Discover OCTOBER 2018

Transcription

1 Discover OCTOBER 2018 Innovating for a sustainable future Ramping up research Beefing up dairy returns Building strength with Immunity+ Elevating genomic herd strategy Shaping the future with Progenesis

2 Innovating for a sustainable future At Semex we re working hard to build a sustainable future for our clients and our business. We re fortunate to be a Canadian farmer-owned and directed organization and we believe the best way to look at the future is through our clients eyes. We know who we work for! Every day we commit to keeping farmers on the forefront of change by developing products and solutions that make their businesses more sustainable. Semex is in the genetics business, but the way in which we deliver those genetics and take them to farms is constantly changing. No two farms are the same and that s why we focus on providing a customized solutions approach to each and every client. To make this vision a reality we have to invest in and develop innovative technologies and techniques. RESPONDING TO CLIENT NEEDS Of course, new technologies create a point of difference for Semex in the marketplace, but we re also trying to ensure these advancements remain in the hands of farmers. Investing in research and innovation is also invigorating it fuels our company s entrepreneurial spirit and creates great dialogue amongst our people, our research partners and other industry players. Products and tools like Immunity+ and Elevate really encapsulate our vision. Immunity+, with its ability to identify disease-resistant genetics, is a strong example of how our partnership with the University of Guelph brings innovation that benefits our clients. It lowers management costs and identifies natural immunity, helping producers breed high immune response and healthier animals versus an antibiotic approach.

3 CREATING ECONOMIC ADVANTAGE Our work at Boviteq, Semex s world-class in vitro fertilization (IVF) lab, is another example of our strategic vision. Here we ve developed techniques that are industry leading. There are also products like Elevate, our female genotyping platform, that builds on the success of SemexWorks and OptiMate. This suite of solutions was developed in-house by our talented Solutions Team. These innovations now allow Semex s global field staff and distribution network to create an economic advantage for our clients. It s important to remember that Semex has made a clear commitment to being a leading global genetics company. That s a vision our Board of Directors committed to 10 years ago. Evidence of our increasing global footprint can be seen in many countries. We re investing locally in management and creating jobs. LOCAL AND GLOBAL SOLUTIONS At Semex we realize that we don t have all the needed genetic solutions here in North America. The investment in our production facility in Brazil, which focuses on tropical breeds such as Gir and Girolando, is a good example. By bringing genetic expertise to countries like Brazil we can enhance the role we play in genetic improvement on a global scale. Semex is now also leveraging the strength of Progenesis, our internal product development program, to develop even more world class genetics for our customers. The genetic portion of our business has accelerated significantly in the last five years, and the speed of change has made it difficult for some traditional breeders to keep pace. As a farmer-owned organization our investment in Progenesis is really on their behalf. When we combine the power of Progenesis with our Boviteq expertise, we have the capability to take a tailor made genetics approach to the marketplace. Our commitment to innovation has allowed us to move into a leading genetics position. We re at the forefront of change in our industry, and the genetics and solutions we bring to market will sustain the future of both Semex and our clients.

4 Ramping up research Disruptive technology continues to reshape the genetics industry. Artificial insemination was the first game changer and there have been many more to follow from embryo transfer to IVF, in vitro fertilization (IVF), genomic selection and semen sexing to emerging technologies such as artificial intelligence and gene editing. It really is a case where we have to innovate or we lose ground, says Dr. Mike Lohuis, Vice President of Research & Innovation at Semex, who notes the company is committed to further strengthening its leadership role in technology development. In 2018, Semex increased research and development spending by 50% and will add a further increase in The dairy industry is unforgiving, and with shrinking margins on milk, farmers need better tools to increase output while minimizing their costs. That s why Semex is working to produce genetics that have high productivity while minimizing the costs associated with health, reproduction and well-being, explains Lohuis. FOCUSING ON THREE RESEARCH PILLARS It s very important for us to understand what drives the bottom line for dairy producers because those are the areas we need to invest in, says Lohuis. The industry has done a good job increasing productivity, but there are many costs that occur cow longevity, health, lameness and pregnancy rates are just some of the challenges dairymen deal with on a continual basis. To address these challenges, Lohuis explains how Semex focuses on three pillars of research and development to meet industry needs: Semen Research This is really fundamental to the genetics business, notes Lohus. The Semex research team works to maximize availability of high-genetic quality bulls while ensuring that the semen released for sale will meet industry standards for fertility. Advanced diagnostics are used in the lab to predict and ensure high performance in the field. Embryo Research Semex s Boviteq business is a world leader in IVF performance and quality. We re able to produce embryos with very high quality and very high success rates, but we re not going to rest there, says Lohuis. New IVF tools and techniques are continually being tested to push the envelope on how we can produce more pregnancies per ovum pick up (OPU).

5 Genomic Selection and Breeding Strategy Semex was an early adopter of genomic selection. This has paid dividends for its bull development pipeline and Lohuis expects further benefits in the future. We are continuing to discover better tools and techniques to apply this technology and improve success rates in developing bulls that will meet tomorrow s market demands. With support from research partners and collaborators including the University of Guelph, McGill University, University of Laval, Genome Canada, the Natural Sciences and Engineering Research Council of Canada, Agriculture Canada and a host of others, Lohuis believes Semex really does punch above its weight in the genomic field. He notes that in August 2018, more than 25% of the bulls in top 1000 GTPI list came through the Semex program. ADDRESSING INDUSTRY CHALLENGES It s also important for Semex to focus research efforts on emerging challenges. The dairy industry must not lose sight of the ultimate customer the consumer, says Lohuis. The newest generations of consumers are no longer only concerned with price and product safety, they are also interested in the well-being of the animals in our care and the impact that our operations have on the environment. With this in mind, Semex is embarking on a geneediting project that will eliminate the need to dehorn cattle by creating a lineup of hornless dairy cattle. Similarly, by improving the efficiency of feed conversion, we will use fewer natural resources and emit less greenhouse gas, says Lohuis. IMPROVING ANIMAL HEALTH WITH HORNLESS GENETICS Semex and Recombinetics, a US genetics technology company, have formed an alliance to implement a precision breeding program that improves animal health and wellbeing through hornless dairy cattle genetics. By using precision breeding technology, polled genetics can be reliably introduced into elite dairy lines, eliminating the need to dehorn calves. Traditional breeding for this trait, more commonly found in beef cattle, is inefficient and reduces productivity. The alliance s objective is to seamlessly integrate the polled trait into high-merit dairy genetics through precision breeding. Using gene editing, small adjustments are made to the genome of an animal to delete, repair or replace individual elements of DNA. In this case, the cell s natural repair function is used to replace the horned gene with a naturally occurring polled gene. The result is dairy calves that are born naturally hornless. This is a solution that benefits dairy farmers and meets the customer s desire to buy food from animals raised in a safe and healthy manner, says Lohuis, vice president of research & innovation at Semex. We have a long tradition of delivering worldclass genetics and reproductive solutions for our customers around the world. This innovation serves the needs of farmers while addressing a longtime welfare issue in the dairy industry.

6 BEEFING UP DAIRY RETURNS Dairy producers continue to adopt beef-on-dairy programs to maximize revenue from the calves on their farms. We haven t hit the top of the iceberg yet, says Myles Immerkar, Semex Manager of Global Beef Programs. Based on the feedback we receive we expect to see consistent growth over the next three to five years. This year, Immerkar expects Semex will sell 30% of beef sales for beef-on-dairy crosses. He notes that dairy producers have really come to understand and embrace the benefits a beef strategy can deliver from fewer days open and increased profits to crossbred calves that gain faster, to reduced hard calvings and overall increased genetic value that comes from focusing on the herd s top genetics.

7 PREMIUMS FOR CROSSBRED CALVES Semex s innovative genetic strategy program, Elevate, has proven to be a key contributor to Beef Yield s success. Dr. Steven Larmer, Semex Geneticist and Business Analyst says With Elevate, we can tap rates, cull rates, death rates any information we can gather on that herd, explains Immerkar. An algorithm can then determine the best management strategy for each animal: which animal should be getting sexxed semen; which should go into an IVF program; and also identify beef-on-dairy candidates for beef semen. With this strategy, we produce enough beef-ondairy to meet needs of the current herd size or the operation s growth goals while maximizing the profitability, says Immerkar. It s a huge opportunity to increase profit because generally everywhere in the world we re getting paid a significant premium on a crossbred beef calf compared to a purebred dairy calf. Immerkar notes that many producers are new to the dairy beef market and that means the Semex team needs to invest time with producers to help identify what breeds and what bulls fit their strategy. It s essential to explain the value of certain traits and how they add value to the bottom line. Understanding different markets, the US versus Europe for example, is also important. UNDERSTANDING BEEF MARKETS Throughout Europe, muscle mass is a key carcass trait buyers look for but the story is different in the US where marbling really adds value, notes Immerkar. Traditionally, a Holstein has a small ribeye. Immerkar says Semex wants to help producers select bulls that increase the size the ribeye to increase the yield of these premium cuts. One of the other things we re trying to do is improve carcass weight we re selecting bulls that will add extra carcass weight, will grow more and grow quicker. Calf buyers are also looking for cattle that feed efficiently. It s an important trait and buyers will go back to dairymen who can provide those cattle. That s how calf buyers will pass on value and premiums, says Immerkar. Cattle that meet those specs provide more value to them and they will pay more for those calves. ADDING VALUE WITH SEMEX INNOVATION Immerkar believes other Semex programs, including Immunity+ with its ability to identify diseaseresistant genetics, will inject even more value into beef-on-dairy strategies. We ve started looking at healthier calves, calves that do well when they hit the feedlot. Immunity+ is going to become more important here as the market grows. That s the kind of future traits I think will add extra value beyond those carcass traits. Immerkar feels more producers will adopt beefon-dairy strategies as they learn how it can impact their bottom line and help maximize the profit of calves born on their operation. It s a quality grade market that pays marbling premiums. This has become more important so we re selecting for a higher amount of marbling meeting that demand.

8 BUILDING STRENGTH WITH Immunity+ disease-resistant genetics now represents 37% of Semex dairy sales. What started as a research project more than 20 years ago, before the Semex was established, has indeed changed the game. Semex Geneticist and Business Analyst Dr. Steven Larmer believes there are many reasons for the growth of Immunity+, but the ultimate measure of the genetic program s success is the confidence dairy producers have in its ability to improve the health of their herd. Recently, research work with the University of Guelph has put a dollar value on the return producers can expect from their Immunity+ investment. These studies show Immunity+ sired daughters show less disease, saving dairymen $72 per cow, from birth to the end of first lactation.

9 BENEFITTING FROM HIGH IMMUNITY Larmer says measuring financial payback is important but when he talks to producers it s obvious that Immunity+ has an event greater impact. High immune response means cows get sick less often, they are more productive and more profitable. Ultimately, no farmer wants to deal with sick cows. You can spend your time on the farm doing other thing that are much more productive and satisfying. Many producers point to fewer cases of mastitis and less lameness when describing Immunity+ benefits, but Larmer believes it s the total package that gives this technology an edge. Overall, we try to not focus too much on the individual health event. The big difference with Immunity+ is we re selecting cows that are going to be resistant to any disease that comes their way, explains Larmer. We really focus on how the whole immune system works, and making sure an animal s entire immune system is robust, and effective. When animals have strong immune systems, farmers will see a positive impact on every disease present on a dairy operation, not only the most common ones like mastitis and lameness, notes Larmer. It s also important to understand that health challenges, pathogens and diseases present in your herd may change over time. Farmers need to remember that it will be three years before the cows they re breeding today are in the milking herd. CALF HEALTH GIVES CONFIDENCE Larmer says conversations with Immunity+ producers often start with calf health. The first thing they see is how their Immunity+ sired calves are less likely to look off or sick, or have health events right out of the gate. I think that really helps producers embrace the technology. Over time, farmers start to see the results in their milking dairy herd, says Larmer. When they dig into the data, they see less lameness, mastitis and other diseases. I think Immunity+ has continued to grow since its 2012 launch because more and more dairymen are seeing these real effects on their dairies. Especially the difference between daughters of these sires and the rest of the herd that s been really effective. Larmer notes that other technologies Immune Response compete with Immunity+ but HERITABILITY two points of differentiation that attract farmers are higher colostrum quality and better response to vaccination. It gives their calves a better start and they know that when they invest in vaccination, their animals are going to respond effectively and efficiently to those vaccines. Those are benefits that deliver value. Semex is focused on solutions to help dairymen increase production and profitability, and Larmer feels an innovation like Immunity+ takes that commitment a step further. We really need to understand that farmers around the world get busier each day. Our solutions in many ways are designed to make their lives as easy as possible and spend less time worrying about their cows. Immunity+ really fits that bill perfectly.

10 Elevating genomic herd strategies For the past decade, genomics has dominated dairy herd improvement discussions. Genetic testing has allowed AI companies to identify the very best young sires and enabled producers to adjust breeding strategies to accelerate genetic advances in their herds. Paul Krueger, Semex Vice President, Global Key Account & Solutions Strategy, believes dairy producers are awash with genetic results and information on their animals. What s been missing is strategy and advice on how to utilize all that information to make simple, confident, genetic management and mating decisions. A big part of this challenge is understanding the female component of genetic improvement. How do producers identify the very best females in their herd and ensure they re contributing to genetic enhancement on their farm? AUTOMATING GENETIC HERD STRATEGY Krueger is confident Semex can help address these questons with the launch of Elevate, the only automated genetic herd strategy tool available to producers. With Elevate, there s no more cumbersome spreadsheets and confusing data, says Krueger. Producers determine their breeding goals and strategy by identifying key production, health and type traits. Then Semex s OptiMate mating program takes over, matching female genomic profiles with bulls that improve the herd. Selecting your females and managing samples is all done in Semex s Elevate App. What really makes Elevate unique says Krueger, is its simplicity and ability to link to Immunity+, giving producers the ability to identify their disease resistant females. Tapping into the Immunity+ females is great because our initial data is showing that animals ranked high for immunity have 42% less disease than those that would be average or low within their population, says Krueger. Producers can use that knowledge to identify high, medium and low immune responders in the herd and bolster offspring by using Immunity+ sires on those animals to raise immunity levels across the next generation. GENOMICS F OR FEMALES BREEDING WITH CONFIDENCE Access to Immunity+ through Elevate also plays a key role in helping producers identify and execute their breeding strategy. For example, Krueger notes that identifying genetically inferior heifers allows producers to make management decisions that minimize the potential negative impact they can have on profitability. The same is true for identifying highresponders. These heifers can be confidently bred with sexed semen to realize the highest and fastest genetic gain for the herd. Elevate s biggest attraction may very well be its simplicity. You really can do everything through your phone everything is in the palm of your hand, says Krueger. You can use it to grab samples and utilize it to simplify your sample collection. I think producers will also like the fact that we re going to tell them which animals need testing and identify those that don t. Globally, producers are looking for more efficiency in how they invest their dollars and Elevate can help, adds Krueger.

11 TAKING LARENWOOD FARMS TO THE NEXT LEVEL Like many dairy producers, Chris McLaren of Drumbo, Ontario s Larenwood Farms has been genetic testing heifers for years. For McLaren, knowing what to do with the information and how to use it to make better breeding decisions has always proved challenging. But things have changed since he first logged into Elevate in May It s definitely taken things to the next level, says McLaren who milks 100 Holstein cows with his family in a sand-bedded, freestall dairy. Larenwood is also a threetime winner of the CanWest DHI National Herd Management Score Award. After playing catchup to test older heifers when he started using Elevate, McLaren now tests newborn heifers each month and has acted quickly based on the results. Elevate includes the Immunity+ disease resistant genetics program and it s factored heavily in McLaren s decisions. Any heifer that s a low immune responder we re breeding them right away to Immunity+ bulls. With that information, we also use the OptiMate program to select heifers for Semexx sexed semen. McLaren also identifies heifers to be bred to young sires and cows that should be bred to beef sires. We re really trying to speed up genetic progress of the herd by pinpointing the ones that will have the best genetics for the future. Strategically, Larenwood Farms, wants to stay above the industry s genetic improvement curve and produce heifers that have the genetics and the potential to excel. I just see Elevate as a way to accelerate this and put some genetics in our herd that will produce healthy, long-lasting, well put together animals, says McLaren.

12 Shaping the future with In the genomics era, the success of AI companies is highly dependent on their ability to develop their own young sires. At Semex, its internal product development program, Progenesis, is now producing top young bulls and helping the company tap into leading genetics around the globe. Semex Chief Operating Officer Brad Sayles says the emergence of genomics has initiated significant change in the cattle genetics industry. The accelerated pace of change means it s crucial for a company like Semex to understand the needs of today s markets, anticipate demands five years from now, and then align the organization to meet and service those needs. The goal of Progenesis is to produce world class genetics for customers, including bulls for Semex, female embryo donors, females for sale and embryos. It became apparent that if we were going to be able to access elite genetics for clients, then we had to have some ownership stake in some bloodlines to produce bulls for our customers, says Sayles. The strategy also has another component with the development of Progenesis, Semex could also leverage some of its elite animals to gain access to other elite bloodlines in the marketplace. ALIGNING WITH CLIENT NEEDS Overall, Semex s goal is to produce 25% of Top 1000 GTPI Sires with Progenesis sires contributing 35 to 45% of this goal. Sayles notes that Semex s eye to the future focuses on developing a deep understanding of the operational aspects of our customer s business to understand what drives their profit what makes them make money, what costs them money, and what can save them time. For Sayles, the goal was to align the Semex organization to ensure Progenesis reflected this understanding, and delivers producers needs in three key areas including: productivity; health and fertility; and functional traits such as good udders and strong legs that support high production over many lactations. The first Progenesis high genetic animals were born in 2016 and the program has continued to grow. It s accelerated quite quickly because we leveraged all the different resources that we had at Semex, says Sayles We have people assets. We have genetic assets. We have technological assets through Boviteq. Our strategy really allowed us to tap into the tremendous resources within our control.

13 MEETING GLOBAL MARKET NEEDS Progenesis is a big investment and Sayles believes Semex clients will see significant benefits over the next 12 to 18 months. We really try to take a global approach and we re very pleased with the position of our product line. A lot of these bloodlines are just coming to the marketplace now, adds Sayles. We believe we have probably 25 to 30% of the world s elite bulls at any one time, and for a company like Semex, that s a strong achievement. Sayles is excited about the size and scope of the Progenesis program. This year, with the number of calves being born and the females we have access to, we have an opportunity to provide product for all different types of markets. He notes that Progenesis has produced strong bulls in Italy, Germany and across Europe. There s also elite performers in the US and South America. All of these countries have customer specifications that are a little bit different, says Sayles. The size and the scale of our program allows us to have not only genetic diversity but also diversity in the type of product line. The power of Progenesis also helps fuel strong partnerships. It gives us the ability to leverage our genetics for access to genetics from some of the most elite breeders in the world, say Sayles. It really does ensure that Semex and are clients our well positioned for the future.

14 Discover OCTOBER 2018 FRONT & BACK COVER PHOTOS BY HAN HOPMAN