Skills, Attitude, and ChangeMarj Faust, PhD

Background

We've seen more change in dairy genetics during the past 5-10 years than in the previous 25+ years

As we’ve seen in the computer industry, the speed of change in the dairy industry continues to accelerate!

System that evolved delivered significant genetic progress

From where we’ve come

Significant progress for milk and later for other traits

190

225

260

295

330

365

400

435

-100

-80

-60

-40

-20

20

40

1973 1978 1983 1988 1993 1998 2003 2008 2013P

rote

in Y

ield

, kg

Bre

ed

ing

Val

ue

Pro

tein

, kg

Birth Year

Sires BV

Cows BV

Protein Yield

0

3.8

7.6

11.4

15.2

19

22.8

26.6

30.4

34.2

38

41.8

-14.44

-12.03

-9.63

-7.22

-4.81

-2.41

0.00

2.41

4.81

1961 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011

Pro

du

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fe, m

o

Bre

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Val

ue

PL,

mo

Year of Birth

Sires BV

Cows BV

Productive Life

0

0.36

0.72

1.08

1.44

1.8

2.16

2.52

2.88

3.24

3.6

3.96

-0.33

-0.26

-0.20

-0.13

-0.07

0.00

0.07

0.13

0.20

0.26

1986 1990 1994 1998 2002 2006 2010 2014

Som

atic

Cel

l Sco

re

Bre

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ing

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ue

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S

Year of Birth

Sires BV

Cows BV

SCS

15

18

20

23

25

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30

33

35

38

40

43

-6

-3

3

6

8

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1962 1969 1976 1983 1990 1997 2004 2011

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ancy

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R, %

Year of Birth

Sires BV

Cows BV

Daughter Pregnancy Rate

-853

-711

-569

-427

-284

-142

142

284

1978 1983 1988 1993 1998 2003 2008 2013

PTA

Net

Mer

it, $

Birth Year of Cow

Cows PTA

Sires PTA

Enter genomics 2009

As a tool for established AIcompanies, more evolutionary than revolutionary

However, marketplace has responded in a revolutionary way

Genomic evaluations released publicly in 2009Rapid adoption into breeding programs

175,000

350,000

525,000

700,000

875,000

1,050,000

1,225,000

1,400,000

Jul-10 May-11 Mar-12 Jan-13 Nov-13 Sep-14 Jul-15 May-16 Mar-17

Cu

mu

lati

ve N

um

ber

Gen

oty

ped

Date of Evaluation, month-year

Young Males

Total Males

Young Females

Total Females

Genomics ramp up in the U.S.

> 200,000 males

>1.4m both sexes

Confidence in genomics has driven change in the industry

From: USDA, 2015

Age of parents when progeny are born

0

1

2

3

4

5

6

7

8

1990 20152010200520001995

Birth Year of Progeny

Gen

erat

ion

Inte

rval

, yea

rs

Sires of sons

Sires of cows

Dams of sons

Dams of cows

Young bulls as sires of sons

0

25

50

75

100

2008 2009 2010 2011 2012

Sire

d b

y Yo

un

g B

ulls

, %

Birth Year of Sons

Fro

m:

Hu

tch

inso

n a

nd

co

-wo

rker

s, 2

01

4

NM$ Progeny (2016)

Bull 2016 2013* PA 2013 Daughter AI sons

Supersire 936 694 395 3,820 244

Cabriolet 852 666 331 1,028 6

AltaStacked 617 611 439 1,308 1

Uno 526 600 348 4,468 213

Puzzle 538 584 370 1,240 0

Erdman 679 574 362 3,351 11

Maurice 642 571 501 1,760 26

Indy 606 568 385 1,375 0

Galaxy 497 564 501 3,146 23

Headliner 701 562 395 1,485 26

Top young bulls from April 2013Now with > 1,000 daughters

*base adj.

From: USDA, 2016

Genetic merit of marketed Holstein bulls

-450.

-225.

0.

225.

450.

675.

2000 2002 2004 2006 2008 2010 2012 2014

Ave

rage

net

mer

it (

$)

Year entered AI

From: USDA, 2015

By today …

Genomics - widely adopted globally

Many countries release genomic evaluations weekly for timely decision making

females - management decisions and selection

males - selection decisions

Young genomic sires used readily in breeding programs by AI companies and commercial dairies

Faster rates of genetic progress are being reported

Questions AI companies are asking

How do we (not competitors) get the next great #1 genomic bull?

How will we (not competitors) provide next-gen traits?

What genetics can we offer that others cannot offer as their own ‘me too’?

What other products and services can we offer that others cannot copy?

AI company to genetic company

Nucleus

most companies own/control their own females

strategically manage how (as sexed semen?) and when semen on high genomic young bulls is released

Data

significantly large in-house databases

alliances/access to large comprehensive sets of data

targeted investments in company proprietary traits, such as health traits, feed efficiency

Analytics & Expertise

Tools and technologies also coming online

Advanced reproductive technologies such as IVF

IVF in pre-pubertal heifers

Embryo genotyping

Sexed semen

Sexed semen + IVF

Seeing the DNA directly expands the technology possibilities

Sequencing individual animal genomes to betterunderstand how individual genes work

When genes are better understood, gene editingbecomes more promising

Repair undesirable mutations as needed or desired

“repair” alleles carrying undesirable recessives

develop lines that produce higher value milk

create new polled lines

Lines with improved disease resistance/resilience

New industry dynamics

Significant changes in industry dynamics

Consolidation in some sectors

New players in other sectors

New sectors

Overall, many new faces sitting around industry tables

It seems that everybody is ‘into’ data

Your on-farm system

DataGene

Genotyping companies

Data backup providers

Nutritional consultants

Bankers

Pharmaceutical companies

Herd veterinarians

Software providers

Milking equipment companies

AI companies

Quantum increase in data being collected via sensors and robots/automation

Where are your data today?

Your on-farm system

DataGene

Genotyping company

Data backup provider?

Your nutritional consultant?

Your banker?

Pharmaceutical company?

Your herd veterinarian?

Software provider?

Milking equipment company?

AI company?

Are all of your data being fully leveraged for your benefit?

Change

Expect to be presented with many new options and opportunities

Some will be worthwhile for your enterprise

Successful change requires skills and attitude!

Data

Decision $

Information NoiseKnowledge

Reach your goals

– Carl Sagan

“We live in a society exquisitely dependent on science and technology in which hardly anyone knows anything about science

and technology”

Ensure that Knowledge is at your table

Thank you! Questions?