Fall 2012
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C: 80 M: 0 Y: 10 K: 68
Beyond C: 80 M: 0 Y: 10 K: 35
C: 100 M: 11 Y: 0 K: 74
77
Genetics for Life.
12
Semex is well-known for the Power of Balanced Breeding, Semex Works Everywhere and Every Dose Counts. Each of these has helped to bring us to where we are today.
ai24™
Beyond10 TM
eliminate fertility worries
Repromax™
egins with a pregnancy.
riority on any dairy anywhere in the gins and ends with getting live calves ound. We understand that without good you don’t have life.
for Life is all about reproductive . We’re committed to the on-going & development that developed the nly international fertility evaluation, x. Semex’s Repromax sires improve your productive performance, longevity and lity, one straw at a time.
4 19 16
Heifer Drift
Renegade
China
Milk Prices
These solutions are required in today’s global marketplace where borders have truly melted away. Our product is sourced, produced and marketed everywhere cows are found, without limits. As our Chief Executive Officer Paul Larmer states, “The need for genetic solutions knows no borders.”
14
With that thought, we are proud to present to you our newly designed Beyond Borders magazine.
Higher conception % rate
2.6
This magazine tells Semex’s story. It features all that is Semex and shows you the value of the Semex people, product and services. We hope you enjoy it and that like us, you believe in Genetics for Life.
Based on Sire Conception Rates from USDA April 2012.
at Semex, we understand that it all ith a pregnancy. Genetics for Life.
www.semex.com
Genetics for Life is a reflection of this evolution and it has been driven by what we’ve seen and heard from you. You’ve told us that you’re looking for genetic solutions that are designed to develop herds for life.
6
Brawler
BEYOND BORDERS IS A MAGAZINE DESIGNED TO PROMOTE DAIRY GENETICS, TECHNOLOGY AND MANAGEMENT PUBLISHED BY SEMEX. Comments or submissions to the editor should be forwarded to Brenda Lee-Turner, Semex, 130 Stone Road West, Guelph, Ontario, Canada N1G 3Z2. tel: 519-821-5060, fax: 519-821-7225; email: bturner@semex.com Sexxed™, Genomax™, Genomax Plus™, Repromax™, ProMate™, ReproMix™, Premier™, HealthSmart™, ai24™, ShowTime™, .25Plus™, CVG™, Robot Ready™ and Calving Ease™ are registered trademarks of Semex.
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GENETICS FOR LIFE INTO TOMORROW TOGETHER
It’s About You. Life is an evolution, building on the past and adapting for the future. At Semex, our vision is directed by what we see in our clients’ eyes. Genetics For Life is this evolution. It encompasses genetic solutions, how we will expand globally, our commitment to research & development, our training programs, and most importantly developing long-lasting, profitable herds and lifelong partnerships. Genetics For Life is all about enhancing lives and how we will feed the lives of tomorrow together. What we hear, see and learn from you drives us. It’s about you and we’re evolving into tomorrow together. PAUL LARMER, CEO, SEMEX
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Greg Dietrich, Semex Sales Manager, Asia, Middle East, Central & Eastern Europe
Genetics for Life at Semex is about genetic solutions, our commitment to research & development and most importantly developing long-lasting, profitable herds and lifelong partnerships worldwide. As the world grows smaller, we’re left wondering how we will supply our growing population with water, commodities and even our milk.
SEMEX BEYOND BORDERS: CHINA
The greatest of these populations is the People’s Republic of China with 1.3 billion people. More than just a large population, China’s living standards are increasing and its middle class is growing. And, it has rapidly expanded its milk consumption and production in the past few years. This makes China a giant in the dairy industry. As seen in Figures 1 & 2,
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China’s consumption is still out-pacing its production even though China is the world’s third largest milk producing country in the world. Per capita dairy consumption in China is still relatively low compared to other Asian and European countries (see Figure 3). As this increases over the next 10-20 years, the current thinking is that the Chinese dairy market will continue to grow 10-15% annually. In the 1990s, Semex led the highly successful 10-year Canada-China Integrated Dairy Cattle Breeding Project (IDCBP). This project was established to help strengthen China’s genetic and managerial base, increasing the quantity, quality and efficiency of milk production in China.
80 70 60 50 40 30 20
10 1996
1998
2000
2002
Production (mill t ECM)
2004
2005
2006
2007
2008
2009
Ranking
Consumption (mill t ECM)
1 USA
2 India
3 China
4 Russia
5 Brazil
6 7 8 9 Germany France New Zealand UK
Production (mill)
Figure 1: Chinese Milk Production & Consumption (1996-2009)
Figure 2: World Top 10 Cow’s Milk Producing Countries in 2010 (MT)
Data Source: IFCN
Data Source: FAO
“It’s logical for Semex to be here, just like we are in other major dairy markets worldwide.” 400 350
China India Turkey Russia Poland
300 250 200 150
Kazakhstan Canada Germany
100 50 0
1996
1998 2000 2002 2004 2005 2006 2007 2008 2009
Figure 3: Consumption Comparison by Country (kg milk/capital) Data Source: IFCN
Today China is very focused on improving its dairy production. Now, with almost 10 million cows, the need for efficiency is increasing. Chinese farms are generally small, with most being under 20 cows, but the number of larger farms with over 100 cows is growing quickly. In fact, there are about 900 larger dairies with 100 or more cows, the bulk of which are in the Chinese ‘dairy belt’ that produces 75% of the country’s milk. This creates a major potential market for Semex. In 2012 Semex China was established with headquarters in Shanghai. A second site, including bull barns and semen processing, has been built in the southern province of Yunnan, and is home to Holstein and beef bulls imported from Australia. This location keeps the cost of semen down for local
Chinese dairymen and allows for year round collection. Semex China is very passionate about the future of dairying in China. “The semen market in China is gigantic,” says Junmin Zhang, Manager of Semex China. “It’s logical for Semex to be here, just like we are in other major dairy markets worldwide. In five years time we want to become the biggest breeding organization in China!” Already Semex China is surpassing expectations. It ranks as a top sales country for Semex, and promises to deliver on its promise of Genetics for Life to the rapidly expanding Chinese dairy industry.
All photos supplied by Han Hopman.
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10 Turkey
Brenda Lee-Turner, Semex Marketing Communications Specialist
GENOMAX™ GRADUATE:
0200HO05929 GEN-I-BEQ BRAWLER Semex customers and partners know that working with Semex as their genetic partner yields many benefits. These benefits include access to our Genomax™ lineup, offering producers the brightest and best genomic young sires in the industry.
GEN-I-BEQ BRAWLER BLANCHE VG-86-2YR-CAN In August, Semex released one of the most highly anticipated graduates its Genomax program has ever seen, the #2 LPI sire and Top 100 Holstein USA International TPI sire, 0200HO05929 Gen-I-Beq Brawler.
THE PEDIGREE
IN THE FIELD
Sire: Baxter
“People love these cows,” says CIAQ Progeny Analyst Carl Saucier. “They’re easy to milk and people love working with them.”
Dam: Gen-I-Beq Shottle Barbi VG-85 4* 1 Superior Lactation Award
Extremely popular as a Genomax sire, Brawler 2nd Dam: Gen-I-Beq Champion graduated with over 200 daughters in his Bambi EX-90 4* initial proof as a HealthSmart™ sire. 3rd Dam: Braedale Baler Twine VG-86 32* Semex’s HealthSmart sires breed cows that Dam of Semex’s world famous Braedale Goldwyn are healthier, more fertile and cost the 1 Superior Lactation Award dairy less money. These daughters have few 2007 Holstein Canada Cow of the Year average days open, fewer difficult births and fewer stillbirths.
DELABERGE BRAWLER LISIE VG-86-2YR-CAN
4th Dam: Braedale Gypsy Grand VG-88 37* 2 Superior Lactation Awards 2003 Holstein Canada Cow of the Year
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“His feet & legs are great, and he’s best for foot structure, a deep sole and strong pasterns. Graduating with a 78% Good Plus and better tells us they’re cows built to last. All of his best daughters have one thing in common... Their dams are all sired by strength bulls. ” Semex Sire Analyst Mike West believes Brawler offers dairymen what they’re looking for to build a great, profitable herd.
TM
0200HO05929
GEN-I-BEQ BRAWLER
NEW AUGUST RELEASE
BAXTER x SHOTTLE
DAIGALE BRAWLER MATRIX VG-85-2YR-CAN
AMIGO BRAWLER FAZYANE VG-85-2YR-CAN
DELORME BRAWLER JOALYA PHOTOS: VICKI FLETCHER
“He’s got low SCS, high Productive Life, Calving Ability, Milking Temperament, big fat and protein deviations, good production and a no holes type proof,” says West. “And, of course, he’s backed by the Gypsy Grand family and their incredible reliability. With these credentials, it’s no wonder guys like their Brawlers and are going back and using him again.” Already used as an international sire of sons, Brawler is a special sire that certainly has the makings to be a great and influential sire. He excels in components, type and has appealing health traits that leave productive, long-lasting daughters.
Brawler defines Genetics for Life,
HOW TO USE BRAWLER
Brawler is Genetics for Life.
Brawler is best used to produce hard-working cows with desirable type. He will improve Feet & Legs and as a HealthSmart sire, delivers the functional traits such as Productive Life, low Somatic Cell, Milking Temperament and Daughter Calving Ability.
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siring long-lasting, profitable cows and represents the lifelong partnerships that Semex is built on.
Jay Shannon, Semex Global Dairy Solutions Manager
TM
LEADING GENETICS
Semex’s job is to provide our customers with the best, the most diverse and the most reliable source of genetics in order for them to be successful and profitable. This is at the heart of our Genetics for Life philosophy. Vital to our customers’ success, Genomax™ sires are the youngest and brightest genomic sires available anywhere today.
Genomics has provided our industry with the ability to more confidently select the population’s best animals at a younger age. Still a developing technology, many articles were written earlier this year talking about the limitation of genomic predictions. These articles noted that initial genomic predictions are often overestimated, with the majority of bulls tending to go down once they become progeny proven. At Semex, we’ve worked hard to both analyze and bring attention to this overestimation. However, this does not change our confidence in genomics, or our belief that genomics provides our customers with a great opportunity and advantage. Our research confirms that even after accounting for overestimation, the genetics from the high genomic bulls still easily surpass today’s best progeny proven bulls.
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est genomic bulls gnated Genomax™
Top 20 Proven Bulls
300 sires enter stud
Remember, breeding is a balance of risk and reward. At Semex, we recommend our customers use 30-50% Genomax bulls for optimum genetic advancement. To help mediate the risk of using lower reliability sires, Semex endorses three common sense breeding principles:
Young bulls genomic tested Select highest genomic females
X IS THE SOURCE HIGH MIC SIRES
• Select Genomax sires in groups of three or more
GUIDIN Select
CIP
Genomax™ sire usage
IN
30-50%
LES
Semex recommends
R P G
Use no more than
half Genomax™ sires
who are sons from non-proven sires
Use
Genomax sires ™
in groups of three or more
Genomax™ bulls with a different mix of sires in their pedigrees
The USA, Canada, the UK and Italy share genomic information, allowing us to compare genomic values on all our bulls. This information tell us that Genomax bulls aren’t just the best genomic young sires at Semex, d #2 PLI genomic bulls op 5 PLI genomic bullsthey’re among the very best in the world! This is a great op 25 PLI genomic bulls way to benchmark sire line-ups, and Semex sires clearly ein UK Animal Data Centre, August 2012. leads the way.
• Use Genomax bulls with a mix of sires in their pedigrees • Use no more than 50% of Genomax sires that are sons of unproven bulls In order to find the world’s leading genetics, Semex uses an extremely stringent selection process. We begin by selecting high genomic females and then testing over 4000 young bulls per year. Only 300 of these 4000 tested are good enough to enter the Semex stud. This selection intensity provides Semex with a crop of young genomic bulls that are second to none. Only one in seven of those entering stud qualifying to be a Genomax sire, ensuring that Genomax bulls are indeed the world’s leading genetics.
In Canada, Semex dominates having the top four GLPI
bulls available, well as 11 of the top 15. In the United nd longevity to build a profitable herd for our as clients. tools are managed by Semex’s Global Dairy Solutions Manager, Jay Shannon. Contact Jay at: jshannon@semex.com States, Semex has both the #1 GTPI and #2 GNM$ bull, and two of the top 10 in both listings. In the UK, (which offers a third party comparison for North American genomics), Semex shines with the top two PLI genomic bulls, four of the top five, and 13 of the top 25. This makes it very clear that Semex is the world’s best option for dairymen looking to harness the world’s most powerful genetics.
© 2012
If you’re looking for the very best genomic sires with semen fertility and calving ease data, Semex’s Genomax Plus™ lineup is for you. These bulls have all the merits of a Genomax bull, with high fertility semen qualifying them as a Repromax™ sire and calving data that also qualifies them as a Calving Ease™ sire. Use Genomax Plus bulls with confidence! –9–
Mark Carson, MSc., BSc. Agr., EastGen, Reproductive Strategy Manager
ARE HEIFER INVENTORIES EATING AWAY AT YOUR PROFITS? Successful business managers know that carrying costs can negatively effect profitability. For dairy producers, inventory management comes in many different forms. You manage your feed, fuel and fertilizer inventories, knowing they’re critical to cash flow. However, many dairymen might not realize that their heifer inventories may literally be eating away at their profits. Let’s take the example of a 100-cow milking herd and have a closer look. Using conventional AI semen, this herd will average four heifer calves born per month. If this herd’s average age at first calving is 27 months, we can estimate that they’re keeping an extra 12 heifers in inventory three months longer than they have to each year. Financially, calving heifers out at 27 months of age as opposed to the widely recommended 24 months costs this herd an estimated $15,000/year. This estimate is based on extra heifer rearing costs and reduced culling opportunity. As feed availabilities tighten and hit pocket books following this summer’s drought, managing your heifer inventory and related reproduction program is critical. Key to this is timely heifer breeding. The first place to look at is the age your heifers are when first bred. In order to get heifers calving in at 24 months of age you
must begin breeding at 13 months. This decision alone directly influences when your heifers will start to make you money. The sooner they’re bred, the sooner they’ll be pregnant, calving and paying you back! Recently, the University of Guelph, OMAFRA, CanWest DHI, and EastGen (Semex’s partner) initiated the Calf-ETERIA project. The goal of this project was to get a sense of the decisions and tools dairymen are using when raising their heifers. In the winter of 2011, a survey was distributed asking participants questions about all aspects of their heifer-raising program, from newborn to first lactation. A total of 901 Ontario dairy producers responded. The survey asked producers what age they planned to start breeding their heifers. The majority stated 14 or 15 months, answering 30% and 32% respectively. Only 20% of respondents indicated that their goal was to start breeding their heifers at 13 months of age or younger. Using a small sub-group of 68 survey participant herds, early analysis compared when the producers said they planned to start breeding to when their their CanWest DHI data that had actually breeding dates. This information showed that 49% of these 68 participants bred their heifers at least one month later than their stated goal. When you break this information down even further, 22% of these herds bred their heifers two or more months later than they had planned. This shows that many producers are not reaching their goal of getting semen into heifers when they plan to and they’re letting their heifers ‘drift’ a month or more past their target start date. The financial effect of this ‘drift’ adds up quickly as these heifers will be literally eating away at profits, calving well beyond the desired 24 months of age at first calving.
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Another tool we could use to improve our heifer reproduction management is utilize pregnancy rates. The pregnancy rate essentially measures the speed at which heifers eligible to become pregnant actually became pregnant over a given period of time. Producers and consultants have used this figure effectively when assessing reproductive performance and in making the necessary changes to improve the lactating herd’s profitability. Conception rates are higher in heifers, easily reach 60%, making a 35-40% heifer pregnancy rate achievable. Using this statistic in heifer programs will help herds assess if their heifers are being bred in a timely manner, and also if they’re getting pregnant from those breedings.
Considerations to avoid the ‘drift’: • Make sure heifers regularly move into your breeding pen. Scheduled pen moves ensure the right heifers get the right amount of attention. • If you’re using visual heat detection, remember that you need to dedicate 30 minutes twice a day (morning and night). Visual heat detection should not be done during other activities such as feeding. • Systems such as ai24™’s Heatime® need to be used correctly. Make sure you’re putting collars on heifers approximately 10 days before the breeding period starts to ensure maximum benefit. • Quickly identify heifers you have not seen in heat. Work with your veterinarian to establish a protocol for heifers not seen in heat after the first 21 days of the breeding period. • Regularly scheduled pregnancy checks are a must. This quickly identifies open heifers and allows you to deal with them appropriately.
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tion
C: 0 M: 69 Y: 100 K: 4
C: 0 M: 79 Y: 100 K: 11
C: 0 M: 46 Y: 73 K: 0
PMS: 173
Golden Oak Farm’s Ethan Heinzmann, Herdsman, and Nate Janssen, Dairy Operations Manager
LET US PUT TIME ON YOUR SIDE As a herd manager you know how valuable your time is. You need time to feed cows, time to treat cows, time to milk cows and time to breed cows. Most importantly, though, you need that precious time away from the cows to do the things that mean most in your life. Semex’s ai24™ whole herd management solution with both rumination monitoring and heat detection capabilities can’t put more hours in your day, but it can put more time on your side!
ROI less than 18 months
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Launched in the US in 2011, our one-of-a-kind HR-Tag® offers dairymen a complete herd management program including both high activity and rumination monitoring.
Records True Save time sick c tifyrumination heat o en detection information rate Id
Advantages of ai24’s HR-Tag:
Attach collar
- Built-in microphone records and analyzes rumination
- Unique c ow motion sensor (three% dimensional acceleration meter)
- Identification, activity monitoring and rumination in one tag
Records rumination - Identify problem cows before milk information 1 production drops
“We would certainly invest in the system again,” says Ethan Heinzmann, Golden Oaks Farm Herdsman.
- 99% tag read rate
- 85-90% true heat detection
1
Collect data
- Early identification of potentially sick cows, distressed cows or nutritional problems
“The rumination monitoring we hope will help us elimate DA surgeries and take quicker and more accurate action on metabolic disorders. The activity monitoring allows us to breed cows in good standing heat and dramatically decrease the amount of hormones we use.”
1Info stored for 2 3 at least one year
• Unprecedented insight into individual cow health status
With over a year of use under their belts, the folks at the 700 cow Golden Oaks Farm of Wauconda, Illinois believe in its effectiveness.
“The rumination monitoring is a cuttingedge tool. The activity monitoring combined with rumination monitoring gives us a very skilled set of eyes watching the herd at all times.”
at least
24 hours
Records True rumination heat 85 - Filters information detection head movements rate tags • Multifunctional
Rumination information is your first insight into a cow’s well-being. Any changes in her rumination are the earliest signs that she may have a potential health problem. And, we know that the earlier you can find out about any potential health problems, the sooner and cheaper it will be to deal with it.
Info s
before clinical signs of illness
• One-of-a-kind technology
ws
85
%
- Reduce drug use
• Unparalleled accuracy
Info stored for
2 3
3
Reduction in rumina be an early disease
at least one year Assess data
• Easy to use
- Easy and secure attachment with safety buckle
- Simple to install
- Detailed graphic information with only a few key strokes
1
• Scalable
2 3
- Use as a stand alone or with PC
3 Take action
• High return on investment and saves time and money - ROI in less than 18 months • Ideal for operations interested in the most accurate and simple whole health and reproductive management
2
3
4
To find out more about ai24 and the powerful HR-Tag, join Golden Oaks at their 2012 World Dairy Expo Virtual Farm Tour on Wednesday, October 3 at 12:00 pm!
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4
Russell Gammon, Semex Jersey Program Manager
JERSEYS ARE GENETICS FOR LIFE Semex’s Jersey program is Genetics for Life. The Jersey cow exemplifies this philosophy, working hard and being profitable on dairies everywhere. Working side-by-side with Jersey producers worldwide, we’re ensuring that the Semex Jersey cow is the cow that helps build the future’s longlasting and profitable herds. The launch of 0200JE00060 BW Renegade underscores this commitment. He debuts as a highly ranked progeny proven sire in August 2012, and is the newest edition to our Repromax™ and HealthSmart™ lineups.
This means that you can trust Renegade to be a highly fertile bull that sires daughters bred to be healthier, more fertile and cost dairies less money.
The Pedigree: Sire: Sunset Canyon Maximum Dam: BW Centurion Iris Ex 95% 6-09 305 34,440 4.8 1655 3.5 1212 Renegade’s impressive pedigree explains part of the reason for his early popularity and success as a Genomax™ bull. Two breed icons anchor his pedigree: His dam, BW Centurion Iris Ex 95%, has impressive production; and his paternal grandam, Tenn Haug E Maid Ex 93%, is a fountainhead of extreme butterfat yield and percent genetics. Also, his maternal grandam is an Excellent daughter of Duncan Chief himself, a son of the legendary global superstar Duncan Belle. With long-lived, hard-working, moneymakers as his foundation, the stage was set for Renegade to become an international super star as soon as he arrived as a highly sought after Genomax sire.
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In the field As his first crop daughters freshened, those who saw them were impressed by how consistent his daughters have been, with shapely, youthful udders and great feet & legs. This impression has been verified by his first type proof that displays a steep foot angle, ideal leg set, firm fore udders, high and wide rear udders, shallow udder depth and desirably placed teats. On the production front, his milk proof of over 900 pounds of milk is enhanced by 86 pounds of fat and 47 pounds of protein, with appealing plus component percent deviations of +.23% fat and +.08% protein. This astonishing combination of production excellence ranks Renegade #1 for Cheese Merit $, Fluid Merit $, Net Merit $ and Productive Life! Renegade also epitomizes Genetics for Life, ranking as the breed’s #1 sire for Productive Life at 6.8, a strong plus for daughter pregnancy rate and is one of the breed’s best for fertility. Taken in total, these ‘Best in Breed’ evaluations push Renegade to the #2 GJPI sire at +251 in August.
NEW AUGUST RELEASE
BW RENEGADE KATIE ET749 YOSEMITE JERSEY & RICHARD CLAUSS, HILMAR, CA, USA
TM
TM
0200JE00060
BW RENEGADE MAXIMUM X CENTURION
SUNSET CANYON RENEGADE C MAID VG-87%-2YR-USA, SUNSET CANYON & RIVER VALLEY, BEAVER, OR, USA (REVERSED) PHOTOS: FRANK ROBINSON
HOW TO USE RENEGADE: This sire of healthy cows can be used on a wide range of mainstream Jersey bloodlines, being free of Q Impuls’ influence and carrying only a touch of Duncan Belle genetics. His sire stack of Maximum x Sooner Centurion x Duncan Chief provides an even stronger legacy of strength, longevity and profitable productivity. He can be used to make taller, dairy cows with superior feet & legs, appealing and highly functional udders with high solids and longevity plus!
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A tale of two milk prices...
– 16 –
Mike North, Sr. Risk Mgm’t. Advisor, First Capitol Ag
In 1859 Charles Dickens penned the novel, A Tale of Two Cities, that after selling more than 200 million copies has become held as one of the greatest literary works of all time. I remember reading this in an English literature class (and as a young man it wasn’t so appealing!), and tried to draw parallels from it to different societies throughout history. You might recognize this famous quote from its text “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us.” As I look at our current dairy complexities, this story rings in my ears.
The US drought has captivated market participants for months, causing milk futures prices to rise dramatically to levels above $20/cwt for Q4 2012 and averaging $19.25/cwt for the first half of 2013. This movement has been reinforced by the fact that cow numbers have continued to retract since May, losing 44,000 cows since the April peak. While this trend may have begun amid a lack of profitability at the farm, it is common to see this trend continue in drought years as feed becomes scarce and profitability wanes. With spot feed prices at record highs (corn at $288/ ton and soymeal at $534/ton), many are projecting a trend continuation built on this fact alone.
However, as milk futures prices have climbed, many producers are penciling profitable margin opportunities despite the higher feed price picture. Will this be enough to bring cows back to the farm? We shall soon find out, and with replacement heifers readily available, this type of response can happen quickly.
Continued on page 18...
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Continued from page 17...
Here is where Dickens jumps in. While drought, and its impact on feed and milk prices, has captured the spotlight, a story of less media interest is operating in the background. This story is more in line with 2013 Class III price offerings (currently averaging $18.76/cwt) and a far cry from the hopes of many for $20 plus announcement prices. This story revolves around product prices and their contribution to federal order milk pricing. At current levels, product prices suggest Class III milk price values closer to the mid to upper $18/cwt zone. While guesswork, modeling and hope drive futures prices, spot product pricing absolutely determines milk’s present value. With 2012 futures prices trading at levels much higher than the $18-$19 levels suggested by the federal order formula, either milk prices must move lower or product prices must rise beyond current values. Lately, the former, not the latter of these scenarios has identified itself as the winner. As we sort this out month by month, the market will remain in a state of flux, while this tale of two stories plays out. The one constant will be the volatility that has allowed prices to swing 40-50 cents on a daily basis. Again, the fate of price will rest in the hands of the domestic consumer and export buyer. Given consumer sentiment, restaurant performance indicators and the overall state of economic affairs both here and around the world, it is hard to put together a case for magnificent milk price opportunities. While these two stories play out, we have some work to do. First, it is important to make a distinction between futures prices and final pay prices. A futures market is today’s best guess at tomorrow’s outcome, influenced also by a speculative presence in the marketplace. In the case of milk, the final pay price is a function of product prices as they trade around the country (or CME cash auctions in the case of California). In the case of feed, the price you pay may have a root in the futures market, but it is adjusted locally to better reflect local supply and demand, as well as freight.
A futures market is today’s best guess at tomorrow’s outcome It allows us to calculate margins and secure opportunities that may not even exist once the future is fully realized. It is the benchmark on which your forward contracting (both milk and feed) is based on. At any given point, futures prices can be grossly different than what is finally realized. This, for many, is their greatest mistake. They glance briefly at futures prices and believe that that must be the final outcome and then they go on about their business only later to find they were sadly mistaken. We must be regularly monitoring these opportunities, capitalizing on them and framing a 2013 that we can look back on with satisfaction. Many believe that they can sit by idly and do nothing, and there are times when this is certainly called for. However, in a year such as this, I would submit to you that such action is a gamble of the highest order. Do not let the luster of futures price offerings distract you from the opportunity at hand. 2008 held such a moment, and the reward for inactivity was the misery of 2009. As Dickens wrote “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness.” Do not leave 2013 to chance. Be intentional about your margins, and begin working the numbers hard as this tale of two prices works its way out.
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TM
HIGH FERTILIT Y SIRES
LIFE BEGINS WITH A PREGNANCY. The top priority on any dairy anywhere in the world begins and ends with getting live calves on the ground. Genetics for Life is all about reproductive solutions. We’re committed to the on-going research & development that developed the world’s only international fertility evaluation, Repromax. Semex’s Repromax sires improve your herd’s reproductive performance, longevity and profitability, one straw at a time. Because at Semex, we understand that it all begins with a pregnancy.
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Repromax™ sires have
higher conception rates % compared to other bulls.
2.6
Based on Sire Conception Rates from USDA, April 2012.
C: 0 M: 69 Y: 100 K: 4
C: 0 M: 79 Y: 100 K: 11
C: 0 M: 46 Y: 73 K: 0
PMS: 173
Join Golden Oaks Farms at their 2012 World Dairy Expo Virtual Farm Tour on Wednesday, October 3 at 12:00 pm to find out more about ai24™!
LET US PUT TIME ON YOUR SIDE As a herd manager you know how valuable your time is. You need time to feed cows, time to milk cows and time to breed cows. Most importantly, though, you need that precious time away from the cows to do the things that mean most in your life. Semex’s ai24™ whole herd management solution with both rumination monitoring and heat detection capabilities can’t put more hours in your day, but it can put more time on your side.
It’s time for ai24™.
(877) 545-ai24 (2424) | www.semex.com – 20 –