The real cost of having too many heifers

 From the March/April CONCEPTIONS Dairy Newsletter

This may seem contrary to what you read everywhere, but I still can hear my Grandad telling a neighbor, “when the neighbors slow down driving by your farm, shaking their heads at what they see, you must finally be doing something right.”    Peer pressure – that social force that got us into trouble during our school years, also has hidebound the dairy industry into replicating high-cost, technology-based operating styles that produce rates of return on investment lower than the costs of financing and depreciation.

 

Nowhere is this discussion more important than in the use of sex-sorted semen, which is promoted as a way to reduce calving problems in heifers (true enough—avoid the big lunker overdue bull calves).   So many dairymen following pre-health trait ranking indexes complained of never having enough heifers to keep pace with herd turnover.    As soon as sorted (female) semen came online, they wanted it and paid significant premiums to utilize it.   Today, the cost of sorting semen at the market level of demand has proven to be a huge financial burden to the AI industry, forcing some merger consolidations. 

 

For those using it who actually already had enough heifers, too often the result is – too high a charge for raising replacements against the value of each cow’s milk production.    Calculated costs of raising a calf to first freshening are in the neighborhood of $2.25 to $2.75 daily, or $1650 to $2000 per replacement.

The market for fresh heifers (given surpluses caused by sexed semen) barely matches the cost of raising them, so we are no better off today than we were in the 1960s, the last time we had a structural surplus in the replacement supply.

 

The “experts”are now telling us to do what they told our fathers not to do

 

Up into the 1960s, most grade dairymen bred heifers to beef breed bulls.    Reeasons: (1) usually an easier calving;  (2) they already got enough heifers from the cow herd, which had more longevity than what the industry is harvesting today;  (3) they did not want to raise a replacement from any heifer they decided not to keep.    Culling of below average heifers was their primary (and practical) method for genetic improvement.   (4) raising heifers only from “proven” cows kept numbers at a level that did not put strain on the milk check, and was always able to maintain desired herd size without buying cows.

 

“Genomic test, breed the best sexed, sell the rest”.    In fact, breed your cows to beef bulls (sell those calves as deacons to capture the beef breed premium) and raise all your replacements from heifers and younger cows, which are your “newest” genetics.   This is the recommendation now for a “progressive” dairyman to follow.     This places total trust in the technology of theoretical genetics for dairy.

 

Except there are consequences.    Here is a true story from Wisconsin.    A large herd bought into a Genomic testing of every calf.    Based on their cow turnover rates they sold the lowest 20% of heifer calves based on Genomic values.    A neighbor was buying all those calves at the sale barn (preparation for herd expansion).   Six years into this effort, the Genomic dairyman saw his neighbor’s herd average now exceeded theirs, SO he dropped in for a visit to see what was happening.

 

“Why do you buy all our cull calves, and how are you getting so much production from them?”   Turns out the neighbor had a longevity-based genetics and mating philosophy, and these “cull” calves proved to mostly be born from his oldest cows—thus carried lower index values, but realized more longevity.

In spite of years of selection favoring ‘fast maturity”, cows that actually achieve a functioning maturity milk 30% more.      Dr Dan Weigel, Zoetis “Wellness”    

Commercially successful AI is 80 years old

 From the March/April 2018 CONCEPTIONS Dairy Newsletter

The artificial insemination of cattle in the USA as a business service began in 1938 in New Jersey under the direction of Enos Perry (NJ Extension dairyman) – who had gone to Denmark to observe and learn the technique they had developed.     The New Jersey Experiment Station was in the process of breeding a high butterfat strain of Holsteins to accommodate the desire of New Jersey milk marketers for higher component content milk than Holsteins were producing at that time.

 

Building genetic value from an inbred base

 

The bull ORMSBY SENSATION (result of breeding a famous 4% butterfat cow to her own son) had a high butterfat progeny list from natural service in a couple famous Midwestern breeder herds.    One of his later sons, Ormsby Sensation 45^th came to New Jersey and continued the family tradition for NJES which proceeded to linebreed by brother-sister matings of 45^th offspring, producing bulls for this early AI effort.   

 

Holsteins that could “test” like Jerseys

 

Within three generations, the descendants of “45^th” transformed the typical 3.3% New Jersey Holstein herd into 4% butterfat producers (without loss of milk volume) with individual cows reaching the 5.0% mark—a level then (and today) considered only possible with “cream breed cows” like Jerseys.

 

The “Ormsby Sensation” bloodline was prominent in the formation of contemporary breeding herds like DUNLOGGIN (Ellicott City, MD—right next door to the USDA Beltsville experiment farms where the USDA sire summaries were calculated).    Besides high butterfat % these lines proved to be the ultimate in “longevity” – two characteristics that “Dunloggin” bloodline sires passed around the country with the advent of the A I industry across the nation in the model of the pioneering NJES service system.

 

Still possible today – “what goes around comes around”

 

The era of composite indexes has paralleled the generation of consumers taught (erroneously) to avoid animal fats as “unhealthy” – leading to the packaging of low-fat and skim milk products that are simple to make from a “pooled” (generic) processed milk supply.     The current state of indexing (including genomics) is a system to breed for generic fluid milk volume, rather than premium milk prices.    It is clear that increased butterfat % from focused genetic selection is the quickest way for you to raise the milk price on your bulk tank.    We have the bulls to do this.    Let us help you use them effectively.

What most impacts on your future price of milk?

 

We know TODAY that your butterfat production is more than 50% of your total milk check value.    Next in line is your protein production, which not only affects cheese but yogurt and food ingredient milk powders.    Fluid (bottled) milk is now a distant third, with skim milk varieties declining in consumption.    Thus POUNDS of milk is not a profitable breeding goal—PERCENT of components, at lower level of bacterial cells (SCC), certainly is NOW and in the foreseeable future.

As for the FUTURE milk market, consumer demand is forcing a less “commodity”, more specialized array of premium product categories.    For bottling milk, it will be the A2A2 Beta Casein variant milk that carries a premium for those conscious of their health, their digestion and especially for families fighting auto-immune disorders.    For specialty cheeses, BB Kappa Casein offers up to 15% more cheese yield, AB Kappa Casein up to 7% more cheese yield, than the same volume of AA (“standard”) Kappa Casein milk.

BEEF: It’s still what’s for dinner in the USA

 From the Jan/Feb 2018 CONCEPTIONS Beef News

The latest reports show that Beef consumption has steadily risen:  55 pounds per person in 2015, 56 pounds per person in 2016, 58 pounds estimated for 2017.      2% increase per person, times population growth, means several million pounds more beef are moving through American food stores these days.

 

So why have beef prices been down instead of up the last couple years?

 

Because the food retailing industry, in spite of all the “buy local” hype and farmers’ market venues as well as a rise in custom-processed specialty beef (such as “grassfed” or “Pied Lean”), continues to be consolidated.    When internet companies like Amazon use their inflated stock (300 times earnings!!) to buy boutique chains like Whole Foods it is clear that prices at the farm gate must accommodate all the hands that food passes through before it reaches the majority of American tables.

 

Lower beef prices have in fact stimulated demand

 

For years, the national cow herd declined (from over 50 million in the 1970s to under 35 million after the new century arrived) without beef prices dramatically increasing.    The reasons:  (a)  dairy source beef was filling the lower price sectors, for example fast-food hamburger;   (b)  more corn-fed animals meant heavier finish weights on carcasses;   (c)  lots of countries put a lot of effort into exporting beef to the USA.        

 

Grass-fed beef is easier for chain food companies to source overseas

 

Make no mistake—“grassfed beef” is here to stay as well as growing.    The cost to price ratio for corn is not sufficient for rangeland to be converted to row crops, so grazing remains a higher per-acre profit use for cattle feeding.    Thus desire to keep acreage “in grass” leads to desire to feed animals “on grass” for a longer period than just birth to weaning and for dry cow maintenance.

 

However, there is little movement to create a “grass fed beef” marketing infrastructure to move cattle from dispersed grazing farms to central collection locations to serve chain food marketing.   Thus, most of the “big guns” in beef retailing contract “grassfed” beef from as far away as Australia.

 

For the near future, those with a willingness to do direct-marketing (as freezer beef or USDA inspected boxed meat packages) will earn a market premium and help grow beef consumption among a primarily urban upscale food activist clientele…But if you try to buy it at Wal-Mart, you will understand why the “COOL” initiative got shot down.     Their “grassfed” beef comes mostly from South America.

 

Even at current prices, farm beef production currently has the best profit margin of any major agricultural commodity being produced.    Meanwhile, the lower per pound prices we are receiving can be managed with lower grain costs, multiple options for age at sale, and improved sale weights (some genetic stimulus here).    

 

The trend toward higher beef consumption, while small “per person”, is still a steady trend and has room to grow;  after all, 58 pounds per year is still only 1.1 pounds per week, which is two “quarter pounders” and an 8 ounce steak (or pots of chili with meat sauce) on the weekend.    Every gas station convenience store now offers entire racks of meat snacks and beef jerky.     

 

 

Beef prices may be down from a couple years ago, but the premium for “beef breed” calves and feeders (over dairy breed deacons and feeders) is larger and (based on comparative genetic selection trends) will remain so.

 

 

Those of us who see AI sires “on the hoof” at various AI centers will confirm that the Beef breed sires are “meatier” than was true 20 years ago, while Dairy breed sires are trapped in an “angularity” selection trend that works against fleshing feed efficiency.

 

The future growth in the Beef industry output will no longer come from dairy steers—it is coming from a resurgence in Beef breed feeding efficiency and specialty breed marketability.    “Grass fed” beef just requires “beef breed” genetics, while dairy beef is increasingly dependent on corn and soybean to reach finished quality.    (The only numerous dairy breed with any marbling ability is the traditional Jersey.)

 

 

Looking for sires to keep you aligned with the trends?    Just ask us.

 

Mich Livestock Service, Inc     ph (989) 834-2661     PO Box 661    Ovid,  MI  48866

What defines the elite club-calf bull?

 From the Jan/Feb 2018 CONCEPTIONS Beef Newsletter

In recent years, it has become harder for new young sires to break into the club-calf scene.    The famous old bulls, many of whom now have restricted semen producing capability, still have a strong hold on people’s imaginations.

 

Of course, the obvious consequence of this is that prices for “name recognition” sires have dramatically increased in the last two breeding seasons.

 

Are these premium prices justifiable?

 

Marketing Consultants (such as Travis Mitchell of Pandora Cattle Company, near us at Laingsburg MI) say “Yes”.     Tracking the sale value of prospect calves at fall club sales, the premium the progeny of “name” bulls bring appears to more than recover the incremental semen costs.

 

However, some basic biological principles of phenotypic mating suggest that the bulls who produce the best “steer calves” do not produce the same quality of breeding females, and half the genetics of your best calves is that momma cow who birthed and nursed them.

 

Just as with crossbreeding, the tool you hope to harness is “hybrid vigor”, the response to a heterosis mating.     At conception, two genotypes (Sire + Dam) combine by a re-pair-ing of genes attached to each chromosome.   Half the sire’s genes are discarded; half the dam’s genes are discarded; the calf you get is a genetically unique recombination of those two genotypes.

 

Basically, take a cow that already looks like a club steer, breed her to a top clubby bull, and you might get a train wreck instead of a winner.    In fact, the biggest issue with cows that look like steers is their lower fertility response.    We are seeing a gradual increase in “late” calvings from AI rebreedings that occur in herds where the cow herd has accumulated steer/performance genes while losing cow/maternal genes.   

 

Analyze the phenotypes of your cows

 

Most of you seem to have a system for matching your new bull selections to the cows you are calving next spring.     As for yearling heifers, “calving ease” considerations produce a second bull list, and we often observe that the best new replacement heifers come from those matings.    This is because there is a correlation between calving ease and maternal qualities—while the premier steer sires often sire much heavier boned and fuller front ended calves, not as amenable for birthing from heifers.

 

Data I presented to you a year ago showed that of all the measured Beef breeds in play in the USA, by far the hardest-calving bulls are the “Club calf” bulls.    By contrast, breeds that emphasize range ability (growth rates on grass, efficient milk production, heat and cold resistance for living outside) also seem to have sorted out the harder calving lines that might prevent a successful unassisted birth.

 

Even in beef cattle, there is more variation within each breed than differences between breeds.  This is why it is generally not safe to assume “He’s an _ _ _ _ _ bull, therefore will be easy calving” or  “She’s a _______ cow, therefore easy fertility”.      All individuals are unique gene combinations.

Why would a grazier use “aAa” Breeding Guide (Weeks Analysis) ?

 

When “aAa” (Animal Analysis Associates) began in 1950, AI was in its infancy with fresh semen, and the vast majority of dairy (and beef) cattle were eating grass in pastures.    Some got baled hay and corn stover; a few got corn silage, the rest got forage beets and maybe a coffee can of dry grain mix at milking.     The average dairy milked 18 cows, and milk was shipped in cans.

“aAa” began ten years before frozen semen made the genetics horse-race possible, as a system that was based in Bill Weeks’ observations of how physical traits pass between generations. Bill’s genius was to translate biology into a method any cattleman could follow with guidance.  

The obvious success of “aAa” led to breed associations and AI marketing developing their own “mating” services, based on the linear type traits developed for computers in the early 1970s.   Now with herd sizes averaging 50 cows, we all had less time to make these decisions ourselves.    “aAa” held its own against all the new linear and genetic mating, because it still worked.

Ironically, scientific study of the results of linear trait mating could not prove any improvement in dairy herds beyond the differences in sires.   Evaluation is good at telling us the “results” of a mating, but it failed as a “predictor” of how to breed a better herd—in part because measuring the extent of a trait does not recognize the cause of the defective trait expression.     

The industry view is simple.    Whether indexing or crossbreeding, we tend to choose “one size fits all” solutions, as if cows reproduced by cloning.    We forget that two genotypes (cow and bull) combine at each conception, and a unique new genotype will result… Thus no matter how sires are ranked, depending on those numbers alone leads to “single trait selection”, proven as the cause of inbreeding “depression”.     Selection and Mating prove to be separate functions.   

When it comes to grazing and grass dairy, when the cow environment changes daily, that need for physical uniformity requires matings that produce a highly adaptable physique, able to deal with daily and seasonal changes over each cow’s lifetime.    The more physically extreme cows being bred today through “one size fits all” sire indexes do not have that adaptability;  they are designed for a high input, fed TMR in place, year-round barn environment.    For grazing, we go a different direction, adding dimensions that corn-bred TMR cows increasingly lack.

“aAa” Breeding Guide (Weeks Analysis, in Europe) provides the control you need to breed the cow you want, specific to your environment and market opportunities.   Using “aAa” principles today will produce efficient-size cows with optimum forage capacity tomorrow.    It has proven sustainability over multiple generations, avoiding inbreeding depression, as you would expect for a program that thrives (without industry subsidy) 70 years after it was first introduced.

Don’t take my word for it.   Ask around the conference – see what aAa users think.   Then make your own decision.   You may find breeding improvement is easier to manage than you thought.

by Greg Palen                  “aAa” customer since 1978, “aAa” associate/analyzer since 1994.

IN MEMORIAM

Charles W Palen, Jr – founder of Michigan Livestock Service, Inc – passed away Saturday January 3^rd 2015, after a brief illness.    He was in his 92^nd year, and is now released from a years-long decline in memory that had increasingly curtailed his social activity.     He was (with Jack Van Hoven of  General Genetics) considered a pioneer in the modern phase of the artifical insemination industry, in which he and Jack as “friendly competitors” worked together developing AI schooling and on-farm semen storage to provide independence to cattlemen who wished to be in control of their genetic selection and mating decisions.