Bull Breeding Worth shifts reflect increase in value of fat
In what is the most significant change to global dairy trade in the last 20 years, milk fat will earn dairy farmers more
than protein in the 2018/19 season.
“Fat has been a low value milk component but has seen a steady rise in recent seasons due to consumer-driven market
value,” DairyNZ Strategy and Investment Leader Dr Bruce Thorrold says. “That’s a welcome change for New Zealand dairy
farmers who are set to receive a strong 2018/19 milk price, buoyed by the value of milk fat.”
Milk price and the relative value of fat and protein are the biggest factors in the Breeding Worth (BW) of dairy cattle.
“The changes in fat price have produced large shifts in BW both between and within breeds. Of the top 200 bulls by BW in
2019 (BW2019), 70% are Jersey, 5% Holstein-Friesian and 25% Cross-Bred (Jersey and Holstein Friesian),” Dr Thorrold
says.
“On average, Jersey bulls are increasing by $23 BW while Holstein-Friesian decrease by $28 BW. Cross-bred and Ayrshire
bulls are relatively unchanged (-$4 and -$3 BW). Within breeds, individual bulls will shift up or down by as much as $40
BW relative to their breed average shift.”
New Zealand Animal Evaluation (NZAEL), a wholly-owned subsidiary of DairyNZ, administers a BW index, which is used to
rank cows and bulls according to their ability to meet the national breeding objective of breeding dairy cows that will
be the most efficient converters of feed into profit for farmers.
NZAEL has recently finalised the economic factors that will be used to calculate BW from February 2019.
“Due to the sizeable shift in fat and protein value, BW2019 is being published early for all sires enrolled with NZAEL.
This will give farmers insights into which bulls can add the most value to their breeding programme in a market where
fat is a high value component. The calves that are born in spring 2019 will have the BW2019 values,” Dr Thorrold says.
The economic values for fat and protein are calculated by partitioning the milksolids price into a value for fat and
protein, and then accounting for the cost of producing each component. The value of fat relative to protein has been
increasing for the past three seasons and this trend is forecast to continue.
New Zealand is uniquely positioned to take full advantage of strong demand for fat-based milk products due to the strong
influence of Jersey genes in the national herd. There is high genetic variation in the trait in New Zealand dairy cattle
which enables farmers to respond quickly to market signals.
Further changes on the way
Dr Thorrold says the shift in consumer demand for fat and the consequent change in BW are big changes for dairy farmers.
“The milk price values we use in BW lag behind the market price because we look to smooth out short term changes – for
breeding the national herd we need a long-term view. If current fat prices are maintained, then the shift in favour of
high fat bulls will continue next year.
“Breeding high BW cows is vital for farm profit, so given these shifts in BW all farmers need to be thinking about their
breed choice as well as individual bulls. Farmers can be confident that BW is identifying the most profitable genetics
for New Zealand grazing systems, whether they are looking for the best bull team or best bull within a breed.”
What this means for farmers
Dairy farmers will need to think about their breeding choices to ensure they have a herd capable of producing milk with
higher fat content to get the best returns. Many farmers use semen from bull teams selected by breeding companies to
help them breed the next generation of milking cows. The breeding companies are aware of these changes and are using
them to help select the bulls they use in their teams.
DairyNZ is encouraging farmers to talk with their breeding company to see if the product they have ordered is still
meeting their needs.
Michelle Burgess, a member of the NZAEL farmer advisory panel, and for whom genetics have been a lifetime passion, has
welcomed the news, saying she and her husband Bill are stoked that the value of fat has saved New Zealand’s milk price.
“Not so long ago we had a few hard years with very low payouts, and what’s also improved is the positivity around
fat-based products as consumers become better educated on healthy eating.
“As we see the current value of fat and protein flow through into BW, it reiterates our goal to breed cows that produce
high amounts of both fat and protein. Bill and I like to select bulls that we believe will be profitable in any given
year, and I am certain that such bulls exist in all the breeds and crosses. The 2019 BW will help us identify which
bulls and cows will increase our milk payouts now and in the future.”
Farmers can log onto the DairyNZ website and check out both the current, and 2019 BW figures on the DairyNZ bull team
builder (dairynz.co.nz/bullteam). Farmers can use this tool to identify the bulls in their team that will have a big shift in their BW figure in
February 2019.
Glossary
New Zealand Animal Evaluation (NZAEL): a wholly-owned subsidiary of DairyNZ, which administers the Breeding Worth (BW) index, which is used to rank cows and
bulls according to their ability to meet the national breeding objective, which is breeding dairy cows that will be the
most efficient converters of feed into profit for farmers.
Breeding Worth (BW): the index used to rank cows and bulls according to their ability to meet the national breeding objective of breeding
dairy cows that will be the most efficient converters of feed into profit for farmers. BW includes eight different
traits, each weighted according to economic value to farmers. These weightings are updated every year, to ensure New
Zealand’s breeding programme remains relevant as market demands change.
For further information, visit dairynz.co.nz/ev