He told a South Island Dairy Event workshop on using livestock to grow equity that sales figures for the past six years showed animals with high Breeding Worth (BW) had always sold at higher prices. This was true even when there was strong demand for stock when there were a high number of conversions in 2008 and also when the dairy payout dropped and stock prices devalued.
“Essentially the market is supply-and-demand driven and factors such as the forecast payout, dairy conversion volume and live export activity will influence prices,” South Island dairy livestock manager Paul Edwards said.
“But animals with high BWs have always done well so invest in livestock which are attractive to the market.”
Jackson said BW was the estimate of the annual profitability of the progeny of an animal and so was important for an investor as an indicator of the likely return on their investment when the animal produced a heifer calf. Production Worth (PW) forecasted the average annual profitability of an individual cow during its expected lactation lifetime.
“Remember genetic gain is like compound interest, it is cumulative and permanent and whether you like the BW and PW system or not, it is still the anchor for market prices at the moment.”
Edwards said buyers of stock should also think about traits other than production, somatic cell counts, body condition scores, and drying off and calving dates when buying stock.
“Don’t get hung up on the price. Get the animal records prior to seeing them and then inspect the animals yourself and don’t deviate from your buying criteria. Don’t let emotion play a part.
“Boot out the cows you don’t want and ask the vendor why they are selling. If it’s a line of rising one or two-year-olds then ask to see the herd as well so you can have a look at what the girls are going to grow into.
“And always have a contract. There are still cases of what the farmer has bought are not the animals that come off the truck onto the farm.”
Herd ancestry and reliability were also important, Jackson said.
“If you are selling make sure you are doing at least four herd tests a year as this will give you accumulated lactation data that improves your reliability. Indices with reliabilities below 50% should be treated with caution when buying.”
He said to grow the herd as an asset farmers needed to cull on production, use sires with high genetic merits, maintain good herd records by keeping up with mating and calving recording, and herd test regularly.
“It also makes obvious sense to eliminate any uncertain sired calves each year by using a DNA sire search service. Otherwise these heifers will enter the herd as half recorded and lose up to $1000 from their eventual value compared to the minimal cost of a DNA search.”
