Potential beef industry benefits from increased uptake of genetic evaluation technologies in New Zealand

Paul Charteris , Stephen T. Morris and Dorian J. Garrick
Institute of Veterinary, Animal and Biomedical Sciences
Massey University

Executive Summary

Increasing the rate of genetic advance for sale live weight within bull-breeding herds in one year (from 1.5 to 2.0 kg/year) can increase accumulated profitability of individual commercial beef cattle producers by $344.

Increasing the rate of genetic advance for sale live weight within bull-breeding herds in one year (from 1.5 to 2.0 kg/year) can increase beef industry profitability by $670,000 (net of costs relating to research and extension to increase technology uptake)

Increasing the proportion of bulls selected for sale live weight from 70% to 80 or 90% increased beef industry profitability by $408,000 and $1,852,000 respectively.

Further benefits can arise through encouraging other breeding practices such as an increased adoption of crossbreeding.

Introduction

Genetic improvement provides potential to improve profitability of beef cattle farming in New Zealand. A small proportion of beef cattle (4%) are located in registered herds where genetic selection occurs. Most beef cattle are managed in commercial herds where bulls are purchased from bull-breeders, thus genetic advance within bull-breeding herds is disseminated to commercial herds. Within commercial herds, progeny are harvested at processing plants. Accordingly, industry genetic change is dictated by the direction and rate of progress achieved in the registered herds and realised by the beef returns less costs achieved at the processing plant. Genetic progress is achieved by choosing the better individuals to use as parents of the next generation. This requires definition of the attributes that constitute a better individual.  The image (stolen from Scott Newman) shows the flow of genes down through an industry and financial reward via payment for value back up through an industry.

Areas which will enhance beef industry profitability through genetic improvement include:

1. Enhancing the rate of genetic advance for economically important traits within bull-breeding herds.
2. Increasing the use of objective measures in bull purchase decisions.
3. Increasing awareness and adoption of other modes of genetic improvement such as across-breed selection, planned crossbreeding programmes.
4. Capitalising on significant advances made as part of a previous Meat New Zealand-funded research programme.

Analysis

Potential industry benefits from increased uptake of genetic evaluation technologies  were analysed by modelling the potential impact of genetic improvement on beef product flows in New Zealand.

Breeding objective development

An economically-based breeding objective was developed to derive economic values for increased live weight in beef cattle. In essence this breeding objective was based on a farm biological and economic model. Biological factors included in the model included cattle live weights, feed requirements, annual mortality, culling and heifer replacement rates. Model economic inputs included such parameters as the cost of pasture management, transport, and marketing of beef cattle as well as returns of each class of cattle.

In essence, a (sophisticated) farm budget was prepared and beef cattle traits in this budget were adjusted to assess the potential impact of genetic improvement on farm profitability. This breeding objective was based on a straightbreeding programme in which British breed (Angus and Hereford) steers were sold for harvest at 300 kg carcass weight at 20 months of age in a self-replacing beef breeding cow herd.

Economic Values were derived on a per cow basis to estimate the likely impact of genetic change on profitability of an example beef cattle herd. Discounted gene flow techniques were used to model income over a number of generations from a single round of selection. Details of the breeding objectives model and analysis of beef industry flows are available on request from the authors.

The potential financial impact of increased uptake of genetic technologies was modelled through consideration of the following scenarios:

1. Effect of improved rates of genetic progress on beef cattle farmer profitability
2. Effect of impact of improved genetic progress on beef industry profitability
3. The potential impact of increased adoption of Estimated Breeding Values in selection decisions on beef industry profitability.

Results

The potential impact of improved rates of genetic progress within bull-breeding herds on beef cattle farmer profitability are shown in Table 1. The model farm was assumed to comprise 200 beef breeding cows. Financial benefits are in net present values (discounted over a 20 year time horizon) accruing from one years selection for sale live weight in bull-breeding herds. A time horizon for investment over 20 years is appropriate to track the flow of genes over generations.

Table 1: Sensitivity analysis of change in farm profit (accumulated over a 20-year time horizon) for change in rate of annual genetic progress for sale live weight. Dollars are in Net Present Values.

Table 2: Sensitivity analysis of change in beef industry profit (accumulated over a 20-year time horizon) resulting from four rates of annual genetic progress for sale live weight (LWT). Dollars are in Net Present Values.

Table 2 shows financial benefit to the New Zealand beef industry from increased rates of genetic change in sale live weight over a 20-year time horizon. Dollar benefits are in net present values and represent financial benefit from one round of selection (i.e. one years worth of selection) that accrue due to higher carcass weights of a bulls progeny and progeny in subsequent generations. Account was made of increased feed demand in breeding cows as results from an increase in mature live weight as a correlated response to selection on sale live weight. It was assumed that the annual rate of genetic gain was applicable to 70% of bulls sold annually.

Table 3: Sensitivity analysis of change in beef industry profit (accumulated over a 20-year time horizon) resulting from four levels of uptake of Estimated Breeding Values for one year of bull purchases for sale live weight (LWT). Dollars are in Net Present Values.

Table 3 shows the increase in beef industry profitability resulting from an increased rate of uptake of using EBVs as a sire selection tool. It was assumed that selection response among herds using EBVs was 2.0 kg in sale live weight per annum and that herds not selecting sires on the basis of EBVs were not applying selection pressure for live weight traits.