Profit in the genes for free

WHAT comes free with every cow, and can add around $13 to her value each year she is joined?

Genetic improvement has been prized by cattle producers since humans domesticated the aurochs, but the value of incremental generation-on-generation performance improvements - genetic gain - hasn't been well quantified.

In the past, measuring genetic gain in cattle didn't make much sense because it tended to advance at a pace only discernable across human generations - when it advanced at all. But performance recording and genetic technology have changed all that.

Christian Duff, the Beef Breeding Extension manager at the Agricultural Business Research Institute (ABRI), said in the 1990s, genetic gain (measured as an estimate of the extra value delivered by better genetics) was about $1 per cow mated per year in performance-recorded animals.

By the mid-2000s, that figure had advanced to about $2/cow/year. Currently, it's sitting at around $3/cow/year.

Based on the accelerating trend, and the growing number of breeders reaching for more genetic tools, Mr Duff thinks genetic gain could soon reach $4-$5/cow/year.

If the average producer is making $100 profit per cow, then $3 a year is three per cent of profit.

One way of looking at that figure is that it wouldn't buy a decent cup of coffee.

There are other angles on three per cent, though.

"That's about what superannuation is delivering at the moment," said Rob Banks, Animal Genetics and Breeding Unit (AGBU) director.

Alternatively, Dr Banks said, three per cent can translate to about 10 kilograms of extra carcase weight, or proportional improvements in fertility or marbling or other performance traits.

But he suggests that genetic gain should also be considered as being cumulative: it is encoded into a cow's calf, and the calf's progeny, ad infinitum.

Look at gain cumulatively, and the sums become interesting.

Graphic: Average Weighted selection index ($) and Average Rate of Change (5 year rolling) for British and European breed societies with selection indexes published.

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Over a 10-year period, the total accumulated value of genetic gain at $3 per cow per year is $135, or $13.5 per year.

It doesn't stop at genetics.

If a producer takes an interest in genetic gain, Dr Banks said, it makes sense for them to also examine how well they are capitalising on that gain. For an animal to express its genetic potential, it needs the right raw materials.

If a producer invests in improved pastures and fertilisers, it is prudent to have high-performing livestock genetics turning those pastures into profit with maximum efficiency.

Cattle with better genetics will harvest the pasture more efficiently, convert it into beef more efficiently, produce more beef from the same amount of pasture and produce better quality, more valuable meat.

Effects of genetic gain alone on cow herd profit. Current levels of genetic gain are estimated to be about $3 per cow per year, effectively cancelling out declines in terms of trade. Graphic: Rob Banks, AGBU.

"It becomes more and more obvious to producers that if the bull is doing some additional work for you, and you feed the cattle properly, all that gets turned into more profit," Dr Banks said.

"Genetics and management are not in conflict with each other. Good genetics gets the best out of whatever management is being applied, and the same is true in reverse: better management will get better returns from any cattle. But you get a lot better returns from good management if you've got good cattle."

The top rate of gain occurs in well-recorded seedstock herds with aggressive genetic improvement programs, but Dr Banks says that a high proportion of commercial producers are also benefiting from gains being made through BREEDPLAN performance recording.

"I suspect only about 10-15 per cent are really conscious of it, and are working to get the best out of it. Those people will tend to buy their bulls up the performance scale within the breed, and they will probably pay a bit more, but the benefits from the higher genetic merit mean that there is still plenty of benefit to the buyer."

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While genetic gain is going up, it is also growing broader, in the sense that the early standard performance traits are now being expanded on with harder-to-measure traits like calving score and mature cow weight.

All this is progress, and progress will continue among breed societies that have set up nucleus herds following the closure of the Beef CRC.

But it is not an area that the Australian beef industry can afford to be complacent about, Christian Duff said.

Beef is becoming an ever-bigger global business: beef exports from the Americas are forecast to rise nearly 20 per cent by the end of the decade.

So far, Mr Duff thinks, Australia is holding its own against these beef giants when it comes to getting genetic gain from its herds.

At the same time, he said, "we're not doing significantly better, either".

http://www.farmweekly.com.au/news/agriculture/cattle/beef/profit-in-the-genes-for-free/2694492.aspx