Global Change In A Traditional Industry

Brian AlbertoniWorld Wide Sires

Adapting to change used to come slowly butChange Acceptance is Accelerating!

Time to reach 25% adoption in North American Households!

Service YearsElectricity 46Cars 44Telephone 26Personal Computers 15Cell Phone 13Internet 7

Source: Dr. Terry SmithPresident of Dairy Strategies Ltd.

We will change the world, BUT we must face the Truths of Change!

In a growing world, we are challenged to make more with less.

We need to feed more people…

56% more food

10 billion people in 2050

The Race To Feed The WorldSince the launch of genomics in 2009, total milk production

per cow has increased 12.9% annually. (in the USA) with a bigger contribution coming from genetics than ever before.

Genetic companies need to continue to focus on total Kgs of solids in addition to the current trend toward health traits –balance

Genetic companies must provide diversity of genetic production profiles to fit a diverse global industry (ie High milk volume or higher components? ) NO ONE SIZE FITS ALL!

https://philschatz.com/sociology-book/contents/m52812.html

TRUTH OF CHANGE #2: Every generation gets more removed from understanding Agriculture

We have the Burden of Proof… Challenge: Reduce Carbon Emissions and decrease inputs (fertilizer, water, land)Solution – Genetic selection to increase per animal efficiency – feed efficiency traitsSolution – Genetic selection to decrease body size – mainly stature – never before have we focused so much on sire lines to reduce stature. BUT, we have to change public perceptions about sustainability

Challenge: Growing perception that we have animal welfare issuesSolution: Increased genetic selection on fertility coupled with a move to heat detection technologies to replace synchronization programs.Solution: Increased genetic selection on Wellness Traits reduces antibiotics and improves welfareSolution: Faster adaptation of polled genes?

Challenge: Improve food quality and nutritionSolution: Research and genetic selections on proper casein, lactose and other components related to higher quality and higher digestible milk. A2A2 now, but what’s the next discovery?

Challenge: Reduce pollution and run off Challenge: Communicate food safety to consumers

TRUTH OF CHANGE #3: Milk consumption is being replaced by other beverages

Milk consumption continues to decline –falling 25% from 1996 to 2016

https://www.riseofthevegan.com/blog/dairy-milk-consumption-fallen-25-percent

How did we get so Blindsided?

Milk Consumption Trendsas Affluence Grows

In 2016:

Plant based milk alternatives increased by triple digits

Alternative milk beverages will reach a projected $28 billion by 2021

https://www.feedstuffs.com/news/dairy‐alternative‐beverage‐consumption‐continue‐upward‐trend

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1200U.S. Dairy Industry ‐‐ Number of Dairy Farms

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1200U.S. Dairy Industry ‐‐ Number of Dairy Farms

Farms (thousands) – left axis

Year‐to‐year change (percent) – right axis

Source: Kevin Dhuyvetter, Ph.D. Elanco Cattle Technical Consultant

Truth Of Change #4 – Farm Numbers Are Shrinking

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1981 1986 1991 1996 2001 2006 2011 2016

Price, $/cwt

Monthly Average All Milk Price ‐‐USSource: USDA NASS

Truth of Change #5 – Global volatility is here to stay

98‐07 Avg = $14.50 

> $15.95 = 20.8% 

< $13.05 = 33.3%81‐95 Avg = $13.03 

> $14.33 =  2.8% 

< $11.72 =  6.1%

08‐17 Avg = $18.11 

> $19.92 = 23.3% 

< $16.29 = 23.3%

Source: Kevin Dhuyvetter, Ph.D. Elanco Cattle Technical Consultant

Our Challenge Is Thriving In A Rapidly Changing World

Consolidation is necessary in any industry

As a global AI company, our genetic solutions must be ramped up to focus on profitability traits for our farmers.

AI companies must evolve to provide services to help farmers access technology and manage their data to make better decisions that impact farm efficiency.

Progressive farmers will embrace every strategy to maintain an edge – genomic testing to identify the females to provide replacements, unique herd indexes to fit the specific farm goals and adapt to new technology quickly.

The Evolution of the A.I. Industryhas always been solutions based

BUT today we need a REVOLUTION

1940’s•Spermatozoa successfully frozen in England

1970’s• U.S. A.I. technicians

begin using tail chalk for heat detection

• Focus on developing mating programs

1980’s• Synchronization Begins

1990’s• BST• Ovsynch developed

2000’s• Sexed Semen

2009• Genomics are

introduced

2020• Connecting our

producers to “Data”

Revolution!

Data Revolution is imperative Our current revolution is DATA ANALYSIS. Measure and analyze data to help farmers scrutinize details and set goals for progress, profitability and success.

Without data analysis we are just another person with an opinion.

The revolution of genomic selections will play a bigger role in on farm decisions globally

Genotyped Animals In Database By Region (2018)

Wiggans –AABP Genomics Webinar –Jan. 16, 2019 (29)

Wellness Trait Index™ (WT$™)Places economic weights on cow wellness traits, directly estimating potential profit contribution of these traits for an individual animal.

Holstein WT$

Jersey WT$

We are Embracing Revolutionary Genetic Changes

Calf Wellness Index™ (CW$™)Places economic weights on calf wellness traits, directly estimating potential profit contributions of these traits for an individual animal.

Holstein CW$

Jersey CW$

We are Embracing Revolutionary Genetic Changes

There are so many new genetic related traits to come!

April 2019

Genomic predictions for crossbreds (77,000 database)

Earlier first calving age (heifer maturity rate = $2.50/day)

Future: More traits already tested in USDA research’

Individual feed intakes measured Heat stress: Cows adaptability in various heat indexesPersistency: Productivity in late vs. peak lactation

Council on Dairy Cattle Breeding Industry Meeting, Reno, Nevada – February 25, 2019 – Paul Van Raden

Revolutionary Genetic Changes

There is much more we can do with chromosomal matings, earlier IVF, gene editing, etc

BUT….what will be allowed?

Wiggans –AABP Genomics Webinar –Jan. 16, 2019 (29)

Predict 50 years of genetic progress (Cole, 2018)

Trait 50-year progress 2017 mean 2067 mean

Milk (Kgs) +4,231 12,270 16,501

Fat (Kgs) +241 457 698

Protein (Kgs) +155 374 529

Productive life (months) +65 26 91

Body size (Kgs) –230 680 558

Udder composite +2.65 0 2.65

Daughter pregnancy rate (%) +26 29 55

Cow conception rate (%) +42 35 77

Heifer conception rate (%) +21 57 78Council on Dairy Cattle Breeding Industry Meeting, Reno, Nevada – February 25, 2019 – Paul Van Raden

What is our potential?What’s the best cow we can make?

A “supercow” constructed from the best haplotypes in the Holstein population would have an EBV for NM$ of +$7,515 !

Council on Dairy Cattle Breeding Industry Meeting, Reno, Nevada – February 25, 2019 – Paul Van Raden

Are we complacent?

Taxi industry started in 1897 in New York City

Uber started in 2009 in San FranciscoLyft started in 2012

2018 Uber and Lyft combined

= 54% of ride-shares.

10 years ago – 0%

Uber and Lyft continue to earn more market share.

If we don’t know where we are going….

…we will end up someplace else!-Yogi Berra

Together this Dairy Industry will work together to Adapt and Change – we

must be quick, we must listen and we must focus on farmer’s needs

Thank You! Questions?