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Holstein Canada's Annual Report for 2010
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Holstein Canada A Torchbearer
for Dairy Producer
Profitability
Holstein Canada • 20 Corporate Place, Brantford, ON N3R 8A6 • Tel: 519-756-8300 • Fax: 519-756-3502 • www.holstein.ca
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Table of Contents
President’s Message ................................................................ 3
Board of Directors’ Report .................................................... 4
Secretary-Manager’s Report .................................................. 7
Classification Activity .............................................................. 8
Summary of Registrations ...................................................... 8
Action Taken from 2009 Resolutions ................................... 9
Statement of Operations ..................................................... 10
Financial Report ..................................................................... 12
Mission Statement:
To provide leadership through genetic
improvement programs that enhance profitability for all
dairy producers.
Canadian Holstein farm families—and cows—celebrated the Olympic Torch
Relay ahead of the 2010 Olympics. In Sussex, NB, Clarkes LHeros Wysper (VG-85-2Yr) was the centre of attention in this long-standing agriculture community. David Callum of Sussex View Farm Ltd., Roachville, NB brought the appropriately-ringed Wysper to the party.
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The identification of pathogens
and consistent management
of disease in our livestock production are the responsibility
of all
Our breed and Association
development vision is in line with our
strategic plan
P laying off the excitement of an olympic year and the dawning of a new decade, it is with pleasure that
I share my thoughts as Holstein Canada’s President.
First of all, it was a privilege for me to have been able to share, exchange, and contribute in helping to establish some ideas from those who are very interested and dedicated to our Association.
The consultation process, undertaken last spring, revealed your interest and support in Holstein Canada. The content and results of this survey continue to help us to better target the goals that we want to reach today and tomorrow.
National traceability, in 2011, will be an opportunity for our organization to complete the identification of Canada’s dairy herds. Holstein Canada’s leadership proposes to include a health component to this traceability.
The identification of pathogens and consistent management of disease in our livestock production are the responsibility of all. Moreover, a comprehensive databank, through the co-operation of industry partners and governments, will lead us to a better performing and more durable cow.
Information sharing and strategic alliances with our partners are part of Holstein Canada’s leadership for tomorrow.
Genomics is gradually making a place for itself in our selection programs. You answered positively to the message launched last year. The increasing number of subjects undergoing genomic evaluation helps us define with greater accuracy the parameters of our genetic evaluations. Genomics, when effectively used, is an important component in our genetic improvement toolbox.
Our classification program is envied worldwide. Our classifiers, through their training and expert advice, are resources that we must use more efficiently to better
target our breeding goals.Through the use of new tools that are
made available to you in the field or on our renewed website put us on the right path. Utilizing all forms of communication, we want to be even closer to you—wherever you are! On that note, thank you dear members; I appreciate you sharing your ideas or comments by e-mail, letter, or telephone.
I wish to thank all my fellow directors. Our breed and Association development vision is in line with our strategic plan. To have a financially-healthy organization is an ongoing goal for board members.
The implementation of the Governance Committee has been a turning point in how our Association is directed. The implementation of board governance and accountability policies have and, will have an impact on how Holstein Canada is managed. Currently, the relevance and goals of all the different committees are being evaluated.
In closing, I wish to sincerely thank Holstein Canada’s entire staff for its support and commitment to our Association. Throughout the years, I have appreciated all the great qualities you possess. Without you, our organization would not have the prestige that it is bestowed.
Specifically, thank you to Keith, who guided Holstein Canada’s destiny for 17 years. Your contribution at every level is of great value. On behalf of me, and the board, I thank you for having shared your wonderful, professional qualifications and human attributes; we and the entire Association will continue to benefit from it.
Finally, I want to thank my wife, Claire, and my children whom I adore. My brother Richard and his family have totally supported me during my mandate. I would not have been able to enjoy such a wonderful experience without them. I thank you with all my heart!
President’s MessageGermain Lehoux, Saint-Elzéar, Qc
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T he Board of Directors of Holstein Canada is responsible for the vision, values, and goals of our
Association. Your Board of Directors held four, two-day meetings in 2009 to direct the future and protect your interests—the owners of Holstein Canada.
An astounding 31% response to the membership survey re-emphasized that members care deeply about Holstein Canada and the future direction of our Association.
As a result of the survey, we have established and approved a 2012 Strategic Plan that includes the six following priorities:
1. ensure that Holstein Canada provides value to members
2. provide board and staff leadership3. improve communication4. develop strategic alliances5. pursue research6. enhance advocacy of issues,
e.g. animal health, national traceability
The board spent time in 2009 working with a consultant to develop a National Director Board Development Strategy. This included the roles and responsibilities of the board, as a whole; the roles and responsibilities of board members; board and staff roles, and; monitoring board performances.
From a membership suggestion, the board initiated staggered terms for directors in eastern and western Ontario and eastern and western Québec to alternate National Director elections. This provides the opportunity for the election of one director in each of these areas each year and to prevent the turnover of all directors at once in a given area.
The board has asked staff to explore the possibility of a two-way, electronic Certificate of Registry exchange for clients.
We have established and appointed an Audit Committee to monitor and safeguard the ongoing finances of Holstein Canada.
The Board of Directors has established a Governance Committee that is working diligently to develop policies and strategies to ensure board leadership for your Association.
July 21, 2009 was a history-making day for the Association and the Canadian dairy industry with the unveiling of two life-size, bronze sculptures by the world-renowned sculptor Joe Fafard. When Holstein Canada’s new, office building was designed and built in 2000-2001, the intent was to erect a permanent, visual image that was identifiable of who we are and what we do. Kanata, the cow, producing nutritional wholesome milk contributing to human health, is symbolic of the beginning and the recording of ancestry and maintaining the Herdbook. Her daughter, Kanata Bella Futura, symbolizes the future, the priority, and value we invest in our youth programs to develop, mentor, encourage, and provide opportunities for this segment—the future leaders of tomorrow’s dairy industry.
The Young Adult Committee spent energy and time organizing and developing a more appealing young adult program. A Facebook page is being quickly utilized.
On a recommendation from our Show Committee, we ensured that all animals exhibited at the 2009 Royal Agricultural Winter Fair (our National Show) had no more than 1.5 inches of hair on toplines. Exhibitors and all involved with this aspect of our business have applauded our efforts. We also agreed to continue the non-milking Senior Yearling Class at the Royal.
We embrace and financially support
the most envied youth dairy show in the world. The Canadian 4-H Classic Junior Dairy Show had over 350 competitors from across Canada in 2009.
The inaugural, Longtime Production Class at the Royal received accolades as did the elimination of Senior and Reserve Senior Champions in both the Red and White and Black and White shows. In the Red and White show, we added a Milking Yearling Class, a Five-Year-Old, Mature, and Junior Breeder’s Herd Class for the first time.
The board endorsed the recommendation of our Classification Advisory Committee to increase the emphasis on mammary system from 40 to 42% and feet and legs from 25 to 26%. We decreased dairy strength from 25 to 22%. Rump remains the same at 10%. Herd Trend Reports are a valuable enhancement through our classification program of breed improvement.
Our nomination and subsequent acceptance of Dr. Gordon Atkins, AB, as the recipient of the Dairy Cattle Industry Distinction Award at the CDN Annual Meeting in St. John’s, NL, is a fitting tribute and recognition of an innovative leader in our dairy industry. Gordon has given much
Board of Directors’ ReportChairman Glen McNeil, Goderich, ON
insight into identifying the most profitable dairy cow.The board believes genomics will be the single,
greatest development in the modern history of dairy cattle improvement. However, members are encouraged to embrace genomics with prudence in these early stages of evolution.
Traceability and animal health continue to be a major concern for our consumers, our members, and our board. Holstein Canada totally supports the Canadian National Health Project to create a National database to assist with herd management programs. A National Genetic Evaluation System will also be developed to allow for genetic selection
to improve disease incidence rates. This project concentrates on mastitis, lameness, cystic ovaries, displaced abomasums, ketosis, metritis, milk fever, and retained placentas.
Holstein Canada’s world leadership is again at the forefront as we prepare to host the 2012 World Holstein Conference. Proud to be selected, we are already in the planning stages. The co-chairs are Past Presidents Pascal Lemire, La Visitation, Qc and Brian Leach, Cobden, ON.
On behalf of the Board of Directors of Holstein Canada, I would like to thank you for your support, confidence, and trust. Please be assured that we will continue to work diligently on your behalf.
On a clear, frosty morning in January, the structural details of bronzed Kanata and her calf, Kanata Bella Futura, appear prominent and life-like in front of Holstein Canada’s head office.
(l-r rear standing) John Iversen, AB; Ron Sleeth, ON; Dale Strudwick, SK; and Richard Bosma, BC (l-r front) John Davidson, NS; Mario Perreault, Qc; Denis Fournier, Qc; Paul MacLeod, ON; Germain Lehoux, Qc; Glen McNeil, ON; John Buckley, ON; Serge Blanchette, Qc; and Secretary-Manager Keith Flaman
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Dardel Gibson Orie (EX-94-3E-CAN)• 8-Year-Old for Fat• 1 Super 3; 3 Superior Lactations• Breeder and Owner: Dardel Holsteins,
Edmonton, AB • Sire: Silky Gibson (EX-96 ST’99)
Production (kg)08-03 305
BCA(Deviation)
Milk 17,611 320 (+81)
Fat 1,247 7.1% 620 (+402)
Protein 581 3.3% 342 (+91)
Total 1,282 (+574)
Karona Storm Alfa (EX-91-4E-CAN)• 9-Year-Old for Fat• 3 Superior Lactations• Breeder and Owner: Pierre Caron,
Plessisville, Qc • Sire: Maughlin Storm (EX-EXTRA’96)
Production (kg)09-08 305
BCA(Deviation)
Milk 19,970 408 (+110)
Fat 979 4.9% 544 (+233)
Protein 596 3.0% 385 (+77)
Total 1,337 (+420)
Canadian Champions 2009
2009 Education Award Winners
William Vosman, Saint-Andrews, NS
Trivee
Martina Pfister, Mitchell, ON
Ulmar
Mitchell Kieffer, Teeswater, ON
Belmoral
Roxanne Montplaisir,
Trois-Rivières, Qc Monyka
Marc-André Dubois, Saint-Flavien, Qc
Jolibois
Kelvin Friesen, Morden, MB
Lasaac and Pentium
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T he effects of the 2008 financial meltdown continued through 2009. While milk prices in
Canada remained stable, most other countries in the world saw prices that were the lowest in decades. Compounding the situation were high-commodity prices. While eroding profit in Canada, high inputs caused many dairy producers around the world to swim in red ink.
Increased contact by phone, e-mail, or in person, to assist customers who have encountered some hitches along the way, has resulted in high customer/member retention. On-farm visits—usually triggered by tag retention concerns, outstanding parentage disputes, and non-compliance issues—increased during the year. Customers and members have said they appreciate any help or suggestions that make managing their dairies less demanding.
Collaboration with industry partners has proven to be beneficial. By promoting and demonstrating the benefits of genetic improvement programs as important tools in adding to the profitability of dairy farms, we continue to generate new customers and members.
While the number of dairy producers
in Canada dropped 3% in 2009, the number of members in the Association decreased by only 1%.
Regarding core services delivered by Holstein Canada (registration and classification), 2009 was a banner year with a record 275,557 animals registered. Also, the total number of animals classified in the all-breeds program surpassed the previous, high-water mark. The mid-round service continues to draw an increased number of users.
Program changes developed in 2009 and implemented at year-end will facilitate additional registrations in 2010. While not all dairy producers wish to pursue only pure Holstein status, all progressive dairy producers recognize the value of good record-keeping and maintaining performance documentation on their animals. In broadening the base of registered animals, it is important to ensure there is full disclosure of information, which aids breeders in making informed decisions.
Although exports of live cattle rebounded from 2007 through 2008, the bear market returned in 2009. A world oversupplied with low-priced milk put pressure on the international demand for cattle. This was coupled with relatively strong prices for replacement cattle in Canada. When exports are strong, there is usually a trickle-down effect generating an increase in domestic transfer activity. While year-over-year total transfers dropped by 11%, the lion’s share was due to weakened demand from the export market.
Maximizing and modernizing electronic technology is a continual work in progress. Approximately 80% of dairy farms use electronic access in their day-to-day business. Demand for electronic services—from sending and receiving documents, accessing information, and paying bills—is
increasing and will continue to do so. Holstein Canada business and electronic technology complement each other. Although there continues to be some challenges with high-speed access in a number of areas, these are shrinking and will continue to shrink. In the meantime, web services must acknowledge these real encumbrances of many customers.
Seventy-seven percent of registration applications now arrive electronically. One half of all registrations arrive through milk recording. A number of options were introduced in 2009 to allow for convenient transfer of animals. Some practices in the field led to the application of an extra level of scrutiny in a few circumstances; these issues seem to be under control. Last year 24% of transfers arrived electronically. Take-up of the electronic option appears to be following the same pattern as electronic registration.
In 2009, genetic evaluations incorporated the results of genomic testing into estimated breeding values. The GEBV (Genomic Estimated Breeding Value) has increased the reliability of breeding estimations rather dramatically. This new technology will have a major influence on how young sires are selected and will be a determinant in mating cows. This exciting new tool will be further developed with more learned through practise and experiment. Better direction in applying the technology will come to light.
Holstein Canada introduced a genomic testing service during the year. Uptake of the service has been keen and steady. Testing capabilities using larger SNP panels will become available and produce more exacting information. On the other hand, a smaller, more-economical panel is being developed to screen for animals
Secretary-Manager’s ReportKeith Flaman
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possessing high-genetic potential.Communication is the soul of
an Association. Keeping members and customers informed about pertinent information is a never-ending responsibility. New programs, program changes, ideas, suggestions, new technologies, future changes, and industry news are topics to be circulated. Farm visits often provide the basis of a story that needs to be shared with other dairy producers.
All aspects of communication—the message, the messenger, and the vehicle—need constant review. Customers have preferences for methods of communication, as well as different needs and timelines. The challenge is
to meet the requirements of as many customers as possible, within the constraints of resources and practicality.
Holstein Canada continues to play a role of advocacy in areas of animal health and food security. Holstein Canada has been a strong supporter of an initiative in Ontario to control the spread of Johne’s. The program, extended over a few years, will encourage testing and monitoring of the disease in herds, provide information on the disease, and promote practices that mitigate the chance of new infections.
Holstein Canada is also working closely with Dairy Farmers of Canada to ensure that the national livestock traceability program meets the needs
of dairy producers across Canada. Producing quality milk from healthy cows is an expectation from the consumer. The industry must be able to assure its customer that it is doing its very best to make that happen.
The dairy industry continues to evolve. New technologies and management practices, coupled with leading edge knowledge of genetics and breeding, have created the most efficient dairy farms in history. There is no standing still! Challenge your Association to push the limits of its imagination to ensure that the programs and services you need are at your fingertips. This is why you belong and why you pay to belong to Holstein Canada.
SUMMERY OF REGISTRATIONS BY SOURCE
Hard Copy Internet ERA
48% 40% 32% 27% 23%
2005
300,000
250,000
200,000
150,000
100,000
50,000
02006 2007 2008 2009
36% 41% 45% 49% 50%
16%19%
23%24%
27%
CLASSIFICATION ACTIVITY2005 2006 2007 2008 2009
Regular 12,993 13,658 12,445 13,160 12,318
Mid-Rounds 3,510 3,281 4,211 3,924 4,804
Specials 9 6 9 1 10
Holstein Animals
200,298 215,247 226,115 220,606 225,839
Other Breed Animals
3,783(4 months) 14,695 14,053 14,724 14,583
CLASSIFICATION ACTIVITY BY prOVINCeRound 76 – Mar’08 - Dec’08 Round 77 – Dec’08 - Aug’09
Regular Herds
Mid-Round Herds
Holstein Animals
Other Breed Animals
Regular Herds
Mid-Round Herds
Holstein Animals
Other Breed Animals
British Columbia 319 104 8,074 369 310 111 9,683 327
Alberta 333 135 9,940 298 324 144 10,337 308
Saskatchewan 98 50 2,959 40 97 55 3,357 46
Manitoba 182 68 4,556 217 183 75 4,767 308
Ontario 2,617 1,016 45,962 3,287 2,619 1,100 50,138 3,434
Québec 4,379 1,227 59,153 4,473 4,362 1,286 61,226 4,903
New Brunswick 130 43 2,166 205 139 48 2,495 220
Prince Edward Island 120 61 2,405 101 118 67 2,416 106
Nova Scotia 142 68 2,931 110 140 79 3,226 142
Newfoundland 5 1 142 3 4 0 67 0
All 8,325 2,773 138,288 9,103 8,296 2,965 147,712 9,794
Holstein Canada achieved new records in animal registrations and classifications. It registered 275,557 animals and classified 240,422. This represents a 2% growth over 2008 and significant gains in market share.
SUMMArY OF reGISTrATIONS BY SOUrCe
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Submitted by: Nova Scotia / Newfoundland Holstein Branch
“Whereas the Royal Agricultural Winter Fair is the most prestigious Holstein Show in Canada; and
Whereas there are thousands of international buyers and visitors in attendance to view our outstanding cattle and potential genetics; and
Whereas exhibitors and breeders should have input as to the structure and selection of classes;
Therefore be it resolved that the Board of Directors of Holstein Canada reconsider the decision to eliminate the Dry Senior Yearling Class at the Royal Agricultural Winter Fair in 2010 and further consult with exhibitors and members with regard to future changes to class structure and schedule of events.”
Submitted by: Ontario Holstein Branch
“Whereas the non-milking Senior Yearling Class at the Royal Winter Fair is a popular and widely respected class with thousands of Royal spectators eager to watch every year; and
Whereas breeders and exhibitors continue to consistently exhibit in this class in significant numbers with large groups of well made, functionally correct animals; and
Whereas many National Holstein show Junior Champions have been drawn from this class over recent years; and
Whereas age at first breeding and calving is left to the discretion and individual management preference of breeders across Canada; and
Whereas the requirements of large heifers to be clean and dairy in the same manner that all other heifer classes are, is a Holstein Canada judging guidelines issue; and
Whereas Holstein Canada Directors are encouraged to focus on developing more markets for Holstein enthusiasts, not less;
Therefore be it resolved that the Holstein Canada Board of Directors repeal their
decision to eliminate the non-milking Senior Yearling Class at the Royal Winter Fair Holstein show until such a time when the breeders and exhibitors deem the class redundant.”
Submitted by: Québec Holstein Branch
“Whereas members which exhibit were not consulted before Holstein Canada took this decision; and
Whereas decisions pertaining to shows should be approved by the Show Committee; and
Whereas due to the fact that heifers were exhibited all summer, this would deprive the breeder to exhibit them come fall; and
Whereas there has always been interest and good business opportunities relating to these heifers; and
Whereas the difficult economic situation faced by breeders and the loss of a category takes away business opportunities for some; and
Whereas during the exhibitors’ meeting held at the 2008 Royal, the vote in favor of keeping the class was a majority of 56 to 1; and
Whereas it was one of the most beautiful classes presented at the Royal;
Therefore be it resolved to ask Holstein Canada to reconsider its decision and maintain the Non-Milking Senior Yearling Class.”
Following extensive discussion, the Board of Directors unanimously agreed to postpone the elimination of the Non-Milking Senior Yearling Class at the Royal Agricultural Winter Fair.
2. Procedure Review of the Cancellation of the Non-Milking Senior Yearling Class at the Royal Agricultural Winter Fair Holstein Show
Submitted by: Ontario Holstein Branch
“Whereas the decision to cancel the non-milking Senior Yearling Class at the Royal Winter Fair has been viewed to have been removed in an inappropriate manner; and
Whereas the decision was made without a thorough investigation of the views of those involved; and
Whereas the exhibitors and breeders are the foundation for the shows, it is important that their feedback be considered;
Therefore be it resolved that we request the Holstein Canada Board of Directors review the process and protocols for the making of major decisions; and
Be it also resolved that the Board seek more information and direction from the membership prior to implementing these decisions.”
This resolution was taken under advisement by the Board of Directors.
3. Mating Program
Submitted by: Ontario Holstein Branch
“Whereas the Classification Program and Classifiers are respected worldwide as an unbiased means of dairy cattle evaluation; and
Whereas Holstein Canada is proposing a mating program for breeders; and
Whereas this is a duplication of services already available to a member; and
Whereas this advice could lead to potential bias and confrontation in subsequent classifications;
Therefore be it resolved that Holstein Canada not pursue a mating program.”
This resolution was taken under advisement by the Board of Directors.
Action Taken from 2009 Resolutions
1. Non-Milking Senior Yearling Class at the Royal Agricultural Winter Fair
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4. RFID Button/XL Panel Tag Option
Submitted by: New Brunswick Holstein Branch
“Whereas the RFID button set only comes with a large panel, which is visually hard to read in modern milking systems and not adequate for all producers;
Therefore be it resolved that Holstein Canada offers for sale an RFID Button / XL Panel option.”
The RFID button with an XL panel tag option was made available in September 2009. This new option was reported to the membership in the August/September 2009 issue of Info Holstein.
5. Replacement Tags
Submitted by: New Brunswick Holstein Branch
“Whereas it is essential for several reasons to have cattle tagged at all times;
Therefore be it resolved that Holstein Canada speeds up replacement tag orders.”
This resolution request had been fulfilled and was reported to the membership in the August/September 2009 issue of Info Holstein.
STATeMeNT OF OperATIONS - Comparative by provinceTOTAL
MEMBERSHIPSPUREBRED
REGISTRATIONSPERCENTAGE
REGISTRATIONSRECORDED
REGISTRATIONSTOTAL
TRANSFERS
2009 2008 2009 2008 2009 2008 2009 2008 2009 2008
Ontario 4,127 4,165 72,764 73,163 10,851 9,849 14,061 13,396 12,795 15,062
Québec 5,266 5,313 82,505 79,363 11,851 12,023 8,784 8,976 14,955 14,880
New Brunswick 202 200 3,792 3,856 493 485 629 705 284 347
Nova Scotia 222 226 4,012 4,041 525 665 437 363 486 512
Newfoundland 19 18 100 77 64 59 52 231 167 143
Prince Edward Island 196 201 3,787 3,512 336 328 158 164 802 819
Manitoba 294 311 6,939 6,461 1,456 1,495 2,029 2,057 936 1,244
Saskatchewan 168 169 4,703 5,145 977 1,173 1,268 948 678 1,017
Alberta 516 514 16,464 15,798 4,309 4,297 3,859 3,510 2,388 3,319
British Columbia 418 434 12,628 11,860 2,642 2,788 3,081 2,856 1,480 1,540
International 4 3 1 1 0 0 0 0 849 1,544
11,432 11,554 207,695 203,277 33,504 33,162 34,358 33,206 35,820 40,427
2009 Master BreedersMichel Roberge Androberge Chesterville, Qc
Bellton Farms Ltd. Bellton Brookfield, NS
Cavanhill Farms Ltd. Cavanhill Kinburn, ON
Clovis Holstein inc Clovis Saint-Alexandre, Qc
David G. Fawcett Coachside Winchester, ON
Comestar Holstein Comestar Victoriaville, Qc
Earlen Farms Limited Earlen Alma, ON
Allison & Jean Fawcett Fawcettdale Winchester, ON
Frueh Farms Ltd. Frueh Duncan, BC
Grasshill Farm Ltd. Grasshill Bobcaygeon, ON
Nieuwenhof & Associe inc Lareleve Dundee, Qc
Lemlar Farms Ltd. Lemlar Woodstock, ON
Meadow Bridge Holsteins Meadow Bridge Thamesford, ON
Poplar Dell Poplardell Stella-Amherst Island, ON
Quality Holsteins Quality Woodbridge, ON
Martin & Renaud Boutin inc Sartigan Saint-Georges Ouest, Qc
Stelbro Holsteins Stelbro Thamesford, ON
Spring Hedge Farm Terramaple Terra Cotta, ON
Tomalynn Farms Tomalynn Omemee, ON
Tween Bays Farm Inc. Tween Bays Vernon, PE
Ferme du Vieux Saule Vieuxsaule Saint-Esprit, Qc
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La Presentation Daurel (EX)La Presentation Daurel (EX) has achieved 46 Stars—the highest
in the breed. Moreover, she continues to add stars.A sixth-generation Very Good or Excellent by Combination
Supersire (EX-EXTRA’94), Daurel was bred and owned by Ferme Richard Blanchette et fils inc, La Présentation, Qc.
Despointes James Sydney EX-94-CAN 5*Lifetime: 4 lacts. 69,237 kg milk 2,332 kg fat 3.4% 2,233 kg protein 3.2%Production CAN-EBV Aug. ‘09 Rel. 79% LPI +288/50%Conformation CAN-EBV Aug. ‘09 Rel. 69% Conf. +82003 AC 3-Yr.-Old; 2005 Res. AC 5-Yr.-OldBreeder and owner: Gaeten Brunelle, Sainte-Sophie, Qc
Canada’s Highest Star Brood Cow
Cow of Year (presented in 2009)
Century of Holsteinscertificate of membership
Hoskin Farms Ltd.1898—2005
for at least 100 years ofcontinuous Holstein Canada membership
Cornwell FamilyNorwich, ON
1910-2009
Roger Dyment Family Dundas, ON1910-2009
The Leslie Family Caledon, ON1909-2008
2009 Century of Holsteins Award
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Schedule Of Revenue And Expenses
REVENUE EXPENSES EXCESS / (DEFICIT)
DEPARTMENT 2009 2008 2009 2008 2009 2008
Registry $3, 870,630 $3, 892,625 $1, 313,990 $1, 331,496
Total Revenue lessTotal Expenses
= Excess (Deficit)
Breed Improvement 5, 407,436 4, 867,835 3, 710,208 3, 271,953
Marketing 239,648 246,699 881,056 851,298
NLID 1, 282,995 1, 259,688 1, 227,255 1, 205,389
Board & Executive 0 0 1, 217,641 1, 148,121
Administration 53,259 114,408 1, 149,704 925,150
Information Technology 0 0 1, 109,659 1, 074,499
Depreciation 0 0 439,429 508,664
$10, 853,968 $10, 381,255 $11, 048,942 $10, 316,570 ($194,974) $64,685
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Financial Report 2009 Rhonda Morley, Chief Financial Officer
H olstein Canada reported $194,974 excess of expenses over revenues in the general Operating Fund for the 2009 fiscal year.
Total revenues of $10.8 million reflect a 4.5% increase from last year primarily due to a 2% growth in activity for both registration and breed improvement services. Pricing incentives for registration services are designed to encourage both the timely registration of animals and the submission of applications electronically. As a result, the revenue generated by registrations is steadily decreasing as the number of electronically-submitted applications grow. The trend continued through 2009 and as the number of applications submitted electronically grew to 77%, Registry revenue declined. An 11% increase in Breed Improvement revenue is mainly attributed to greater classification activity and a steady uptake of genomic testing services. Memberships declined by 1% in 2009, which resulted in less Marketing revenue, however, National Livestock IDentification (NLID) revenue increased 1.8% due to brisk tag sales. Bank rates remained low throughout the year; consequently, interest earned on cash investments, such as bank and term deposits, decreased.
Total operating expenses of $11 million increased 7% compared to last year. As expected, laboratory costs went up in relation to the increase in number of genomic tests. Additionally, the cost of tags went up in relation to the number of tag sets sold. The Association incurred additional
expenses related to staff changes, building maintenance, governance, and administration.
Holstein Canada’s Reserve Fund consists of a $6.3 million investment portfolio. In an effort to minimize the degree of risk, investments are diversified among three broad categories: cash, which includes bank certificates; equities, which includes shares and managed funds, and; fixed Income, which includes bonds and preferred shares. The investments earned an average of 5.8% dividend and interest during 2009, and the portfolio reflected an increase in market value of 3.3% for the year.
The Association used $729,456 from the Development Fund to support initiatives such as the 2012 World Holstein Conference, a Computer Technology Infrastructure upgrade, and various herd recruitment and retention programs.
Holstein Canada was selected to host the 2012 World Holstein Conference. A separate Conference Fund was established and will be used to record financial transactions related to the event.
The outlook for 2010 remains optimistic with an expectation of modest growth in activity and a small surplus budgeted for the Operating Fund. Steady performance is expected from the Reserve Fund investments as the markets continue to recover from the 2008 economic downturn. Prudent management of our resources will be essential to ensure the future financial health of the Association.
2009 Sources of Revenue
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Statement of Financial Position As at December 31, 2009
Operating Fund Reserve FundDevelopment
FundConference
FundTotal 2009 Total 2008
CURRENT ASSETS
Cash and Bank (Note 3) $480,719 $162,655 $29,088 $18,787 $691,249 $1, 072,583
Temporary Investments (Note 4) 1, 250,047 178,602 1, 428,649 1, 562,794
Accounts Receivable (Note 5) 1, 235,946 1, 235,946 1, 169,512
Other Receivables 131,868 3,323 135,191 171,993
Inventory 13,998 13,998 13,230
Prepaids 122,480 122,480 215,517
Due (to) from other funds 7,217 (7,217) 0 0
3, 242,275 344,580 21,871 18,787 3, 627,513 4, 205,629
INVESTMENTS
Reserve Fund (Note 6) 5, 994,855 5, 994,855 5, 548,889
CAPITAL ASSETS (Note 7) 3, 353,816 3, 353,816 3, 344,541
$6, 596,091 $6, 339,435 $21,871 $18,787 $12, 976,184 $13, 099,059
CURRENT LIABILITIES
Accounts Payable & Accrued Liabilities $933,237 $933,237 $854,824
FUND BALANCES
Invested in Capital Assets 3, 353,816 3, 353,816 3, 344,541
Unrestricted 2, 309,038 6, 339,435 21,871 18,787 8, 689,131 8, 899,694
5, 662,854 6, 339,435 21,871 18,787 12, 042,947 12, 244,235
$6, 596,091 $6, 339,435 $21,871 $18,787 $12, 976,184 $13, 099,059
Statement of Operations and Changes in Fund Balances Year ended December 31, 2009
Operating Fund Reserve FundDevelopment
FundConference
FundTotal 2009 Total 2008
REVENUES
Income from Operations $10, 829,865 $10, 829,865 $10, 314,062
Investment Income (Note 9) 24,103 $357,187 $1,327 $ - 382,617 364,989
10, 853,968 357,187 1,327 - 11, 212,482 10, 679,051
EXPENSES 11, 048,942 704,456 6,213 11, 759,611 10, 695,359
Excess of Revenues Over Expenses (194,974) 357,187 (703,129) (6,213) (547,129) (16,308)
Transfer from Reserve to Development (519,873) 519,873 0 0
Transfer from Development to Conference (25,000) 25,000 0 0
Fair market value adjustment (Note 9) 203,230 203,230 (369,745)
Extraordinary Item -
Funds received on dissolution (Note 10) 142,611 142,611 0
Fund Balances, Beginning 5, 857,828 6, 156,280 230,127 - 12, 244,235 12, 630,288
Fund Balances, Ending $5, 662,854 $6, 339,435 $21,871 $18,787 $12, 042,947 $12, 244,235
15
Statement of Cash Flows Year Ended December 31, 20092009 2008
OperatingFund
ReserveFund
DevelopmentFund
ConferenceFund
TotalOperating
FundReserve
FundDevelopment
FundTotal
CASH FROM OPERATING ACTIVITIES
Excess (deficiency) of revenue over expenses
($194,974) $357,187 ($703,129) ($6,213) ($547,129) $64,685 $288,879 ($369,872) ($16,308)
Items not affecting cash
Amortization of capital assets
439,429 439,429 508,664 508,664
(Gain) / Loss on disposal of capital assets
5,526 5,526 16,866 16,866
(Gain) / Loss on sale of investments
(14,911) (3,762) (1,327) (20,000) (28,484) 5,537 (3,578) (26,525)
Amortization of premiums/discounts on held to maturity investments
(8,547) (60,748) (69,295) (19,447) ,115 (3,513) (22,845)
226,523 292,677 (704,456) (6,213) (191,469) 542,284 294,531 (376,963) 459,852
(Changes) in non-cash working capital
169,393 (3,323) (25,022) 141,048 (81,897) 15,649 (66,248)
Net cash provided by (used in) operating activities
395,916 289,354 (729,478) (6,213) (50,421) 460,387 294,531 (361,314) 393,604
INVESTING ACTIVITIES
Additions to capital assets (492,630) (492,630) (482,601) (482,601)
Proceeds on disposal of capital assets
38,400 38,400 46,173 46,173
Proceeds on sale of investments
1, 400,017 689,699 432,500 2, 522,216 2, 638,709 1, 419,139 212,000 4, 269,848
Investment purchases (1, 457,543) (867,925) (216,042) (2, 541,510) (2, 277,899) (1,411,322) (211,615) (3, 900,836)
Funds received on dissolution
142,611 142,611
Interfund transfers (519,873) 494,873 25,000 0 (285,791) (100,000) 385,791 0
Net cash used in investing activities
(511,756) (555,488) 711,331 25,000 (330,913) (361,409) (92,183) 386,176 (67,416)
INCREASE/(DECREASE) IN CASH AND BANK
(115,840) (266,134) (18,147) 18,787 (381,334) 98,978 202,348 24,862 326,188
CASH AND BANK, BEGINNING OF YEAR
596,559 428,789 47,235 1, 072,583 497,581 226,441 22,373 746,395
CASH AND BANK, END OF YEAR
$480,719 $162,655 $29,088 $18,787 $691,249 $596,559 $428,789 $47,235 $1, 072,583
16
1. PURPOSE OF THE ORGANIZATIONThe Holstein Association of Canada is a national organization
authorized to register Holstein cattle in Canada. The basic purpose of the Association is to improve the breed of Holstein cattle. To this end, it maintains a Herd Book and provides many services to its members to assist them in evaluating, selecting and improving their herds. The Association is a non-profit organization and accordingly is not taxable by virtue of Section 149 (1)(e) of the Income Tax Act.
2. SIGNIFICANT ACCOUNTING POLICIESThe financial statements of the Holstein Association of Canada
have been prepared in accordance with generally accepted accounting principles, and reflect the following policies:
Fund AccountingRevenues and expenses related to service delivery and
administrative activities are reported in the Operating Fund.The Reserve Fund reports assets, liabilities and revenues and
expenses needed to provide for future contingencies.The Development Fund reports assets, liabilities and revenues and
expenses needed for special projects and business development.The Conference Fund reports assets, liabilities and revenues and
expenses needed for the 2012 World Holstein Conference.
Revenue RecognitionThe Association recognizes revenue as services are rendered.
Contributions ReceivableContributions receivable are recognized as an asset when the
amounts to be received can be reasonably estimated and ultimate collection is reasonably assured.
InventoryThe inventory is recorded at the lower of cost and replacement cost.
Financial InstrumentsThe Association utilizes various financial instruments which
include cash, accounts receivable, temporary and long-term investments, and accounts payable. Unless otherwise noted, it is management’s opinion that the Association is not exposed to significant interest, currency or credit risks arising from these financial instruments and the carrying amounts approximate fair values.
All transactions related to financial instruments are recorded on a settlement date basis.
The Association classifies its financial instruments into one of the following categories based on the purpose for which the asset was acquired. The Association’s accounting policy for each category is as follows:
Held-to-maturity investmentsThese assets are non-derivative financial assets with fixed or
determinable payments and fixed maturities that the Association’s management has the positive intention and ability to hold to maturity and comprises certain investments in debt securities, GIC’s
and T-Bills. These assets are initially recognized at fair value and subsequently carried at amortized cost, using the effective interest rate method, less any provision for impairment. Transaction costs related to held-to-maturity investments are included in the amount initially recognized.
Available-for-sale investmentsNon-derivative financial assets not included in the above
category are classified as available-for-sale and comprise certain investments in equity instruments, including the Association’s investments in private companies. All such instruments have a quoted market price in an active market and are carried at fair value with changes in fair value recognized as a separate component of the fund balance. Where a decline in the fair value is determined to be other than temporary, the amount of the loss is removed from the fund balance and recognized in the statement of operations and changes in fund balances. Transaction costs related to available-for-sale investments are included in the amount initially recognized.
Loans and receivablesThese assets and liabilities are accounts receivable and accounts
payable and accrued liabilities and are measured at their fair market values which are equal to the carrying amounts due to their short term nature.
Measurement UncertaintyThe preparation of financial statements in accordance with
Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from management’s best estimates as additional information becomes available in the future.
Capital Assets The Association’s capital assets are recorded at cost.
Amortization is provided as follows:
CompositeRates
Method
Building 30 yr. Straight –line
Sculptures
Office furniture and equipment 20% Straight-line
Automobiles 30% Declining-balance
Data processing 3 – 5 yr. Straight-line
Also included in capital assets is a Fafard Sculpture. This asset is not depreciated as it is considered to be a work of art.
3. CASH AND BANKThe Association’s bank accounts are held at one chartered bank.
The bank accounts earn interest at average rate of 0.10%
Notes To The Financial Statements Year ended December 31, 2009
17
4. TEMPORARY INVESTMENTSHeld to maturity investments: 2009 2008
GIC’s, due between May 6, 2010 and December 3, 2013, with interest rates between 1.0% and 4.45%
$1, 127,461 $1, 132,534
Government of Canada treasury bills, due February 19, 2009
0 430,260
Ontario savings bonds, due June 21, 2014, variable interest
301,188 0
$1, 428,649 $1, 562,794
5. ACCOUNTS RECEIVABLEA significant portion of the Association’s trade accounts
receivable are to individuals/organizations in the agricultural industry and, as such, the Association is exposed to all the risks of that industry.
6. LONG-TERM INVESTMENTS – RESERVE FUND
Bonds and DebenturesThe Government of Canada bonds have a carrying value of $409,910
(2008 - $713,590), a fair value of $403,813 (2008 - $705,868) and interest rates of 4.50%-9.50% (2008 – 4.25%-9.50%). These investments will mature as follows: $200,164 within 1 year and $203,649 after 5 years.
The Canadian provincial and public authorities bonds have a carrying value of $2,042,631 (2008 - $1,736,081), a fair value of $2,033,095 (2008 - $1,730,198) and interest rates of 4.40%-6.00% (2008 – 4.40%-6.00%). These investments will mature as follows: $400,143 within 2 to 5 years and $1,632,952 after 5 years.
The Canadian corporate bonds have a carrying value of $2,244,448 (2008 - $2,137,436), a fair value of $2,224,419 (2008 - $2,120,139) and interest rates of 4.10%-8.30% (2008 - 4.25% - 8.30%). These investments will mature as follows: $1,006,138 within 2 to 5 years and $1,218,281 after 5 years.
Preferred SharesThe preferred shares have a carrying value of $363,980 (2008 -
$366,014) and a fair value of $339,465 (2008 - $264,945). The preferred dividend yields range from 4.75%-6.00% (2008 – 4.75%-6.00%).
EquitiesThe equities consist of common shares with a carrying value of
$486,565 (2008 - $416,100) and a fair value of $481,057 (2008 - $308,430). The shares have no fixed maturity dates and are generally not exposed to interest rate risk. Dividends are generally declared on an annual basis.
Managed EquitiesThese equity pools have a carrying value of $551,405 (2008 -
$551,369) and a quoted market value of $513,006 (2008 - $419,309).
Held to maturity investments: 2009 2008
Bonds and debentures
Government of Canada $403,813 $705,868
Canadian provincial and public authorities
2, 033,095 1, 730,198
Canadian corporate 2, 224,419 2, 120,139
4, 661,327 4, 556,205
Available for sale investments:
Preferred Shares 339,465 264,945
Equities 481,057 308,430
Managed Equities 513,006 419,309
$5, 994,855 $5, 548,889
18
8. PENSION PLANThe Association maintains a defined contribution pension plan
for all employees whereby it will match employee contributions up to a maximum of 5% of salary. The pension expense for the year was $219,743 (2008- $218,039).
9. INVESTMENT INCOMEThe operating fund investment income is comprised of
interest income from a bank account in the amount of $590 and interest income in the amount of $23,513 on held to maturity investments.
The reserve fund investment income is comprised of interest income in the amount of $292,677 and net gains/losses in the amount of $64,510 on investments classified as held to maturity or available for sale.
The development fund investment income is comprised of interest income in the amount of $1,327 on held to maturity investments.
For available for sale investments held in the reserve fund, the total amount of the gain recognized to adjust these investments to fair market value at year end is $203,230 and has been included in the reserve fund statement of operations and changes in fund balances.
10. FUNDS RECEIVED ON DISSOLUTIONOn December 22, 2009, Bova-Can Parentage Testing Inc., a non-
for–profit organization of which the Holstein Association of Canada is a member, ceased operations and disbursed funds to its members. The dissolution is scheduled to take place in 2010.
11. FINANCIAL INSTRUMENT RISK EXPOSURE AND MANAGEMENT
Management has established policies and procedures to manage risks related to financial instruments, with the objective of
minimizing any adverse effects on financial performance. A brief description of management’s assessments of these risks is as follows:
(a) General Objective, Policies and Processes:The Board and management are responsible for the
determination of the Association’s risk management objectives and policies and designing operating processes that ensure the effective implementation of the objectives and policies. In general, the Association measures and monitors risk through the preparation and review of monthly reports by management.
(b) Credit Risk:Financial instruments potentially exposed to credit risk include
cash and cash equivalents and accounts receivable. Management considers its exposure to credit risk over cash and cash equivalents to be remote as the Association holds cash deposits at one major Canadian bank. Accounts receivable are not concentrated significantly and therefore the carrying amount of accounts receivable represents the maximum credit risk exposure.
(c) Interest Rate Risk:The Association is exposed to interest rate risk arising from
fluctuations in interest rates depending on prevailing rates at renewal of investments. To manage interest rate exposure, the Association invests in fixed income vehicles backed by a chartered bank.
(d) Liquidity Risk:Liquidity risk is the risk the Association will not be able to meet
its financial obligations as they come due. The Association has taken steps to ensure that it will have sufficient working capital available to meet its obligations.
12. CAPITAL MANAGEMENTThe Association considers its capital to be comprised of its net
assets and deferred contributions. The Association is in compliance with all its externally imposed capital requirements.
The Association manages capital to safeguard the organization’s ability to operate and to meet its financial obligations as they become due.
7. CAPITAL ASSETS2009 2008
ASSET CostAccumulatedAmortization
Net Book Value CostAccumulatedAmortization
Net Book Value
Land $328,851 $328,851 $328,851 $328,851
Building 3, 008,125 $802,284 2, 205,841 3, 008,125 $701,985 2, 306,140
Fafard Sculpture 177,525 177,525
Office furniture and equipment 1, 268,879 1, 248,621 20,258 1, 264,805 1, 234,806 29,999
Automobiles 837,437 358,660 478,777 840,171 364,892 475,279
Data processing 4, 119,219 3, 976,655 142,564 4, 081,200 3, 876,928 204,272
TOTALS: $9, 740,036 $6, 386,220 $3, 353,816 $9, 523,152 $6, 178,611 $3, 344,541
