Monday, February 16, 2015

Competing for recognition as a purebred Jersey breeder

Published May 2008

Within the purebred dairy cattle industry, the most revered position is not to be an AI Stud sire analyst, or recognized University geneticist, or President of a Breed Association board; it is to be recognized as a successful purebred breeder.     Why is this?    Because the purebred breeder with name recognition has done the very difficult job of producing useful seedstock for other dairy herds, while at the same time being successful as a dairyman on home soil.

Most dairymen are pretty proud just to develop a working farm that produces a living for his family and a profit for his total business enterprise.    Entering the purebred side of the dairy business is to suddenly have two businesses, operated simultaneously—one to produce milk at a profit over production costs, the other to produce surplus superior breeding stock from the same herd of cows producing the milk.     In the case of milk production, we generally are able to concentrate on production processes, as there is a milk marketing agency (cooperative or otherwise) available to do our marketing for us.    But in the case of breeding stock, we not only have to succeed at applied biology and genetic selection and mating selection, we have to succeed at marketing.     In this, we have higher overhead expense to “validate” our cattle.

Many dairymen with registered cattle have fine herds of cattle—provide their families a good living—but never make it into the premium cattle merchandising game, thus are never known outside their local DHI or state breed club (that gets a heifer from them every year, for their state club sale).     This can occur for many reasons, but most of them relate to one of these situations: (1) a misunderstanding of how marketing works, (2) a misunderstanding of what the market wants, (3) satisfaction at their current level of local market recognition.

How marketing works

Every established industry has existent within its structure, trade organizations, publications, and consumer advocacy groups.     “Trade organizations” exist to support the needs of those businesses in the industry producing the product; “publications” exist to carry the word about products from the producer to the consumer; “advocacy groups” exist to protect consumers from an excess of advertising zeal over agreed, “proven” value.

Within dairy cattle breeding, the “trade organizations” are the purebred breed associations at local, state, national and even global levels, plus affiliated structures like the PDCA (or, for AI systems, the NAAB).      The “publications” are both generic, as in the case of Hoard’s Dairyman or Farm Journal or Dairy Today, or specific, as in the case of the Jersey Journal or Holstein World or Holstein International.      The “advocacy groups” are USDA’s AIPL (that calculates genetic evaluations), Interbull (that calculates data conversions between countries), University extension,   DHIA milk testing, breed Type appraisal/classification staff, plus independent systems like aAa and DMS.      

Sometimes these lines get blurred—as in the case of a Trade Organization that gets led by an “activist” board to cross the line into Advocacy (ie, preferring one product over another).   In dairy cattle breeding, this happens frequently, and adds to the competitive pressure which all breeders face— his peers can decree his breed goes a different direction than he went.     

But the main points to be grasped are —(1)  Breeders compete with each other for market share, (2)  Both customers and peers define the market trends.      If you align yourself too closely to a single sector of the market, you can lose sight of what is happening in the broad market; if you try to fit the constantly shifting broad market, you lose touch with the sectors that identify with your cattle.    The market is never homogeneous; it buys what it wants.     

Trends similar to consumer marketing drive dairy genetics marketing

The principles of marketing generally apply, whether you sell consumer goods or business inputs.    In the case of milk marketing, we are selling a consumer commodity—but in the case of breeding cattle, we are selling a business input.     So we can expect a little less in the way of emotional decision making when selling a business input than when we are selling a public consumption item—but not as much less than a purely scientific view of genetic value might suggest.    Cattle people get passionate about their cattle—and “passion” is one basic human emotion that is highly motivational, and tends to stay pretty focused over time.

Thus, across the history of dairy cattle breeding, we see production breeders and show type breeders and cow family breeders and bloodline breeders and longevity breeders.    We also see the cows and bulls produced by one sector, successfully adapted to the needs of another sector—suggesting that in the end, they are less “discrete” populations than much of industry advocacy would presume.      We see others that fail outside their close circle.

In Jerseys, an example would be the “Sleeper” line, which was perceived as “show” cattle in the USA, as “longevity” cattle in Canada, but now is the top “milk” sire line in Denmark.     Breeders tend to exclude more often than they include in the process of creating their own gene pools, but this exclusion can work against you long term as much as it focuses you short term.   The nature of biology is to preserve a species—and within that, preservation of a wide variety of genes is preferred.     Likewise, the successful breeder has to be aware of all his options, even if not using most of them in his herd today, because he may need access to solve future problems his current focus creates.     Breeds thrive from gene diversity.       

Advocacy obscures the full genetic potential in the breed population

It has always bothered me when advocacy groups—extension dairymen in particular—started to tell us how to interpret genetic data by “shortcuts”.    For instance—“big udders give more milk”.     If we accepted this [now debunked] conclusion, we suspected and avoided sires that combined superior milk yield with more efficient (shallower, softer textured, and ultimately healthier) external mammary glands.    Thus, we stick to sire lines that make “big udders” a self-fulfilling conclusion.     If the market wants “big udders” you are of course in business—but if the market decides big udders are “trouble”, you can be out of business overnight.

I like to remind people of “the law of diminishing weaknesses”.     For much of recent dairy genetic history, advocacy was in favor of  single trait selection, ie, whatever advocates had decided was most important [milk yield], became the primary selection focus, and all other traits that are not perceived as positively correlated to the primary trait [at various times in dairy history, milk components and type] were excluded as unimportant to “genetic value”.

Advocacy’s opinion was never fully accepted by the marketplace.    If you track semen sales and registration volume histories for various sires across breeds, you will find that high type sires will have many sons registered, following the wider use of sires with visual type faults, high component sires will have many sons registered, following wider use of sires with lacks in butterfat volume.      Individual sires that combine both type and components, might get wider usage than most sires within the “top ten” as ranked by Advocacy.  

What does this suggest to us?     In genetic selection, if you can breed cattle that avoid the assumed tradeoffs to gaining production (‘big udders give more milk”—“milk bulls always lower butterfat% test”—“high type bulls don’t sire any milk”) you gain market share for your breeding cattle.     In marketing, less is just… less.     Multi-trait selection is alive and well, and semen salesmen know it, thus they point out (and sell) bulls who offer more… not less, not in a “ranking” sense, but in a look at all the desirable traits you can get in a single bull package sense.      Ranking never gets further than shortening the list of potential selections.

Advocacy, you will note, is still in favor of single trait selection – they just have replaced the “composite ranking index” over “milk yield” as the single trait.    So formulas appear to rule, combining a bit of milk, a bit of components, a bit of focus type traits, maybe a bit of health traits too—but if the market were not seeking “more” (and could see that the highest ranked sires are mostly plus for major traits across milk, components and type), nobody would use them.    So their value to the breeder who wants to stay ahead of the competition is small, and diminishes as your pedigrees develop in real performance.     Formulas change too often.

Competitive breeders continue to use a matrix selection approach

If your goal is to breed animals that will sell in the top half of sales, or to sell bulls to AI stud and have them succeed on genetic evaluation, you have to do the reverse of what seems to be prudent—you have to ignore the selection index and concentrate selection around matings of animals that combine superiority for all traits in the index.    What do I mean by this?  

[Example]  Your cow milks heavily, well above breed average, but is below average for her level of milk components.    Your cow scores at a decent level, but is too low for individual traits that would allow her a higher score.     She has a decent index ranking, but you see that other breeders’ cows are getting contracted while yours is not.     Your choices are: (a) use the #1 JPI sire, to raise the index of the mating, (b) find a sire who can maintain her superior milk yield, while adding components, and who is strong for the qualities that make her weak in observable type traits.      (a) and (b) more often than not, are NOT the same sire choice.
This often comes as a surprise, but to compete you need to create exceptional cattle, not just replicate what is already available.     The mates [bull + cow] must combine synergistically.

Keep in mind that, in a competitive market, other breeders (who have the cow that combines high production with good components, who combines production with high type scores) are getting the matings to the #1 JPI sire on that cow.    Her uniqueness may be able to cover for the weaknesses sire analysts know the #1 sire possesses—and all sires (even #1 sires) have a weakness or two that create the future excuse for why your cow’s daughter is not “contract mating material”.      In other words, the Jersey world is soon to be saturated with the “Jace” daughters, and a nice “Jace” from a 95% dam with 5.0%bf is going to easily outcompete a productive “Jace” from a 82% dam with 4.2% bf., for breeding market access.

Why?     Because the market does not really want any more “Jace”, having already used him to saturation levels.    But it always wants 95% type and 5.0+% butterfat, and will accept a bit more “Jace” in that trait package        Astute marketers figure out that the “name bull” adds value to the basic commercial cow, but the “trait package” adds premium value to the breeding animal.     Premium pedigree value in breeding cattle is maternally, not paternally derived.     The average “Maid” or “Belle” line female at auction sells at a premium, while the average commercial daughter of the #1 JPI bull sets the sale average.

Competitive purebred breeders focus on maternal line development

It is simple supply and demand—a bull can produce millions of sperm in his lifetime, but a cow can only produce hundreds of eggs.    The basic cost of harvesting bull sperm is maybe $2.00 per dose—the basic cost of harvesting cow ova is more like $75 per embryo.    Biology sets up the bull for short term glamour (due to ranking, prior to our opportunity to use him) and a long decline after market saturation (once everyone has used him), which can occur quite quickly.    Biology thus allows for a much longer term of premium marketing from a superior cow family.     The breeder must capitalize on his cow families, not on “sires”.

Less successful breeders are always afraid to use less than the #1 sire on their “best” cows, assuming that his presence in the sire stack is necessary to marketability.     But what are the AI marketers looking for?     Salable traits.     Concentrate matings on the accumulation of salable traits.    In this, biological genetics works in your favor—quantitative traits are not only additive, but tend to accumulate.    In addition, if you are willing to explore programs like “aAa”, you can also harness qualitative traits in your favor, so as to increase the rates of success with quantitative accumulation, avoiding replication of dysfunctional traits.

Thus, on your best cow, the optimal mating might be #1 JPI—or it may in fact be #21, if the top 20 all share some weakness(es) in common with your cow, that can inhibit marketability as well as an upper echelon index ranking.      In this, we have to be as cognizant of type as we are of production as we are of components as we are of health traits-- because our sire has to compete not just to get into sampling, but to survive sampling as a marketable trait package, three years in the future, when a different formula may define who is #1.

In marketing, it no longer matters what we like best.   The only thing that matters is what a sector of the market is seeking and whether you have the cow whose son can fill that need.  
The mating that produces a successful son from that cow is what you have to identify.

Breeding a #1 sire can ruin your reputation

There are numerous sires that once ranked #1 – you may even have bred one of them at some point in your career as a breeder – but keep in mind how short a time “#1” really lasts, and in some cases, being ranked #1 works mightily against the prefix of the breeder, if that bull sires a weakness that the majority of commercial dairymen decide they didn’t want, and then will blame on your bull (ie, deep udders, or bad legs, or teats on deep udders stepped on by feet in the wrong place due to bad legs, or feet that always need trimming, or frail front ends leading to pneumonia in calves and swollen, collapsing udders resulting in short herdlife).    

The worst thing that can happen is to be too focused on what seems to be the crucial genetic trait—ie, you bought into the “genetic value” purebred paradigm, without fully considering the “make me a functional cow” commercial paradigm first.

Most breeders who attain ranking herd averages, immediately assume their cattle have what “commercial dairymen” want.     They will confuse a high level of [management] adaptation their current herd has in their own environment, producing (after generations of culling) that consistently high level of performance, with superior “genetic value”.

But the biological definition of “genetic value” is economic ability that can move from your herd to someone else’s, and still adapt to that environment.    The question of adaptation is a fundamental biological question of survival.     Your 80 cow herd may function well with the deep uddered cow, because you have modified your facilities and your herdsmanship to keep that kind of cow productive for more than a couple lactations.    But it does not translate well into the broader commercial market, where herdsmanship is focused on (a) reproduction and (b) removing cows that add to labor costs.   Thus the tendency of the better commercial dairy to be more concerned over “type” than the typical index-oriented breeder—they experience that in fact, a lack of type is highly correlated to early culling.    

There is a reason that all breed associations collect type trait data, and have committees that constantly discuss the relative value of trait A over traits B, C or D.     Good type enables a harvest of productive potential.      Type trait problems related to the udder, to feet and legs, and to circulatory and respiratory capacity, prevent a full harvest of genetic potential.   That breeder who wishes to remain competitive and relevant as a seed stock provider, will learn to value type more than the ranking formulas ever imply.     

At the same time, a breeder has to anticipate future needs to remain competitive—he cannot wish for a return to the past glories of simpler days, when all it took to be a popular bull was to be +2000 pounds of PD milk.     The physique needed to survive 100,000+ pounds of life production is more substantial than the physique that was genetically programmed to produce 45,000 pounds as quickly as possible.      Given the implementation of health and fitness trait scores related to the increasing commercial demand for “slower turnover” cows, these are the issues which an astute breeder would study; and if it meant a change of sire lines in his herd to accomplish future competitiveness, the courage to go a different way.

A good breeder understands the difference between a commodity and a branded label

When you joined the Jersey Association, you chose a “prefix” that gave your cattle a brand identity.      Your breeding philosophy is defined in the marketplace by the animals that leave your farm with your prefix attached—your sales pitch no longer applies.    How they perform in the herds of buyers will be the ultimate measure of your success as a breeder.     

It can be a good thing to check up on any animals you send to others.    If you sense they did not experience the success with them you expected, have the courage to ask why, and learn from what they tell you.     It is easy to blame “poor management” on the failure of animals once they leave our farms, but if we see failures in more than one buyer’s environment, we have to ask ourselves some tough questions—are we confusing “herdsmanship superiority” at home with “genetic superiority” in our own cattle??

In mature marketplaces, products become commodities at the point they lose identity within brands.    Thus, wheat is wheat, corn is corn, milk is milk.     The fact there is both red and white wheat, the fact some corn is 20% higher in protein than others, the fact some milk has 40% more digestible nutrients than others, is buried under the commodity definition, unless we take steps to obtain the premium value.    The curse of becoming a “commodity” is that the auction market will only pay you the price that the “lowest cost producer” is willing to accept.     Thus, over time, inflation lowers the real value in purchasing power of most commodities (oil being the current short term exception to this rule).

When you can send your animal to a club sale and receive an above average price for her, you know you have broken out of the “commodity cow” commercial valuation.    Once this happens, you will also find that the competitive bidding for your premium animal will lead to the more profitable opportunity for marketing at the farm gate—the unsuccessful bidder will come to you in hopes of buying one like the one he saw at the auction. 

What is the basic commodity valuation of a cow?    It is her expected beef salvage value plus the present net value of expected future milk flows, plus the expected net value of her calves.    Thus you cannot breed for only milk, or primarily milk, because even the commodity market is in hopes of multiple streams of income from this cow.      

If a cow lacks accepted standards of superior type, her bull calves will only have deacon value (ie, I can’t sell my neighbor a bull from a poor type cow).    Her heifers will only have the commodity heifer value (ie, any added value is dependent on her chosen mating sires.)       Her expected milk value is limited to the normal 34 month commercial Productive Life (5 months longer than a grade Holstein, big deal), which means only two likely calvings after purchase—and one a deacon bull, thus merely one heifer to replace her (and just in time).
Type remains the single best way to elevate your cattle above “commodity” auction value, and the buying market knows it takes more effort to get type with production than to just get production alone.      Index ranking is only marketable when enough type exists to facilitate its replication by your buyer, after the 50% dilution possible from any sire mating.       

Are we using the ultimate definition of “good type” ?

One of the current topics of discussion in the breeding revolves around the lack of apparent  correlation between “PTAT” and “PL”.     The market believes “good type” produces more longevity.    Why does the data seem to deny this in the sire summaries?

Part of becoming a successful breeder is to overcome taking all genetic evaluation data at its face value.     Unless we know the “cause” of a measured trait, knowing the resulting trait score is pretty meaningless.     Cow A scores 90%, refuses to breed back, and is culled—cow B scores 78% and breeds back quickly, thus avoids early culling (until a future reason not yet determined by circumstance).     A single organic weakness can neutralize type values.     

The genetic world is trapped in a view of measurable traits as “two way” in action but “one way” in preferred direction.     We select pluses and we avoid minuses, depending on which traits we take seriously enough to look.     In fact, most measurable traits remain functional only within a median range of expression (ie, “tall enough” is functionally better than “too tall to walk into the parlor”).    Thus our mode of expressing type values has some flaws.

The experienced commercial cattle buyer can be found to consistently prefer a “stronger” looking frame over a highly refined, “stylish” level of dairy angularity.    This relates to all the many health experiences that indicate frailty in the female of any species.     Lots of lifetime functionality can be found within bulls whose lack of compliance with the focus traits leads them to lower type evaluations.     But at the same time, trait appraisers will not score an obviously frail animal higher than the functional and healthy animal that lacks a bit in pastern angle or rear udder height.      Learn to critique “type” on functional priorities.

The issue with type appraisal is that we mostly do it on young, immature cows, and we give the “edge” to the faster maturing of the immature.    In this, “fast maturing” can also mean “faster aging”.     So a bit of common sense is needed to discern the difference, and build into our breeding program a healthy respect for the animal that… stays healthy, regardless of her score (maybe she will earn a higher score at a mature age, knowing she can attain maturity).

“Healthy”—as my chiropractor reminds me—is not the same as “an absence of symptoms”.    Thus we need to maintain a critical eye to our cows, and avoid overvaluing the cows that, while above average in productivity, cost us more labor time and vet expense to keep at that elite level of productivity.     What is manageable in a family 45 cow herd rapidly becomes a herdsman’s nightmare in the 450 cow herd employing most of its labor for specific jobs, ie, Juan milks, Jose scrapes, Manuel feeds calves…   who then gets stuck with the sick and lame ones?     To the extent that “type” anticipates avoidance of sickness, lameness, mastitis from injury, and calving trouble, it has commercial value, thus relevance to the breeder.

“Longevity” is the ultimate result of a competitive breeding program.   If you are attaining it, you are on the better long- term track.    The market will catch up to you.     If you are not, a change in mating procedure and selection philosophy may be what the doctor orders.

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