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Genomic testing: How to generate returns quickly

David Erf for Progressive Dairyman Published on 19 March 2019

There is a widespread misconception that dairies must wait to see financial returns from genomic testing – that cash-strapped dairies can’t justify the investment for potential long-term gains. A close look at the numbers produced from a carefully considered genomic testing plan tells a different story – one of increased efficiency and more immediate returns. But how?

1. Right-size heifer inventory

By using a genomic test that includes adult cow and calf wellness traits to predict risks for common and costly diseases, you can generate more immediate information to identify which heifers are genetically able to survive, thrive and advance to their production prime in your herd. At an average raising cost of $2,200 per calf, just think of what you could save by identifying at a young age the heifers most susceptible to mastitis, metritis, milk fever (for Jerseys), respiratory disease and scours?

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This potential savings could help cover genomic testing costs and focus your heifer-raising investments on heifers that can help you grow your bottom line.

Many dairies don’t understand just how much excess they have. I worked with a herd that had 40 percent too many calves. It was eye-opening for this operation to pencil out raising costs for all of those heifers, especially not knowing if they’d all make successful replacements. To right-size their inventory, we used information generated from genomic testing to identify and remove the bottom 20 percent of heifers. This freed up heifer-raising costs. The dairy applied these cost-savings to support genomic testing expenses. Could you confidently manage heifer inventory without genomic testing information?

2. Apply more strategic breeding strategies

The other part of cash flowing genomic testing is coming up with breeding strategies that will create the most valuable calves. The most valuable calves in today’s market are beef-cross calves. This is because beef-cross calves are worth about $100 a head more than Holstein calves, on average. If I get herds using a lot of sexed semen and beef semen – and very little conventional semen – a lot of them can create up to 40 percent as beef-cross calves. The premium generated from these calves brings $40 more in value per calf. This can cover costs for genomic testing and sexed semen.

How much cash flow can genomic testing generate?

To give you an idea of potential cash flow opportunities, the models below demonstrate how a 300-cow herd created additional income, up to $8,000, by applying genomic testing strategies that included breeding with sexed semen ($25 per unit) and beef semen ($5 per unit). To compare semen costs, I plugged in a “current” scenario using sexed semen on the top half of heifers (two times) and conventional semen to breed the rest. Using increased conception rates for heifers, I came in around $6,000 for “current” semen costs.

Option 1: Creating $8,000 additional income

Using the figure of beef calves being worth an extra $100 each than purebred Holstein calves, this aggressive strategy produced an additional income of $13,600, a net gain of over $8,000 for the dairy. This increase not only pays for the sexed semen, but also covers the costs of genomic testing with some to spare (144 X $43 = $6,192).

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The strategy: All sexed or all beef semen

  • All heifers bred with sexed semen
  • First-lactation cows: Top 65 percent on sexed semen (two times); all others are beef semen
  • Second-lactation cows: Top 25 percent on sexed semen (two times); all others are beef semen

The results:

  • 12 dairy heifers created a month
  • Semen cost is $11,500, or an increase of $5,500 (compared with “current” scenario before strategy change)
  • Beef calves: 136 per year

Option 2: Creating $6,000 additional income

This less aggressive approach uses more sexed semen, but not exclusively sexed and beef, for producers who perhaps don’t want to extend themselves to the degree of the first example. Nonetheless, this strategy still produces an additional income of $6,000 considering beef calves are each worth an extra $100 compared with purebred Holstein calves.

The strategy: More sexed semen, but not exclusively sexed or beef semen

  • All heifers bred with sexed semen (three times), followed by conventional semen
  • First-lactation cows: Top 25 percent on sexed semen (two times), followed by conventional semen; next 35 percent on only conventional semen; bottom 40 percent on beef semen
  • Second-lactation cows: Top 10 percent on sexed semen (one time), then conventional; next 30 percent on conventional semen; bottom 60 percent on beef semen

The results:

  • 12 dairy heifers created a month
  • Semen cost is about $4,000 more than “current” scenario before strategy change
  • Beef calves: 103 per year

Adjusting and evaluating genomic testing strategies

Right-sizing heifer inventories and applying different breeding strategies can be awkward. The biggest concern is that these strategies will lead to heifer shortages. It’s true that heifer inventory needs will decrease as we create heifers with the best genetics and cows tend to last longer.

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Part of adjusting the strategy as the ideal makeup of the herd improves is resetting expectations to make sure you don’t have to sell older, more profitable cows. As herds make more and more heifers, turnover rates can creep up. It’s becoming more common to see herds with 45 percent turnover rates, well above the industry average of 35 to 36 percent.

At this point, management becomes about monitoring culling decisions. Make culling decisions that give profitable animals the opportunity to live out their profitable lives.

In addition to decreased heifer inventory needs, another change that can require adjustments is improved pregnancy rates. When pregnancy rates improve, more calves are made. You may need to adjust the strategy to use more beef semen because heifers and cows are becoming pregnant quicker.

The only way to be aware of these adjustments is to consistently apply an informed genomic testing plan and evaluate the outcomes.

The benefits of on-farm support

When choosing a genomic test and implementing the plan, it’s important to understand the level of service and support that comes with the test. Successfully interpreting genomic test results and applying the information requires support from real, live representatives to help conduct herd audits, establish plans, develop on-farm testing procedures, interpret the genomic information and evaluate testing strategies.  end mark

References omitted but are available upon request. Click here to email an editor.

David Erf
  • David Erf

  • Geneticist, Dairy Technical Services
  • Zoetis

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