The author is an associate professor of dairy cattle genetics at Penn State University.
The primary focus of USDA's Animal Improvement Program Laboratory (AIPL) has been conducting research. I think our nation's budget mess has sharpened that focus to some extent and put routine genetic evaluations under the microscope of some USDA administrators. How much internal pressure exists to move genetic evaluations from USDA has been debated, but AIPL scientists are truly concerned that the government will force them to discontinue routine genetic evaluations. These scientists would prefer a seamless transition now rather than an abrupt transition later.
The development of a plan to move dairy genetic evaluations from USDA to the CDCB (Council on Dairy Cattle Breeding) has not been a smooth process. It is an emotional issue for many. Who conducts genetic evaluations and how those evaluations are paid for will have ripple effects on many segments. The Business Plan for data flow and genetic evaluations has been made available but is not considered acceptable by some industry groups (particularly the Holstein Association).
My goal for this column is not to advocate for or against various aspects of the proposal but try and provide some background on areas of concern and clarification on the sticky points.
The specific issues among dairy producers with the proposed changes are varied but there is a central theme. Breeders are concerned that our industry is on course to look like the swine and poultry sector where the majority of the genetics are controlled by a few organizations.
Right or wrong, part of the concern dates back to events that took place in the last four years. The structure proposed in the Business Plan is intended to help alleviate those concerns to a degree, but let's discuss some of the underlying issues that have created some distrust between the groups before we look at the proposed CDCB structure.
There is some skepticism
The licensing agreement that allowed genomic evaluations only for bulls nominated by eight A.I. companies is a flashpoint. That agreement has created residual resentment. Those companies were members of the Cooperative Dairy DNA Repository that provided male DNA for the initial genotyping efforts that facilitated development of genomic evaluations.
With that agreement set to expire in April 2013, dairy producers can potentially genomically test and market their own bulls in competition with the established A.I. industry. Breeders are concerned that the CDCB proposal will allow NAAB (National Association of Animal Breeders) to create financial hurdles to largely prevent that from happening. As a point of reference, NAAB is the umbrella organization that represents bull studs.
A separate, but related, concern deals with the issue of bull studs buying elite cows. Breeders see this as further evidence that the bull studs are trying to limit their influence in providing genetics. That trend was underway long before genomics. The pace has accelerated in large part because the cost of procuring good young bulls has risen substantially with genomic testing.
Though the DHIA organizations have been largely quiet about the proposed agreement, some DHI users have long felt discomfort with use of their records to develop sires that were marketed by others. In the past, that was less of a concern because bull studs paid for first-crop daughter records through their various progeny testing programs.
A different game
The situation is different with genomics. The most informative sires are those with thousands of daughters. Some producers feel as if they are subsidizing competitors that do not participate in DHI and type classification. They may even pay higher semen prices if those dairy farmers are large enough to qualify for substantial volume discounts and herds participating in DHI or classification are not.
Lastly, NAAB members pay for many of the services provided by other groups (DHI testing, type classification programs for example), and there is concern that some NAAB members are willing to use that as leverage to tilt policies in their favor. That concern is amplified because there could be some loss of independence when organizations that use genetic information for marketing purposes control the data needed to generate genetic evaluations.
The structure proposed in the CDCB business plan is intended to prevent a single segment from controlling the genetic evaluation system. Four segments of dairy industry are represented equally, including the PDCA (breed associations), DHI (dairy record providers), DRPCs (dairy record processing centers) and NAAB. This structure should help alleviate some concern about NAAB's ability to lock producers and breeders from marketing genetics. This assumes that each segment is acting in the best interest of their members.
Unclear wording in the CDCB Business Plan has furthered some breeder suspicions. Much relates to the costs and procedures associated with genomically testing bulls. There are ranges given ($20 to $200) for bull testing costs rather than specific amounts. Bulls used for A.I. service would also have an additional fee accessed ($800 to $1,400).
The purpose for such vagueness is not a secret plan to make testing cost prohibitive, but to provide CDCB with flexibility to generate sufficient operating income. All recognize that the system must be funded in some manner. The Business Plan calls for approximately 80 percent of operating expenses to come from testing of bulls, and a set cost cannot be determined without knowing how many bulls will be tested.
Perhaps more concerning are statements such as "North American genomic consortium collaborators would have a negotiated rate lower" than the non-U.S. rate. Who will comprise the North American genomic consortium is not specified. Other wording that has raised concern relates to a requirement that all bulls must be enrolled with NAAB to receive updated genomic evaluations beyond 15 months of age. Those kinds of statements worry breeders about whether they will have equal access to genetic marketing opportunities.
The Business Plan is also vague about the process of allowing additional organizations to submit animals for genomic testing. Currently, the eight Cooperative Dairy DNA Repository members alone can submit bull genotypes. Those companies plus breed associations can nominate females, and breed associations will also be able to nominate males in April 2013.
I anticipate that individual breeders will be required to work through their breed association or a bull stud to nominate males. This is simply for administrative considerations related to additional difficulties in coordinating submissions from many breeders. How organizations, such as pharmaceutical companies, that want to participate in nominating animals for genomic tests are handled is not yet clear.
Genetics without cooperation
A look at the structure of the pig genetics industry will help us understand where we might head without national genetic evaluations. Individual breeders and hog farmers have nearly no impact on genetic improvement in commercial hog production. There is also little concern for specific breeds of pigs. Pig genetic companies maintain their own elite nucleus breeding lines and very rarely purchase outside breeding stock.
These elite lines are considered proprietary, and they protect against breeders or other companies using their genetics. Hog producers are provided with both replacement females, that have been selected and crossed to provide good maternal characteristics, and semen used for the terminal cross.
Pig Improvement Company (owned by the same parent company as ABS Global) is the largest of such companies. Some large hog producers also have their own elite lines. Murphy-Brown, LLC is the world's largest hog producer and its Smithfield Premium Genetics subsidiary is responsible for providing their genetics.
The NSIF (National Swine Improvement Federation) conducts genetic evaluations similar to what we have in the dairy industry. Many small (and a few large) pure-breeders contribute to a database at NSIF. NSIF is a robust organization that provides a high-quality service, but the reality is that breeders using their services produce a small amount of the nation's pork.
A disadvantage of the hog industry is that genetic evaluations are not standardized across companies. That means you cannot compare predicted transmitting abilities from one company directly with a second company.
The road ahead
Assuming that genetic evaluations will no longer be conducted by USDA, procedures to preserve our record database and provide funding need to be developed. The CDCB Business Plan was created with those goals in mind. Allowing for flexibility when it comes to implementing the new genetic evaluation structure is understandable and logical; however, given the current climate of distrust, it may be prudent to provide more detail or clarification about key components of the agreement.
NAAB members are going to protect their interests in this process, as they should. Semen sale margins are not large, and while genomics may make the studs more efficient, it will also accelerate downward price pressures on semen and they could actually become less profitable. Breeder and record-proving segments of the industry are well represented according to the proposed Business Plan.
However, rank-and-file members of breed associations, record-providing groups and cooperative bull studs must provide input and direction for the organizations representing them if they expect these segments to act as a balance toward the commercial interests of other segments.
The stakes for this proposal are quite high when one considers the alternatives. I benefit greatly (as a researcher, collaborator with NAAB members on projects and a breed association member) from our well-developed record system and freely available genetic evaluations. What might be most at risk is the cooperation different segments of our industry have displayed in the past. It is that cooperation of people with different interests that makes the dairy industry special from my perspective, and something I hope we do not lose.
The primary focus of USDA's Animal Improvement Program Laboratory (AIPL) has been conducting research. I think our nation's budget mess has sharpened that focus to some extent and put routine genetic evaluations under the microscope of some USDA administrators. How much internal pressure exists to move genetic evaluations from USDA has been debated, but AIPL scientists are truly concerned that the government will force them to discontinue routine genetic evaluations. These scientists would prefer a seamless transition now rather than an abrupt transition later.
The development of a plan to move dairy genetic evaluations from USDA to the CDCB (Council on Dairy Cattle Breeding) has not been a smooth process. It is an emotional issue for many. Who conducts genetic evaluations and how those evaluations are paid for will have ripple effects on many segments. The Business Plan for data flow and genetic evaluations has been made available but is not considered acceptable by some industry groups (particularly the Holstein Association).
My goal for this column is not to advocate for or against various aspects of the proposal but try and provide some background on areas of concern and clarification on the sticky points.
The specific issues among dairy producers with the proposed changes are varied but there is a central theme. Breeders are concerned that our industry is on course to look like the swine and poultry sector where the majority of the genetics are controlled by a few organizations.
Right or wrong, part of the concern dates back to events that took place in the last four years. The structure proposed in the Business Plan is intended to help alleviate those concerns to a degree, but let's discuss some of the underlying issues that have created some distrust between the groups before we look at the proposed CDCB structure.
There is some skepticism
The licensing agreement that allowed genomic evaluations only for bulls nominated by eight A.I. companies is a flashpoint. That agreement has created residual resentment. Those companies were members of the Cooperative Dairy DNA Repository that provided male DNA for the initial genotyping efforts that facilitated development of genomic evaluations.
With that agreement set to expire in April 2013, dairy producers can potentially genomically test and market their own bulls in competition with the established A.I. industry. Breeders are concerned that the CDCB proposal will allow NAAB (National Association of Animal Breeders) to create financial hurdles to largely prevent that from happening. As a point of reference, NAAB is the umbrella organization that represents bull studs.
A separate, but related, concern deals with the issue of bull studs buying elite cows. Breeders see this as further evidence that the bull studs are trying to limit their influence in providing genetics. That trend was underway long before genomics. The pace has accelerated in large part because the cost of procuring good young bulls has risen substantially with genomic testing.
Though the DHIA organizations have been largely quiet about the proposed agreement, some DHI users have long felt discomfort with use of their records to develop sires that were marketed by others. In the past, that was less of a concern because bull studs paid for first-crop daughter records through their various progeny testing programs.
A different game
The situation is different with genomics. The most informative sires are those with thousands of daughters. Some producers feel as if they are subsidizing competitors that do not participate in DHI and type classification. They may even pay higher semen prices if those dairy farmers are large enough to qualify for substantial volume discounts and herds participating in DHI or classification are not.
Lastly, NAAB members pay for many of the services provided by other groups (DHI testing, type classification programs for example), and there is concern that some NAAB members are willing to use that as leverage to tilt policies in their favor. That concern is amplified because there could be some loss of independence when organizations that use genetic information for marketing purposes control the data needed to generate genetic evaluations.
The structure proposed in the CDCB business plan is intended to prevent a single segment from controlling the genetic evaluation system. Four segments of dairy industry are represented equally, including the PDCA (breed associations), DHI (dairy record providers), DRPCs (dairy record processing centers) and NAAB. This structure should help alleviate some concern about NAAB's ability to lock producers and breeders from marketing genetics. This assumes that each segment is acting in the best interest of their members.
Unclear wording in the CDCB Business Plan has furthered some breeder suspicions. Much relates to the costs and procedures associated with genomically testing bulls. There are ranges given ($20 to $200) for bull testing costs rather than specific amounts. Bulls used for A.I. service would also have an additional fee accessed ($800 to $1,400).
The purpose for such vagueness is not a secret plan to make testing cost prohibitive, but to provide CDCB with flexibility to generate sufficient operating income. All recognize that the system must be funded in some manner. The Business Plan calls for approximately 80 percent of operating expenses to come from testing of bulls, and a set cost cannot be determined without knowing how many bulls will be tested.
Perhaps more concerning are statements such as "North American genomic consortium collaborators would have a negotiated rate lower" than the non-U.S. rate. Who will comprise the North American genomic consortium is not specified. Other wording that has raised concern relates to a requirement that all bulls must be enrolled with NAAB to receive updated genomic evaluations beyond 15 months of age. Those kinds of statements worry breeders about whether they will have equal access to genetic marketing opportunities.
The Business Plan is also vague about the process of allowing additional organizations to submit animals for genomic testing. Currently, the eight Cooperative Dairy DNA Repository members alone can submit bull genotypes. Those companies plus breed associations can nominate females, and breed associations will also be able to nominate males in April 2013.
I anticipate that individual breeders will be required to work through their breed association or a bull stud to nominate males. This is simply for administrative considerations related to additional difficulties in coordinating submissions from many breeders. How organizations, such as pharmaceutical companies, that want to participate in nominating animals for genomic tests are handled is not yet clear.
Genetics without cooperation
A look at the structure of the pig genetics industry will help us understand where we might head without national genetic evaluations. Individual breeders and hog farmers have nearly no impact on genetic improvement in commercial hog production. There is also little concern for specific breeds of pigs. Pig genetic companies maintain their own elite nucleus breeding lines and very rarely purchase outside breeding stock.
These elite lines are considered proprietary, and they protect against breeders or other companies using their genetics. Hog producers are provided with both replacement females, that have been selected and crossed to provide good maternal characteristics, and semen used for the terminal cross.
Pig Improvement Company (owned by the same parent company as ABS Global) is the largest of such companies. Some large hog producers also have their own elite lines. Murphy-Brown, LLC is the world's largest hog producer and its Smithfield Premium Genetics subsidiary is responsible for providing their genetics.
The NSIF (National Swine Improvement Federation) conducts genetic evaluations similar to what we have in the dairy industry. Many small (and a few large) pure-breeders contribute to a database at NSIF. NSIF is a robust organization that provides a high-quality service, but the reality is that breeders using their services produce a small amount of the nation's pork.
A disadvantage of the hog industry is that genetic evaluations are not standardized across companies. That means you cannot compare predicted transmitting abilities from one company directly with a second company.
The road ahead
Assuming that genetic evaluations will no longer be conducted by USDA, procedures to preserve our record database and provide funding need to be developed. The CDCB Business Plan was created with those goals in mind. Allowing for flexibility when it comes to implementing the new genetic evaluation structure is understandable and logical; however, given the current climate of distrust, it may be prudent to provide more detail or clarification about key components of the agreement.
NAAB members are going to protect their interests in this process, as they should. Semen sale margins are not large, and while genomics may make the studs more efficient, it will also accelerate downward price pressures on semen and they could actually become less profitable. Breeder and record-proving segments of the industry are well represented according to the proposed Business Plan.
However, rank-and-file members of breed associations, record-providing groups and cooperative bull studs must provide input and direction for the organizations representing them if they expect these segments to act as a balance toward the commercial interests of other segments.
The stakes for this proposal are quite high when one considers the alternatives. I benefit greatly (as a researcher, collaborator with NAAB members on projects and a breed association member) from our well-developed record system and freely available genetic evaluations. What might be most at risk is the cooperation different segments of our industry have displayed in the past. It is that cooperation of people with different interests that makes the dairy industry special from my perspective, and something I hope we do not lose.
This article appears on page 557 of the August 25, 2012 issue of Hoard's Dairyman.
