The debate is back! While Artificial Insemination companies have owned females for many years, with recent dominance by some AI breeding programs on the TOP GTPI list in the US and the upcoming ability for breeders to sample their own bulls, the debate is at the forefront again!
Lessons from the Past
Over the years there have actually been many examples, with mixed results when A.I. companies have owned their own female bloodlines.
- AltaGenetics
Back in 2001 Alta Genetics caused considerable stir when they planned to take their embryo program and convert it into a 1000 elite females test herd to have sires sampled through 100 contracted progeny test herds. While the program had many supporters from the genetic advancement side, it was seen as very risky and ultimately was put on hold when Alta purchased Network Genetics. The herd was then dispersed to farms owned by Alta in Canada and Holland and in four independent herds in the U.S. - GenerVations
GenerVations is probably a great example of an A.I. program that has had a lot of success owning their own female bloodlines. Starting with Albert Cormier’s part ownership of Skys-The-Limit Claire where he was able to maximize profits from both sides, thanks to Champion. Continued by GenerVations part ownership of Lylehaven Lila Z, owning female bloodlines has been what enables GenerVations to compete on a global scale. Not being able to have a large sampling program, GenerVations has had to focus on potency rather than volume. Selecting on the very top bloodlines and putting all your eggs in a few baskets means GenerVations has to take a larger risk than the big A.I. companies. Owning top females has helped them manage the risk. - Genex CRI
The Genex CRI Genesis program has been around since 1989. While heavily focused on top Index cattle they have been able to achieve success on the female side with such cattle as MS Pride Plnt Tasket 788-ET who tops TPI and Lifetime Net Merit lists. On the male side, the Genex program has proven to be very stable in their bull program. The 54 Co-op prefix bulls averaged a mere $1 drop in Lifetime Net Merit (LNM) as they transitioned from genomic-only genetic evaluations in August 2010 to daughter-proven genetic evaluations in December 2011 (minimum of 40 daughters). The average change among the 1,879 bulls industry wide over the same time period was a $22 decrease. - St. Jacobs ABC
While the St. Jacobs ABC’s Judges Choice program has been around for many years marketed in partnership with ABS Global. They have more recently entered into the ownership of top female bloodlines with the purchase of Ashlyn, Hezbollah, and Barbara. Choosing to focus on established show cattle has meant that the Judges Choice program has been focused on young sire sales with sires achieve proven status being an added bonus. - Select Sires
Probably the A.I. Company making the biggest waves today is Select Sires. Select has been very aggressive in the ownership of top genomic females to the point that on the December Top 200 Genomic Female list they owned 18% of the top 50 new genomics heifers in the US. With Ladys-Manor PL Shamrock and others, Select Sires is investing heavily in ownership of top genomics females in order to produce the next generation of top TPI Sires.
The Genomic Game Changer
The biggest reason this issue is coming up again is because genomics is changing the prominence of industry sires with no daughter proof data, and virgin heifers are now in heavy demand as for contract matings. Genomics has deceased the risk to such a level that it can be very economically viable for these A.I. companies to invest in top bloodlines and increase their genetic advancement rate faster than their competition. By being able to control the matings on these top females and use top (often unproven ) genomic sires on these virgin heifers they will be able to greatly increase their rate of advancement over their competition, and in fact fast than even top breeders. That is because they will have access to their own top genomics young sires sooner. They can use them on contract matings far faster than any breeder can. This gives them a distinct competitive advantage over both other A.I. companies and over breeders.
The Question of Ownership
A.I. companies owning females seems to be a very touchy issue for many breeders. While many of these companies are perfectly within their rights legally, it comes down to a question of public perception. Many companies, such as Semex, have taken a very vocal position that they do not own females. Given that Semex is a member owned co-operative, it’s understandable that they do not want to be in competition with their breeders, many of whom are the top suppliers of sires to many A.I. companies worldwide. However, Select Sires is also a federation of nine farmer-owned-and-controlled cooperatives. You could not have two more extremely opposite positions from two very similarly owned companies.
The Bullvine Bottom Line
Genomics has changed the breeding world. However, it has also created a wild wild west environment where both breeders and A.I. companies are figuring out what the new world will look like. Will A.I. companies be nothing more than service companies that deliver genetics from many sources (much like a Wal-Mart) where they are more based on quality of service and customer experience than the genetics they have to offer? Will more and more top breeders try to increase their own profits and sample their own sires? (Watch www.thebullvine.com for articles on these issues coming shortly) The important thing to note is that some A.I. companies have taken early steps to control the source and supply top genetic animals to their customers. The world is changing and so will the inter-relationship between breeders and A.I. companies, in many cases they are no longer just a customer they are now a competitor.
What do you think? Leave your comments in the box below.
I think A.I. Companies should not own females!! These farmer owned coops are using our money to compete against us!!
Rick,
Well I very much understand your comments here, I find myself of mixed opinion. On the one hand, I totally agree that they should not compete in anyway with their members. However, on the hand I do believe that it is their job to cost effectively source the best genetics possible or risk becoming irrelevant. So if they are not going to do more to cost effectively source the next generation they need to do more to help their members to produce these sires.
Andrew
To those who believe competition and freedom of ownership ought to be regulated or mandated within the AI industry should put their envy aside; this would be no different than a communist tyranny. These top genetics have been offered at public auction or have a private price tag attached to them; which in a capitalist system any one or group can bid to purchase if desired, the supply of top genetics has always been the same and I would argue more affordable then ever. Your second last comment scares me the most: important note AI companies control source and supply of their top genetics, your right all animals sold for more than fifty thousand should be declared of national interest and is now owned by the people everyone gets one free in their community farm; wave your red flag, I will let the market decide.
Yann,
While I totally agree that everything has been being done in a free market. However, what happens when the A.I. companies have no need to sell any females lines? Due to the fact that they achieve much quicker genetic gain than breeders do they will ultimately eliminate the breeders from the equation. What I am trying to point out here is that there is a new very very big competitor in the market, that does not have to play by the same rules as most breeders.
Andrew
I believe that these AI companies are owned by all parties that purchase products, commercial producers and breeders. From the company perspective, I would anticipate that commercial dairymen provide the viability to there success. I view that AI companies moved to owning females to control their destiny, the opportunity to provide the best genetics possible for there customers. The dairy industry needs to look across the fence at the swine industry and what happened to the small independent genetic supplier.
As a small breeder of Jersey genetics, I do not view the AI companies as a competitor, but as distributors. Once we move to where breeders control the information of genomics, we will be in a position to negotiate the value of our genetics. I still need the distribution that is provided by the AI companies.
I see it like this , ai company well buy animals and achieve greater available sourcing. But it well never get to the point that with the rules tinted in favor of ai that they would have a stronghold on the genomic market. If at some point the ai company where to buy up so much of the top numbered animals that the average breeder says there no point competing against them the market for young sire semen dies. There fore i cant see ai companies being big buyer in genomic females.