Cow condition is often compromised in the autumn which can have a detrimental effect on production next season. Drying off lower body condition score cows, early, is recommended so that optimum body condition scores are reached at calving. Milking frequencies can be adjusted, which can help to improve body condition score. Once a day milking or 16hour milking are two options; both of which I have used in the past with great success.

The numbers of cows to kill this autumn will overflow any works space available. Cull cows should be identified and space booked early so cull stock are not eating into winter pasture covers. Any initial loss in production from these cows is made up by milking the remaining cows for longer, due to the lower stocking rate and overall demand per hectare.

Winter grazing prices seem to be a hot topic at the moment. It seems that there is a gap between the price farmers are willing to pay and what graziers are prepared to take. I’m sure sense will prevail and an acceptable market price will be agreed upon, that is profitable for all parties concerned. There seems to be an oversupply of feed available, which will dictate the market price.

Determining staffing levels for next season, and sourcing staff, is often one of the major projects undertaken over the autumn months. Talking to staff about their intentions for next season and what you can offer is advisable so there are no surprises. Some people may be thinking of cutting costs by employing less staff and working more hands on themselves. This is an option, but careful consideration should be given to the implications to yourself and your family.

Finally stay positive, and focus on areas of your business you can change that can improve profitability. Keep the lines of communication open, particularly with your family, friends and staff; also industry professionals involved in your business.

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Recent rains in Eastern areas have come as a welcome relief for many as Autumn conditions prevail. The prediction for the period ahead is for normal rainfall in Eastern areas and normal to below normal for the south and west. Most farmers would be happy with this picture with the exception of the odd grain farmer in North Otago who would have preferred the rain earlier. Many farmers who had killed potential replacements in last season’s dry have either sown an additional feed crop with the intention of grazing dairy stock or are looking to top up capital stock numbers. Most feed crops have established and performed well to date which suggests there may be a surplus of supplements available in winter, particularly if the forecast cull cow kill proceeds.

Nutrition - parasites

A common talking point among farmers recovering from dry conditions is how lambs in particular struggle to adjust to the change in feed available to them as pastures recover to be lush and green. While we expect an instant return to high growth rates, often reality is very different with scouring and low weight gains. In dry matter terms the feed ingested is likely to have much lower dry matter content post rain and the rumen requires a period of adjustment to the new feed. Another issue is the triggering of internal parasite larvae to hatch and climb up the leaf in the film of moisture to continue the cycle. As it takes a period of time for ingested larvae to shed eggs as adults, the damage to gut wall in the interim is likely to cause a production loss.

Feed situation comment

The crystal ball tends to come out at this time of year as farmers try to predict what the markets will do and how the playing field has changed. We know that global markets are in crisis mode but are not sure of when or if it will impact behind the farm gate. There is a chance that people will trade down in terms of choice, favoring the bulk commodities such as beef. Dairy commodity prices have tumbled rapidly from record highs and results are being felt on high debt operations. Lamb has been buffered by a drop in the dollar and a global decline in supply helping to underpin prices. The impact behind the farm gate is the lack of security as markets flux resulting in significant policy changes. A year ago, the crystal ball was portraying a bleak future for sheep and a rosy outlook for dairy and many farmers made policy changes to include a dairy support component. Today the brakes have come on the dairy expansion and costs are being scrutinized including off farm grazing. The crystal ball now suggests a supplementary feed surplus and a late round of negotiations to secure winter grazing at a lower price.

Variation and planning

One could expect farmers to throw up their hands in dismay as the playing field is changing much faster than it is possible to change farm systems. Some farmers will look for alternative policies that can compare with cow grazing for returns. One answer does not fit all as different feed types, length of term along with debt and risk comes into play. It is important to consider all of the implications of a policy change, particularly the impact on core operations. For dairy farmers this may be having the correct cow numbers on hand to utilize spring feed next season. For sheep farmers it may be ensuring sufficient ewe feed available to achieve high lambing % next spring. Once again planning and consideration of feed requirements to meet critical needs of stock is required. Another aspect is to consider whether policies and predictions are feasible and realistic.

Key points

• parasites numbers can spike quickly following a dry period – be vigilant
• plan any policy changes and review longer term ramifications

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Lower cost pasture-based systems are likely to be more profitable rather than those that have become reliant on costly bought-in feed, says Dunedin-based consultant Peter O'Neill.

He says the drop in dairy payout is not unexpected. What has surprised farmers and caught them unaware is the magnitude and speed of the drop in the forecast. When this is combined with the incessant creep that has occurred in farm working expenses (FWE), farm cashflows can be challenging.

While dairy farmers have no control of the payout, they do have control of costs of production.

Before Christmas, Westland Milk alerted its shareholders of the drop in its forecast for this season from a range of $5.20-$5.60/kg MS to $4.10-$4.50/kg MS. Last season it paid suppliers $8.29/kg MS.

Last season Fonterra paid $7.90/kg MS, in 2006-07, $4.35/kg MS and 2005-06, $4.10/kg MS.

O'Neill says Fonterra's average payout for the past seven years is $4.86/kg MS. While yet to be banked, a payout of $5 or better this season is still above average.

O'Neill suggests costs of production (farm working expenses) regardless of payout should be no more than 50-55% of payout. He also adds that a lid needs to be kept on buying-in feed costs; they should be no more than 5% of payout.

He suggests dairy farmers look again at their stocking rates and concentrate on their strengths, which includes growing grass and doing the basics better. This includes maintaining an optimum balance between pasture production, stocking rates, per cow and production/ha, and the levels of inputs.

"For some, additional profits will come from accepting lower per cow, per hectare production at a lower input cost. Simply doing 480kg MS/cow or 1800kg MS/ha is no longer necessarily the most profitable."

O’Neill urges farmers to keep lines of communication open, make the time to revise year-to-date, end of year projections and next year's budgets. Begin the new season's budget with zeros in each column.

Work through budgets and identify status quo and medium term breakeven points at full maintenance. Then identify breakeven payout and breakeven production levels.

O'Neill continues to encourage clients to set targets and strive for them, but not at any cost. Knowing the various breakeven points of any business and what drives them is a valuable exercise and are useful tools when working through options. They help drive planning and business strategies. Benchmarking your business against others is another valuable exercise and identifies opportunities.

Keep track of performance throughout the year and stay in touch with your banker, accountant and consultant.

If farmers have not already done it they should review provisional tax payments and livestock taxation options and their impact.

Discuss the merits of which livestock taxation options, herd scheme and/or national standard cost (NSC) fits your plans.

Farm owners and sharemilkers who have increased herd numbers may have the choice of electing herd scheme or NSC values. One issue can be the requirement to give Inland Revenue two years notice in writing of an intention to change or plan to exit the herd scheme.

Last month's fertiliser price adjustments and another downward movement in mortgage interest rates will offset some of the drop in income. O'Neill suggests those locked into higher interest rates should discuss with their bankers the worth of breaking some fixed mortgages.

Nutrient budgets should be revised. Consider soil testing and making informed, strategic and tactical use of all fertilisers including nitrogen (N) fertilisers. Spreading effluent over a wider area of the property may be an option to lower fertiliser costs. Another is just applying maintenance.

Animal health-wise, adopting SAMM plan recommendations (strategic use of dry cow) at drying off may be more cost effective than using blanket dry cow therapy. If mating records are accurate savings may be made by only pregnancy testing cows once.

Determine the need before drenching with an anthelmintic, and if required consider the costs of using a pour on anthelmintic compared to an oral treatment. When controlling lice the use of a specific lice control treatment may be more cost effective than a combination type pour-on.

Closely question capital expenditure, is it really a need or simply a want? Keep plant replacement costs to a minimum. Maintain maintenance schedules of existing plant. Will plant due for replacement do another season? Consider using contractors and avoid having money tied up in expensive, depreciating machinery.

With this season's cull cow kill expected to begin earlier, avoid delays by contacting your company representative and booking works space for all cull animals. There is little point having them chomping their way through winter covers any longer than necessary.

The drop in cow values along with interest rates is an opportunity for young sharemilkers to move up to herd ownership (50/50 sharemilking) or expand current herd size.

Meanwhile the fall in Fonterra's share price may also create additional pressures for those planning to produce extra milksolids this season and having to share up at $5.57/share. The fair value share (FSV) for this season is $5.57.

This compares with Fonterra's December announcement that next seasons FSV would be $4.47, $1.10 less. Although this will have an effect on cashflow, O'Neill believes the increase in overall asset more than compensates for this cost.

He bases this on valuing a dairy farm at $40kg MS. However, those buying shares for a new conversion or planning to purchase an existing dairy farm the $1.10 drop in share price is to their advantage.

O'Neill says the drop in payout will lead to stronger business disciplines and more resilient businesses. As well as questioning where money is spent, he believes there is no better time than now to refocus on those areas of business that are performing and those where improvements can be made.

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Ram breeders have several new breeding tools to assist them deliver the increased rates of genetic gain their clients are demanding of them.

Developed by AbacusBio's Peter Amer they are designed to add further value to current pedigree and genetic evaluation systems.

Dunedin-based Amer says SIL ANI-Mate and ANI-Mate Advanced are two in a suite of services offered as part of the AbacusBio team's Accelerator package.

SIL Ani-mate provides ram breeders with a relatedness table or alternatively ‘ready-to-draft' mating list for selected rams and ewes which increase the likelihood of breeding greater numbers of elite animals and at the same time reduce the impact of inbreeding.

The relatedness tables match each ewe in the stud flock against candidate rams and shows the degree of inbreeding that may result in the progeny from each of the different matings.

Amer say the lists can be used on their own, or alternatively, to fine tune mating groups provided as part of the SIL Ani-Mate mating listings prepared to keep inbreeding to a predefined minimum.

Having ‘ready to draft' mating lists also saves valuable time when sorting up mating groups in the yards and increases the flexibility of the breeding programme.

As a well as controlling all matings between direct relatives, Ani-Mate enables all sire-daughter and parent-progeny matings to be avoided.

Rams are assigned to ewes according to the breeders preferred selection strategy.

This could include mating ‘best-to-best, (high-to-high) or high-to-low using the breeders' choice of SIL indexes or breeding values (BV) or focusing solely on minimising inbreeding in the progeny.

Available in user friendly e-report format, the listings are easy to use and sort through. They can be quickly printed off for use when fine tuning individual matings in the yards or they can be directly viewed from a computer screen at the side of the drafting race.

Breeders simply advise their SIL bureau which rams they intend using and the tag number of any rams they intend to put to particular age groups such as just the ewe hoggets or two-tooth ewes. SIL Ani-Mate then assigns ewes to rams on the basis of minimal inbreeding and the breeder's selection strategy.

A ram usage summary, a backup ram list, a simple ewe mating list and a comprehensive ewe mating list are among the four reports.

Amer says a more customised service, Animate Advance, is now available to cater for those breeders that have specific requirements when planning their mating groups.

It is able to cater for a wide range of situations including large flocks, multiple sire joinings and where complex preferential mating systems are being used.

Ani-Mate Advance develops specific individual and group mating plans by analysing SIL breeding value, index and pedigree data. This creates the opportunity for breeders to increase the likelihood of producing greater numbers of elite animals while reducing the impact of inbreeding in both the short and long-term.

Ani-Mate Advance does this using a number of techniques including assortative (random) or best-to-best mating, the use of tactical and strategic inbreeding controls and relatedness profiling.

Amer says each of the techniques can be used individually or in combination depending on the needs of the individual breeder.

Along with best-to-best and random mating, Ani-Mate applies several inbreeding control strategies that can be put in place to carefully manage the overall relatedness among selected parents while maintaining the highly valuable genetic diversity within a flock.

When purchasing their flock rams, farmers are looking primarily for a good solid team of rams that will on average deliver the increased rates of genetic gain they are now demanding. In a team of four rams, one super star and three duds is not the answer.

Amer says mating ‘best-to-best' increases the spread of breeding values in the next generation so the chance of producing an exceptionally high breeding value animal increases.

However he points out when compared with random mating the average breeding values of the animals in the next generation remains largely unchanged.

Because the highest ranking rams in a flock are more often related to the highest ranking ewes than to the lowest ranking ewes and resulting elite progeny are expected to contribute to future generations, the use of random mating can lead to rates of inbreeding going unnoticed.

As a result Amer suggests best-to-best mating should only be used in tandem with Animate tools that assist in managing rates of in-breeding.

One variation of the best-to-best option allows specific rams to be allocated to groups of ewes with specific characteristics. These may be ewes belonging to a specific breed or cross or those identified with a genetic merit or weakness in a particular trait.

Such a situation may be in a composite flock where the breeder might be looking to identify a ram with high genetic worth for a trait such as growth or number of lambs weaned (NLW) to mate with ewes with the lowest growth or NLW BVs.

Amer says the expected increase in annual rates of genetic gain when using best-to-best mating when compared with random mating can be in the order of 5-10%.

In the long term levels of inbreeding will continue to build up in closed flocks even when tactical strategies are in place to avoid mating closely related animals.

However having in place the appropriate inbreeding controls gives breeders the confidence to select elite individuals and retain elite rams knowing the rate of inbreeding is being managed.

Amer says breeders are achieving this by avoiding matings of animals where the degree of co-ancestry or relatedness exceeds a pre-determined threshold and by identifying teams of rams and ewe replacements so that diversity of family lines is maintained.

Often the decisions to use a stud ram or not may be influenced by how closely it is related to the ewe flock. In this situation Amer says relatedness profiling assists breeders make more informed decisions in the knowledge that they are effectively managing future levels of inbreeding within their flock.

This is achieved by eliminating matings between selected animals where the degree of co-ancestry of relatedness exceeds a threshold and also by identifying teams of rams and ewe replacement so that a diversity of family lines is maintained within the flock.

Amer says not all rams have to be chosen in this manner and recommends breeders maintain a degree of flexibility in the size of their ram mating groups is a key when considering whether to replace a sire in a ram team which if left would contribute greatly to relatedness of selected animals.

In some flocks a large proportion of the ewes may trace back to a small number of sires or family lines. In these flocks genetic gain may be compromised by the increasing degree of relatedness between animals complicating selection and mating of young high genetic-worth rams.

AbacusBio is also able to generate customised selection indexes and breeding values designed to achieve specific changes in levels of genetic merit for a specific trait.

Amer says when deciding which ewe or groups of ewes to join with a specific ram, breeders are often faced with the trade-off increasing relatedness of animals within the stud may have on slowing down rates of genetic gain.

Amer says a review of the science shows both the number of ewes lambing and lamb survival rates drop as levels of inbreeding rise.

Getting the balance right is important as a 10 percentage point increase in the inbreeding-co-efficient can result in a 2% reduction in the performance for each trait.

"Once we have a snapshot of where a breeder is at in terms of their inbreeding, we can work out a programme to reduce any further inbreeding and at the same time maximise genetic gain," says Amer.

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Interest rates are at levels not seen for several years, hopefully you will be able to take advantage of this and fix in some of your term debt at these low levels. Cow values are now at more realistic levels, combined with low interest rates, making it easier for young sharemilkers to enter into herd ownership (50/50) contracts. Remember you aren’t the only one who is feeling down. Talk to neighbours and industry professionals, a problem shared is a problem halved. Farming is a food producing business; a growing world population still needs fed. The demand is there for our product, we are just seeing a price correction due to inflated prices last season and the sudden surge in world milk production due to these higher prices.

The main message I am trying to get across, is to stay positive, concentrate on lowering cost structures and take advantage of any growth opportunities that may arise while things are at the bottom of the cycle.

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Software allows breeders to customise

Neville Jopson featured in Country-Wide article (http://www.country-wide.co.nz/article/10254.html), written by Gerard Hall, Country-Wide Publications Ltd.

Ram breeders should find it easier to match rams to clients' flocks with the help of a new software package.

The technology has been developed by AbacusBio for Sheep Improvement Ltd (SIL). It allows ram breeders to customise breeding indexes to meet the objectives and production demands of each client's farming business.

RamFocus is one of a suite of services AbacusBio has developed for ram breeders as part of its ‘Accelerator' breeding package. The package uses SIL records to increase rates of genetic gain in ram breeders' flocks. That then flows into their clients' commercial sheep flocks.

AbacusBio's Neville Jopson says the idea behind the development of RamFocus is recognising every farming business is unique and has its own goals and aspirations.

Jopson says most sheep breeding indexes have been tailored to the industry's production averages, or to the average of a segment of the industry.

While they do a good job for an average situation, the goals of some ram buyers are sufficiently different that a customized index is worthwhile. Some are looking for rams with high genetic worth for one or several specific traits and not others.

RamFocus has been designed to go this next step and allow breeders to customise the ranking of rams for individual ram buyers. This means buyers are able to match the genetic merit of the ram team they buy each year more closely to their farming goals and expectations.

Easily navigated, the software is simply installed on to the breeder's laptop. They then work directly with their clients.

Clients are asked a list of 24 short questions about their property, including the performance of their sheep flock, future breeding objectives and business direction. RamFocus develops economic weightings for each of the traits under selection and builds them into a customised breeding index.

"This identifies for the ram breeder the key drivers that are required to move the genetic merit of a client's ewe flock to the next level. It takes the breeding values and develops a customised index for their clients to use at ram selection time."

Rams are then simply re-ranked in order of their new index. Those that best match the client's needs are ranked from number one downwards.

Jopson says the economic weightings given to a specific trait are not necessarily the same for each buyer as their sheep flock may have different performance levels.

When it comes to buying rams, there is no one size that fits all. For example, some farmers are very concerned about drench failure while some are less concerned because there may be a low risk of a drench failing on their farm. "Having a high or low risk of drench failure can alter the ranking of the rams."

This means farmers in a high risk situation are now able to place more weighting on drench resistance when customizing a selection index.

Jopson also gives the example of the additional profit that may be gained by increasing lambing percentages. It will differ from property to property depending on the lambing performance already being achieved within the flock.

"On properties where the number of lambs born per ewe is low and there is the potential to increase lambing percentage, the profits from producing an extra lamb is high. However when lambing percentages are already high, the marginal value of an extra lamb born can be less because of the poorer survival of multiple-born lambs, especially triplet borns."

On some properties the economic value of increasing lambing percentages may be negative.

Rams can therefore be re-ranked to identify those that will return the highest dollar return to their buyer.

RamFocus is simple to use and has obvious benefits. Adding it to the toolkit allows ram breeders to match their clients with rams that have the best genetic merit for the specific traits they are seeking to improve.

The design allows ram breeders to use it as part of their client management system.

Ram breeders can focus on what is important to each of their clients and assist them when setting the future direction of their breeding programmes. As well as displaying all the breeder's rams, the details of each ram sale can be recorded. This includes who purchased it, the price paid and any general comments.

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AbacusBio Breeder out now

 

 

 

 

 

click image to view pdf

Options for farmers under the Emissions Trading Scheme

More and more farmers recognise the New Zealand Emissions Trading Scheme (NZETS) is here to stay and want to work out how it will affect their farming business.

AbacusBio consultant Jorit Nϋhs says the NZETS could offer farmers good returns, with some of the biggest opportunities in forestry and planting on currently unproductive land.

“We are working with farmers to make sure they are in a winning position economically and environmentally, by demonstrating some of the opportunities available to them. We have designed economic models to help farmers compare the costs and returns of their current land and farm practices to new scenarios incorporating the NZETS. The models also take into account potential risks associated with carbon credit pricing and market fluctuations”.

What can farmers do to reduce their liabilities?

The aim of the NZETS is to reduce outputs which contribute to climate change, such as greenhouse gases. This reduction is termed mitigation. Livestock are the biggest contributors of greenhouse gases in the farming sector, with more efficient livestock having lower methane outputs per unit of product. Therefore, standard measures farmers already use to improve livestock efficiency apply for green house gas mitigation. These include working towards higher lambing and survival percentages and faster growth rates. Fertilser application can also affect a farm’s greenhouse gas output and this needs to be balanced against livestock efficiency. In the longer term, the Pastoral Greenhouse Gas Research Consortium (PGGRC) are aiming to have a product on the market which reduces methane production in ruminants. Their website is well worth a visit, see http://www.pggrc.co.nz/.

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Forestry as a tool to hedge against the impact of the Emissions Trading Scheme

Forestry is now part of the NZETS scheme and it is helpful for farmers to be aware of new regulations and opportunities in the sector.

The Government is currently providing incentives for afforestation alongside the NZETS. The Afforestation Grant Scheme (AFS) is a grant to cover forest establishment costs, to encourage landowners to plant trees where forestry is a good land use option. Under the scheme, farmers retain the value of the trees and the government owns the carbon credits created by the first 10 years growth. Each AFS application is judged on merit including other potential environmental benefits such as erosion control and improved water quality though riparian management. For more information, go to http://www.maf.govt.nz/climatechange/forestry/initiatives/.

Another scheme is The Permanent Forestry Sink Initiative (PFSI) which enables landowners to invest in establishment of native forests and use the credits earned to sell on carbon markets or offset emissions from their livestock operation. This scheme is appropriate where it is decided to change management practices on a piece of land to actively encourage its reversion to native forest, rather than continuing to maintain it in a marginally productive pastoral use.

For forest on land that is not designated as pre-1990 forest land, there is the option for landowners to become a participant of the NZETS scheme itself, and earn carbon credits to sell on carbon markets or offset emissions.

The NZETS will have no impact on the management of forests on land designated as pre-1990 forest land, so long as it is maintained as forestry. However, if this land is deforested and its land-use changed to a non forest land-use, the landowner will be liable to surrender carbon units to the crown, equivalent to the carbon lost due to the deforestation. This is a new liability for owners of pre-1990 forest land, and is triggered if more that two hectares of forest is deforested within a five year period.

This liability is moderated by two mechanisms as below.

1.    Landowners who own less than 50 hectares of pre-1990 forest can apply for an exemption, which will enable them to change the use of the land without penalty. This is particularly relevant if there is some likelihood of the land-use changing in the future.

2.    For those landowners with more than 50 hectares of pre-1990 forest land or those with less that see no land-use change for the forest they own, the crown is offering an allocation, free of charge, as part compensation for the partial alienation of land ownership rights resulting from the implementation of the NZETS.

The landowner must apply for either the exemption from the NZETS or the allocation of units for any given piece of forest land. If there is no application made for either, before the relevant cut off dates, the landowner will be left with the new ETS liability and no way of moderating the effects of the ETS.

Key Future Dates for Farmers

• The “Draft Forestry Allocation Plan” outlines the proposed approach to allocating New Zealand Units (NZUs) to pre-1990 forest owners under the ETS. Submissions on this plan are due by 28 February 2009, so make sure you read this and if you have concerns, have your say. For more information see http://www.maf.govt.nz/sustainable-forestry/ets/information/

• Farmers with forestry blocks less than 50 hectares who want exemptions from the NZETS need to apply by 30 June 2009. Exemptions are also available for other reasons but do not happen automatically

• We recommend farmers read the “MAF guide to Forestry in the Emissions Trading Scheme” at http://www.maf.govt.nz/sustainable-forestry/ets/guide/

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Feed young stock well to reach production targets

Poor feeding of young stock is one of the main reasons dairy farms fail to reach production targets.

Dairy farmer of 15 years and now AbacusBio consultant Peter O’Neill says young stock performance is often compromised to feed milking cows better.

“Young stock are just as important as any other stock and it is really important to set target weights for them and to monitor their progress.” Feeding young stock well will ensure they deliver high milk yields throughout their life and rear healthy calves.

Some key questions to ask are:

• What percentage of your heifers are starting their second lactation and how many of them are late calving or need to be induced in that season? Aim to have at least 90% of your heifers calving the following year (as three year olds).

• Are your six week in-calf percentages and empty percentages for rising second calving cows similar to the herd average or industry targets? Industry targets are a six week in-calf rate of 78% and a nine week in-calf rate of 90% or more.

• If you are not reaching in-calf targets, are you reaching target weight and condition scores? Target condition scores are 5.5 for rising 2-3 year olds. Peter recommends the table below as an incredibly useful guide to the recommended liveweights for maturing stock.

Table - Recommended liveweights for young stock according to their expected mature weight (reproduced from the DairyNZ website http://www.dairynz.co.nz/file/fileid/6358).

To view table please refer to the AbacusBio Breeder pdf version.

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Sheep genetic gain rate tripled since 1999

The rate of genetic gain in New Zealand’s sheep industry has tripled since 1999 according to a recent study. AbacusBio consultant Peter Amer, who conducted the Ovita funded study, said it had previously been difficult to measure genetic gain across the industry, but that has changed. In the study Peter analysed data from the SIL ACE December 2007 run. ACE (Advanced Central Evaluation) is a Sheep Improvement Ltd (SIL) initiative that allows across-flock and across and between-breed genetic evaluations to be made for a number of key production traits in sheep.

“These increases highlight how successfully breeders and industry groups can work together to improve New Zealand sheep genetics,” says Peter. “Rates of genetic gain were low and static prior to the introduction of SIL. The rates of genetic progress are now three times the level they were when it was introduced in 1999.”

SIL’s introduction led to the rates of genetic gain doubling for both fast-growing, wool producing and highly reproductive Dual Purpose Sire Flocks and fast-growing, high meat yielding Terminal Sire flocks. SIL ACE was started in 2004 and led to another spike in genetic progress. It uses data collected through the Meat & Wool NZ Central Progeny Test (CPT) about the industry leading sires to assist in creating linkages between flocks for analyses.

Which factors affect genetic gains?

The main factors that affect genetic trends as analysed in this study are:

• Using older sires and longer generation intervals can slow genetic progress
• The choice of outside sires typically increases genetic gain
• In general, the use of link sires increases genetic gain
• Flocks which recorded FE or FEC made about 50% higher genetic progress across all of the main sub-indexes. However, the actual contribution of FE and FEC to genetic progress was low, so it is assumed these breeders made greater genetic progress because they were more advanced in their techniques.

Improving poorer flocks an opportunity to grow industry

There are huge opportunities across the New Zealand sheep industry to improve on already substantial rates of genetic progress, according to Peter. Wide variations in average flock merit and genetic progress mean there is potential economic gain if poor performing flocks take advantage of the quality genetics available. A spread of $5.00 per ewe in the Dual Purpose index would be worth $150 million to the industry per year. Similarly, a spread of $5 in the Terminal Sire index over 10 million terminal lambs would be worth approximately $25 million to the industry per year.

Using more rams from the best genetic flocks rather than rams from poor flocks could also create considerable economic gains. An increase of 50 cents/year in the Dual Purpose index across the national flock would be worth about $15 million and $2.5 million in Terminal indexes to the industry in the first year and cumulating.

SIL, CPT and ACE will continue to be vital tools in improving genetics in the New Zealand sheep industry. To maintain genetic improvement rates and remain competitive with other livestock industries, it is vital to continue educating sheep breeders and commercial farmers about current genetic tools and to develop new methods such as DNA-based selection techniques.

How does this research affect breeders’ ram buying decisions?

SIL and the large-scale SIL ACE evaluation are powerful tools because they allow breeders to find the ideal sheep genetics for their farming business. SIL breeders are increasingly participating in the SIL ACE scheme because it makes it easier to compare the genetic merit of their sheep against other flocks.

By buying from SIL breeders and using SIL figures to select the ideal rams, farmers and breeders are maximising cumulative genetic improvements in their flocks.

Peter says when buying a ram it is crucial to focus on these cumulating benefits of good selection rather than on purchase price.

To view accompanying graph please refer to the AbacusBio Breeder pdf version.

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AbacusBio consultants developing new sheep breeding strategy for Ireland

AbacusBio consultants Tim Byrne, Peter Amer and Peter Fennessy are working with Sheep Ireland to develop and implement a new sheep breeding strategy for their country.

Tim, who is currently in Ireland working on the project, says the idea is to increase maternal efficiency and reduce costs in order to improve industry profitability.

“There has been a steady decline in the number of breeding ewes in Ireland over the last 10 years due to poor profitability. Numbers are now at 2.7 million, down from 4.3 million in 1997. We need to rebuild the sheep industry and this is a great start point”.

Traditionally Irish breeders used visual appraisal to select for terminal traits within their breeds, with a small proportion of breeders using performance recording for a limited range of traits. The project aims to use new technology and Irish Cattle Breeding Federation (who run Sheep Ireland) systems to integrate sheep breeding with electronic identification and national identification systems.

“Increased recording to include more economically relevant traits together with a big effort to convince the industry of the gains to be made from genetic improvement will increase uptake of performance recording by breeders and the use of these improved rams by commercial farms .”

To improve commercial ewe performance, the emphasis must be on maternal traits that will lead to lower cost and easy care sheep. The team are currently developing a national central progeny test and a number of maternal lamb producer (MALP) groups to use the more accurate data generated from the breeding strategy.

The MALP involves commercial farmers recording data to identify which rams deliver gains in ewe performance in their flocks and which ones do not. Data will feed back into the central database and evaluation systems to help participating pedigree breeders identify superior rams. Participating farmers swap animals to create so-called “genetic links” that allow genetic comparisons between rams from different flocks. DNA matching will be used to link lamb performance data to their sires.

Ireland already has a national identification scheme for individual sheep and AbacusBio consultants are working with them to link that with the new performance recording schemes. Tim is currently working with commercial farmers to implement the MALP as well as developing protocols and systems to manage data recording and capture.

“I’m enjoying gaining more experience in different production systems and aim to bring back some new ideas for the New Zealand sheep industry. New moves are afoot within the European Union for electronic identification to become a compulsory part of national identification systems, with potential positive spinoffs for information management and data capture for breeding purposes”.

AbacusBio consultants Peter Amer and Peter Fennessy have extensive experience in breeding programme development. The pair were in Ireland in August to assist in the sheep strategy development. Amer has been involved in the Irish national beef breeding strategy and development over the past 10 years, while Fennessy has extensive experience developing industry strategies for genetic improvement of plants and animals in New Zealand and Australia.

For more information about Sheep Ireland see http://www.sheep.ie/.

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Meat quality vital for our international markets

A new study of lamb meat quality found higher yielding, faster growing lambs produce meat with poorer colour which could have implications for New Zealand’s sheep breeders.

Alliance Group Ltd conducted the study with AbacusBio consultants, Anna Campbell and Neville Jopson, to evaluate the effects of genetics and pasture on lamb meat quality. The study found high yielding, fast growing animals produce paler meat that is more brown than red.  In international studies, selection for yield and growth has been found to adversely affect meat quality in pigs, beef cattle and poultry.

Anna says breeding programmes currently emphasise growth rates and meat yields, but the emphasis may need to be re-balanced to ensure meat quality remains high. Meat quality is increasingly important to New Zealand’s lamb meat markets and is comprised of several traits. These include meat and fat colour, pH, tenderness and factors affecting the eating experience such as taste, juiciness and smell. Nutritional qualities of meat, such as vitamin levels, essential minerals (e.g. iron) and the types of fatty acids (e.g. omega 3) have become increasingly important to consumers.

Anna and Neville have worked with Alliance to evaluate progeny from the Meat & Wool NZ Central Progeny Test (CPT). CPT sires were used because they are the best in the industry across a range of breeds and the resultant database is an excellent resource for evaluating previously unselected traits, such as meat quality.

Anna says another important finding was that colour stability traits had relatively high heritabilities, which means they could be improved rapidly if included in a selection programme. The speed at which meat deteriorates (goes from red to brown) had a heritability of around 0.4, that is, about 40 percent of variation in this trait is genetic.

Tenderness of meat which was frozen after 24 hours was variable with a number of samples exceeding 8kgF (which is considered tough). The heritability of tenderness of frozen meat was moderate (at about 0.2) and reasonable progress in selection could be made. However, there was little variation in tenderness of meat which had been aged for eight weeks and none of the aged meat was tough (averaging 3kgF). Anna says while this finding is not surprising, it is good to have these data to show the Alliance international markets that tenderness is not an issue for our chilled products.

Selection for pH levels in meat is not necessary, because variation is minimal and few sires had breeding values which exceeded the optimal ceiling of pH 5.8. pH had a moderate heritability of about 0.2. The heritability of traits rated by the taste panel (aroma, flavour, texture, succulence and acceptability) were low. This was to be expected as taste panel measurements are subjective, and there are usually diverse results even with a panel of expert tasters, as in this trial.

This work, fully funded by Alliance, is very important for our export markets and ensuring New Zealand lamb is viewed as high quality. Anna says with increased international consumption of pork and chicken, we need to differentiate our New Zealand lamb as being a reliable high quality product with high nutritive value. Alliance is working with AbacusBio again next year to increase understanding of the relationship between meat quality, growth and yield.

A summary of this report can be viewed at http://www.alliance.co.nz/media_releases.html.

To view accompanying graphs please refer to the AbacusBio Breeder pdf version.

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New staff join AbacusBio Team

Peter O’Neill

Peter joined AbacusBio in 2008 after 20 years in the dairy industry. His experience in dairy farming ranges from equity partnerships to share-milking to dairy farm ownership. This experience gives him an insight into the industry’s complexity from the farm to the national level. A career highlight was winning Otago Sharemilker of the Year in 2003 with his wife Ginny.

Peter works for AbacusBio as a dairy agribusiness consultant with clients and projects in Otago and Southland. His experience and strong understanding of the technical side of dairying mean he can help clients achieve the mantle of increased production and reduced costs. Peter also helps clients with other important aspects of their farm business, including staff management, business growth, profitability, strategic planning and sustainability.

Jorit Nϋhs

Jorit brings his passion for the environment and a broad range of business skills to AbacusBio. He joined us in 2008 after finishing an MBA at the University of Otago. Jorit hails from Hamburg in Germany and studied business and computing in Berlin. After completing his degree in 2003, Jorit worked at and co-owned a speech recognition software development company “8hertz” in Berlin. As the director for professional services and consulting Jorit was responsible for project management, implemention of speech recognition software and client relationships. In 2007, he moved to Dunedin to do an MBA. As part of the MBA he worked as a consultant for Wenita Forest Products Ltd on climate change and the impact of the NZ emission trading scheme on the forestry industry. At AbacusBio he continues to work in the area of climate change, advising our farm clients on the threats and potential opportunities of the ETS by combining farming and forestry and bringing the NZ ETS into a global context. In addition, he recently visited clients in Scotland, where he is involved in the valuation of some new dairy technologies and the economic evaluation of genome wide selection scheme options for the UK sheep industry.

Gemma Payne

Gemma specialises in bioinformatics and genome sequencing processes, along with researching DNA tests for livestock improvement programmes. She has also processed large datasets produced by new sequencing technologies.

Gemma gained a BSc (Genetics) from the University of Otago, before moving to Brisbane to complete an MSc in Genetic Counseling at Griffith University. She then did a summer internship on a bioinformatic project at AgResearch, Invermay, before becoming a research associate there.  She has been involved in the Ovine Genome Project, where her work has included sequencing Romney, Texel and Scottish Blackface ewes using the 454FLX technology and validating sequence data and associated bioinformatic processes. She was also involved in developing the WormStar parasite resistance DNA test.

Gemma joined AbacusBio in 2008 and has been involved in mathematical modelling work (Mathcad programme writing and running), feasibility studies for patent applications, statistical analyses (ASReml), meat quality trial analyses and validation of automated bioinformatic processes. She has also upgraded the AbacusBio website and is responsible for website maintenance.

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New offices for AbacusBio

We have shifted into bigger and brighter offices in the Public Trust Building on Moray Place, Dunedin. Our telephone, fax and email contacts all remain the same.

Our new address is:
1st Floor
Public Trust Building
442 Moray Place

Our postal address is:
AbacusBio Limited
PO Box 5585
Dunedin 9058

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AbacusBio consultants win awards for ground breaking sheep gene research

AbacusBio consultants Jude Sise and Tim Byrne won major awards at the New Zealand Society of Animal Production conference held in Brisbane in June.

Jude’s paper, with the catchy title “SNP and cut: Quantifying the potential benefits of genomic selection tools for genetic fault elimination in sheep” is about the potential to use genetic SNP markers in sheep breeding. Jude won the Innovation Award for the conference paper showing the greatest advance in science and technology. By identifying SNP markers associated with common genetic faults, testing for carriers before mating means the incidence of these faults could be greatly reduced.

“Stud breeders routinely cull up to 30% of lambs due to a variety of faults,” says the abstract for her paper. Despite this culling pressure faults continue to occur, suggesting recessive inheritance or insufficient identification of fault causing genes.

“This would improve their [stud breeders] efficiency by reducing lamb losses and increasing numbers of saleable ram lambs and ewe lambs suitable for selection as breeding ewes.”

In her paper, Jude and co-authors Ken Dodds, Benoit Auvray (AgResearch) and Peter Amer, showed how the use of the SNP technology could have major benefits for both breeders and commercial farmers.

Discovering that dwarfism in some flocks of sheep was caused by recessive genes won AbacusBio consultant Tim Byrne the NZSAP Young Members Award.

Tim’s finding, published as his Masters thesis at Massey University, means the disease can reappear after being hidden for generations when a carrier ram is used. Little is known about the disease. However, dwarf lambs and sheep are unproductive because they usually die young or are culled.

Currently, Massey researchers are working to develop a diagnostic test for the gene responsible.

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Above all maintain a positive attitude

It is widely acknowledged that the world economy is in for a tough next 12–18 months and the New Zealand economy will certainly not be immune. While there are signs the credit markets may return to some sense of normality in early to mid 2009, the timing of the recovery of the real economy is open to wide speculation, some opinions and many unknowns.

AbacusBio farm consultant Jack Cocks maintains key actions for managing farming businesses in these uncertain times are to “concentrate on cashflow, be flexible and quick on your feet and operate low cost farming systems that are robust under both high and low product prices.”

The commodity price falls we’ve seen over recent months have been a result of job losses and recessions in our major export markets combined with increasing worldwide supply of some commodities. The lowering kiwi dollar against the US, yen, and euro has provided some relief to these falls. Continued commodity price falls and less willingness of foreign lenders and investors to fund New Zealand’s current account deficit may drive further currency weakness.

Jack says that despite the challenges facing the agricultural sector there is still a general feeling of optimism amongst our client base. Solid fundamentals of increasing global wealth and a growing world population driving up real food prices still remain. However, what this current crisis has reinforced is that, in this environment of increasing demand for food and low global food reserves, the one certainty is extreme volatility. Businesses must be structured well and prepared to manage tightly through these volatile times.

When we look back at New Zealand agriculture’s history, out of adversity comes productivity growth, innovation, and often an export led recovery. “Businesses with strong balance sheets can look forward to opportunities to grow over the next 12–18 months” says Jack, “especially if they focus on cashflow, flexibility and maintaining a positive attitude!”

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Ewe lambs out, two-tooths in?

With large tracts of farm land being converted from sheep to dairy to capitalise on the dairy boom, more than 100,000 ewes were up for sale at this summer's clearing sales. Two-tooth ewes that would have sold for $130 in previous years went for $50 this year. It was a huge opportunity for sheep farmers to snap up top ewes at great prices, but how many ewes should a sheep farmer buy at the sales, and what is a good price? AbacusBio farm consultant, Simon Glennie, hoped to answer these questions in a study he conducted with funding from Meat & Wool's Farmer Initiated Technology Transfer scheme.

Simon's project looked at the impact of sheep farmers culling ewe lambs and poorer-performing ewes, and replacing them with older ewes. While farmers could profit from this approach in the short term, it was important to evaluate the effect a missing generation of ewes would have over the next few years.

Farmers could do the maths on the back of an envelope but they need to know what the ramifications are for ageing a flock and that is very difficult to explain without a model, ” Simon said.

By modelling the impact on flock age, given standard culling and death rates, Simon calculated break-even prices. The model projected the effects over an entire ewe life-cycle, taking into account the need for farmers to compensate for their increased culling rate. At $103 for two-tooth ewes and $87 for mixed-age ewes, the break-even prices confirm the profit farmers stand to make by buying surplus ewes, but Simon cautioned that every farm situation is different and the merits of the purchase (and a farm's individual break-even price) depended on the quality of stock being replaced.

Simon also found that each 1% increase in expected lambing rate resulted in a farmer being able to pay $1 more for ewes, but farmers need to remember a sheep's performance is a result of its environment as well as its genetics, so the performance gains may be less than expected when the sheep is moved to a less favourable environment.

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Intellectual Property Explained

Coca-cola is the biggest selling drink in the world, and what is their most closely guarded secret? The famous ingredient Merchandise 7X, one of the most successful examples of intellectual property in the world today.

Intellectual property comprises "creations of the mind": inventions (patents), trademarks, industrial designs and Copyright, as well as the ownership of that property. It is the means by which a business protects the knowledge they have spent money and time to acquire, in order to secure an edge in the market.

But how do they ensure they can continue to use that knowledge? This is a fundamental question for researchers and businesses that have developed new products.

AbacusBio managing director, Peter Fennessy, says that protecting these trade secrets is vital, but can be expensive and difficult.

“AbacusBio can advise a business how to protect its position. For example, genetic markers are being used increasingly in plant and animal breeding. There are a lot of patents involved in individual genetic markers and their use. AbacusBio has worked with a number of different clients to work out how to protect and develop their commercial business using these genetic markers.”

There are a number of different ways to protect intellectual property. Taking out a patent, which makes it illegal for others to use the patented technology for a fixed period of time, is a standard method. But applying for a patent can be complicated and expensive, and the business must have the money and power to defend the patent in court if necessary. Another disadvantage is that the technology must be disclosed to the Patent Office, and therefore the world, for it to be protected.

Trademarks are distinctive names and/or signs that distinguish the goods or services of one business from another's. They are the cornerstone of a company's brand, and are therefore very important for successful marketing.

Copyright is a special form of intellectual property used to protect literary and artistic works.

Peter says the best way for a business to protect its intellectual property can be counter-intuitive. Making your intellectual property "common knowledge" (available in the public domain) can prevent competitors registering a patent for the technology themselves, which therefore retains your own ability to use the technology you developed.

Often, keeping this “freedom-to-operate” is the most critical requirement for a business, and this approach allows the business to focus its time and resources on being first to market and therefore gaining a market advantage. It is also free to combine its technology with other technologies to stay ahead of its competitors.

Determining how you will protect your business's intellectual property requires a strong understanding of scientific, business and legal practices, so the advice of an independent expert is invaluable. Peter Fennessy and AbacusBio can advise you of the pros and cons of each option appropriate to your business's individual needs, and help you to decide the best solution for you.

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SNPs are identified when the sequence of base pairs contained within a DNA segment varies between individual animals.

Researchers estimate there to be one SNP every 300 to 500 base pairs and the sheep genome consists of about 3,000,000 base pairs. If SNPs can be identified that are closely associated with or linked to genes of importance, then animals can be SNP tested at a young age and the results used to assist in mating decisions.

In total, researchers aim to identify up to 60,000 SNPs at an average density of one every 50,000 base pairs. Jude says the low frequency of SNPs over a number of gene bases means it would take a number of years to breed out negative SNPs. Jude and Peter are using theoretical modelling to investigate the economic viability of selecting against negative trait SNPs over a ten-year period.

Jude says the elimination of negative SNPs would increase farmers' breeding options because there would be fewer faults in the herd, leading to an increase in diversity and animal quality. “Stud breeders routinely cull up to 30% of lambs due to a variety of faults,” the abstract for a research report states. “This would improve their efficiency by reducing lamb losses and increasing numbers of saleable ram lambs and ewe lambs suitable for selection as breeding ewes.”

Neville explains, "Rankings of a ram purchased from another breeder's flock are extremely conservative when it is first introduced, until key performance data is built up within the new flock. Our programme allows for cross-flock comparison using the SIL Advanced Central Evaluation (SIL ACE) database to place the ram in context in the new flock straight away."

Rankings of outside rams within a flock are usually set to the average in the base year of analysis, and the resulting conservative ranking is a major problem when breeders have spent a big sum for a high-performing ram from another breeder’s flock, only to have it receive a poor ranking in their own flock. It takes up to three years to get a true indication of the breeding values for maternal traits because the breeder must wait until the ram’s ewe lambs have lambs themselves.

“We know he’s performed well elsewhere, but we don’t know how well he ranks in his new flock until he has a reasonable number of progeny in that flock”, Neville says.

Fiona Hely is now in her third year of a Bachelor of Applied Science at the University of Otago, and over the summer she worked at AbacusBio re-working the mathematical driver behind the SIL Ani-Mate software, a tool for reducing inbreeding and determining mate selection in sheep and beef.

It was a great opportunity to use and build on the skills she has learned during her courses so far, as well as earn a bit of money over the holidays!

Hely was originally planning to do a maths degree, but was attracted by the mix of science, maths and business that the Applied Science programme offers. “Instead of just tackling lots of theory, we also learn things we can use in the real world, including a variety of management papers.” Hely receives a Bonded Merit Scholarship, which means she must remain in New Zealand for three out of the first four years after she graduates, but she is confident that there will be many great career options for her here in New Zealand.

While majoring in computer modelling, Hely also takes papers such as Small Business Management as part of the degree. But she still has room in her programme to select interest papers such as sports psychology, which complements the 19 year-old's other passion: running. Currently the New Zealand under-20, 200m running champion, Hely trains at the track or the gym six days a week. As we went to print, she was preparing for the national champs in Auckland in March, but her longer-term goal is to compete at the University Games in Serbia in 2009.

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Brazil's sheep industry is poised to take off. Agriculture and agribusiness are a major sector of the Brazilian economy (accounting for 33% of GDP and 40% of exports) but sheep products make an insignificant contribution compared with beef, chicken and pork. In the last ten years sheep meat consumption has averaged 0.64 kg per capita, while beef, chicken and pork consumption was 23.04, 19.12 and 11.89 kg per capita respectively (FAO Stat). The sheep population, currently about 16 million and growing (Brazilian Agriculture Office - MAPA), comprises different breeds for different purposes but there is no focus on productivity. It is very important that the sheep industry learn to take advantage of Brazil's favourable climate and environment in order to increase productivity.

Most of Brazil enjoys a tropical climate with high average temperatures (24 - 28°C) for eight to ten months of the year. This means grass grows very fast and large quantities of dry matter can be produced. However, most of the country's rain is concentrated in about 5 months of the year, so the remaining months can be very dry. Brazil covers 8.5 million sq km (New Zealand is 270,500 sq km), with almost 3.8 million sq km of pasture and agricultural areas and 13% of the world's fresh water. It is one of the few countries in the world that experiences both tropical and temperate conditions so there is large variation in the climatic conditions, each of which requires its own specialised breeds, production systems, research and expertise.

Along with a much larger landmass than New Zealand, Brazil is also more densely populated, with over 180 million people, and as a developing country it has a highly unequal income distribution. However, its large population represents a huge potential market for sheep products, especially because Brazilians love to eat meat!

Bruno says, "New Zealand is a country with so much to teach in terms of sheep production and technology and AbacusBio is certainly the right place to learn about genetic improvement, production systems and agribusiness. I'm looking forward to exchanging knowledge and making business contacts. New Zealand and Brazil are very similar in human relations, with friendly, peaceful people and democratic governments."

In 1997, Jonathan took the opportunity to buy the 200ha block he had leased since 1993. In 2003, a further 120Ha was also purchased from his brother, which had been leased since 1999. Jonathan had focused on cash returns while leasing coping with infrastructure that was less than ideal. After the high lamb prices of 2002 had instilled a sense of confidence, recent return to lower prices coupled with a fair bank debt has necessitated a modest approach to farm expenditure.

The Bennetts work well as a team with both parties understanding their business position and where their priorities lie. Fencing and re-grassing has taken priority, allowing stocking rate and per head performance to lift to current levels. Now that basic infrastructure is all but in place, the challenges this couple see ahead is fine tuning of management to get to the top level of farmers in the area. In order to achieve this end, the Bennetts have been successful in their bid for becoming the South Otago Monitor farmers.

The South Otago Meat and Wool NZ monitor farm programme shifts from a very successful 4 years with Owaka farmers Kelvin and Rhianda Ross to the Bennetts at Te Houka. Programme facilitator Simon Glennie from AbacusBio will work with the Bennetts and the community group to help the couple meet some of their farming and personal objectives. Along the way, farmers who choose to be involved will benefit from the motivation, expertise and input from peers and industry specialists.

All farmers and interested parties are welcome and invited to become involved with the Bennetts property. Field days are being held in January, March and May 2008.  Contact Simon Glennie for more details.

Jonathan and Julie Bennett with daughter Emma

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The intended outcomes of this work will be robust methods of sire genetic evaluations for hogget pregnancy and hogget litter size, as well as greater knowledge of the factors that influence these traits. Recommendations that come out of this study will then be implemented into the Sheep Improvement Limited genetic evaluation system for use within the New Zealand sheep industry.

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