Over the past week, we have seen the announcements for two Millionaire sires. Semex announced the passing of Buckeye (Read more: Semex Millionaire Sire Buckeye Passes Away) and Shot, from Select Sires, was noted as the youngest millionaire sire ever at Select. (Read more: SHOT Becomes Youngest Select Sires Millionaire) With dairy breeders using more and more young sires, to the point where young sire semen sales are now a larger portion of the overall sales worldwide than proven sires, it has us asking, “Will there ever be another Millionaire Sire?”
It is interesting to understand how Shot became the youngest ever. This is perhaps a sign of things to come. You see Shot is not a total product of the “Genomic Era.” However “with the release of genomic data, SHOT was identified as one of Shottle’s most elite sons,” explains Rick VerBeek, sire analyst with Select Sires. “This helped drive his semen sales significantly. SHOT has been the No. 1 selling bull for Select two out of the past three years and is on pace to be the No. 1 selling bull in 2014. He has shattered nearly every semen production and sales record at Select Sires, including setting the record for yearly sales in 2012 with 311,824 units sold.” The interesting part about this is that SHOT’s second-crop daughters are just entering his proof now. So, for the most part, he has driven this level of interest heavily on his genomic proof and about 300 daughters (# of daughters in his proof in April 2013). Unlike sires in the past that did not receive significant use until they had a solid proven sire proof, Shot has been Select’s top selling sire based mainly on a limited number of daughters in his proof but especially because of his Genomic data. This is certainly a sign that times are changing and young sires are indeed accounting for a much more significant portion of the overall sales for A.I. units. The challenge with this is that, unlike the case with SHOT, most young sires are not great semen producers. Indeed it is very hard for A.I. units to keep up with the demand for these elite genomic sires. So there is a supply and demand issue in the industry today. As is the case in any industry, when supply is less than demand, the price is sure to increase. This has been the case for elite young sire semen in recent years.
Further sparking my thoughts on this matter is Alta Genetics recent advertisement in regards to the fact that Alta’s Top 100 gTPI bulls have achieved triple Millionaire status before their first daughter proofs. This is certainly an indicator of the times. Instead of a few proven sires being the headliners for A.I. units around the world, it is now a group of Genomic sires that are leading the charge, when it comes to semen sales. According to our estimates, that is about 100,000 doses per sire per year (Alta has about 8-11 sires in the top 100 gTPI over the past 3 years). So gone are the days when it was hard to sell enough semen to get a reliable 1st crop daughter proof. Now Genomic Young Sires among the headliners for each stud.
The one monkey wrench in this whole equation is the supply challenge. It is a well-known fact that young sires do not produce as much semen as proven sires. As we mentioned above, that limited supply in relation to demand does typically lead to an increase in price. The challenge with that is the commercial milk producer, who represents over 90% of the marketplace, is not willing to pay more for their semen. This leaves the A.I. units in a challenging circumstance. With greater demand coming for their most costly entity, what can they do? You see a young sire is like a 2-year-old cow. It costs money to get them there: Time and money in raising them (in the case of A.I. units, testing them and getting them into the unit. It takes time to get them to an output level that is significant enough to maximize their profitability. So what are the A.I. units to do? Well, the only logical thing…sample more young sires. Yes, Genomics was first heralded as a significant cost savings for A.I. units because they would have to sample fewer young sires in order to get highly profitable proven sires. In the end, the opposite may prove to be true. It may change the industry to such a point that most sires are long since passed before they ever receive their first official daughter proof. Which, due to semen production issues, may mean that many sires will never receive the opportunity to reach the Millionaire status. Most due to production issues will be lucky to hit 300,000 units and even the most elite may only ever reach 500,000 units.
The Bullvine Bottom Line
While millionaire status is certainly an achievement to celebrate, it may not be a realistic expectation for top sires heading into the future. The marketplace has changed to the point where genomic sire semen sales is now greater than proven sire sales and could reach as high as 84% market share (Read more: Why 84% of Dairy Breeders Will Soon Be Using Genomic Sires!). Combining that statistic with the fact that young sires do not produce nearly as much semen per year, we could be about to see the last few sires that will ever achieve this lofty benchmark.
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