits
At the same time, as genomic evaluations became available, breeders started paying attention to a host of functional traits. These traits have economic significance and include milk quality, fertility, heifer, and cow health (immunity, wellness, disease resistance, livability, …), birthing, productive life and mobility. In the future, these functional traits will be expanded as on-farm data, and DNA profiling on animals are recorded and farm data is sent to data analysis centers. Noteworthy is the fact that animal wellness and welfare will be front and center for consumers of dairy products.
Take Home Message: Breeders can trust in the published genetic evaluations for functional traits as animal DNA profiles play a significant role in increasing the prediction accuracies from 15-25% to 60-70%. Functional trait improvement will require that breeders pay attention to both genetic and farm management.
6) Feed Efficiency
Feed accounts for 50-60% input costs for heifers and cows on dairy farms. Any gains that can be made by selecting genetically superior animals for their ability to convert feedstuffs to milk and meat have the potential for breeders to make more profit.
Research and data analysis are underway or nearing completion in many countries including US, Netherlands, and Canada on using DNA data combined with nutrition trial data to produce genomic indexes for feed efficiency. Other trials are underway to electronically capture on-farm data on feed intake, dry matter intake (DMI). It is a well-established fact that level of production is highly correlated to DMI.
CDAB has just published that “AGIL/USDA has demonstrated the feasibility of publishing national genomic evaluations for residual feed intake (RFI) based on the data generated by the 5-year national feed intake project funded by USDA National Institute of Food and Agriculture (NIFA), involving several research groups”. “The next step for CACB is to develop a proposal on how to collect data for use in genetic analysis for feed efficiency.”
Take Home Message: There will be genomic indexes for feed efficiency likely with 2-3 years. Once again breeders will have a tool they can trust into breed animals that return more profit.
7) Breeder Acceptance
A.I.’s are reporting that 60 to 90% of their semen sales are from genomically evaluated bulls. That fact on its own says that breeders purchasing larger volumes of semen are putting their trust in genomic evaluations. However, breeders wanting daughter proven sire proofs need to be given that option provided they are prepared to pay extra for their semen.
Take home message: Breeders check books tell the whole story – Genomic Evaluations are trusted.
The Bullvine Bottom Line
In less than a decade the use of DNA data in genetic evaluations has gone from unknown and not understood to a trusted source of very useful information. Having genomic indexes has given breeders the opportunity to advance their breeding programs, their herds, and their on-farm profits. Trust in information is important to dairy cattle breeders and they have and will continue, in the future, to place their trust in genomic indexes.
In this presentation at the 2017 Canadian Dairy Xpo, Ken Nesbitt, Financial Advisor – Nesbitt Financial Strategies, provides valuable insight from his own experiences working with farm families, Ken helps you avoid the most common mistakes when planning your own farm Continuation Solution.
This video was recorded as part of the Tactical Business Workshop: Dairy Producer during the 2017 Canadian Dairy Xpo.
About the Presenter
Ken Nesbitt, Financial Advisor at Nesbitt Financial Strategies Inc. Ken Nesbitt’s background includes over 30 years’ of experience in the financial services industry with a special expertise in creating plans that help keep the farm and the farm family together. Specializing in comprehensive financial planning for retirement; insurance and risk management for families, small business owners, and farm businesses, Ken and his team have created a simplified process to help provide farm families with their own Personalized Continuation Solution for their operation.
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