LIC stands firm on contract for AI straws

New Zealand-based breeding company LIC is committed to introducing new legal contracts this spring. Dairy farmers won’t be allowed to buy LIC straws unless they sign. Jack Kennedy reports.

Jack Kennedy

18 January 2017

LIC stands firm on contract for AI straws

The LIC side of the debateThe Irish industry side

The LIC side of the debate

Top LIC AI bulls available in Ireland before New Zealand – Mark Ryder: “New Zealand quarantine regulations have changed. Now instead of holding bulls for 104 days before exporting, it’s a 30-day quarantine period. This means the very best sires from New Zealand can be used in Ireland before New Zealand. Our shareholders allow this but they need some IP protection. We are here to breed profitable cows for Irish farmers and not top bulls for other AI companies.”

Short gestation genetics – LIC suggests it has developed new genetics with shorter gestation which could be valuable to farmers but if other AI companies take on one of these sires then immediately the potential return on the LIC investment is much reduced.

LIC investment in bull testing and promotion – LIC claims it has spent millions developing the best genetics for shareholders. Genomically testing 5,000 bull calves and young bull testing 250 bulls costs a lot of money. Shipping semen around New Zealand to overcome EU regulations also costs big money. If Irish companies sell against them with New Zealand-bred stock in the New Zealand market or any other market, it reduces the potential return for farmers.

The Irish industry side

“We own the cow and pay for the straw” – Dairy farmers claim they own the cow (50% of the genetics) and good money is paid over for AI straws so why or how can a breeding company control actions on any resulting offspring?

“Irish companies follow LIC” – Irish AI representatives claim other Irish AI companies could follow LIC down the contract route and hence no young bulls go into an Irish testing programme operated by ICBF where genetics are shared across the country.

“New indexes” – Potentially Irish and international AI companies develop their own indexes in competition to the EBI index, confusing the end user on what are the best sires available. LIC claims it doesn’t want to go there now. Potential alternative indexes developed by commercial companies used for sales purposes confuse the selection agenda for farmers.

“No national testing programme” – Potentially, the young bull testing programme goes back into private commercial individual companies doing their own thing. This allows them place emphasis on what they think is important rather than independent science and research leading the best cow for Ireland agenda.

It is clear LIC doesn’t hide the fact that it is trying to protect its IP and maintain a return on large financial investments made in New Zealand. It says it wants to allow Irish farmers to breed good cows and not top bulls for other AI companies.

While individual Irish farmers are especially interested in what happens inside their own farm gate, it is imperative that the decisions they make are based on independent research and independent analysis of bull proofs.

We are lucky in Ireland to have a database owned by farmers operated independently by ICBF, which is owned by Irish AI companies and AI service companies. If all AI companies follow LIC down the contract route then the sharing of genetics and the investment in national testing programmes could be jeopardised. We don’t want to take a step back in time.

I am a believer in using the best genetics from whatever part of the world they come from when measured on the right index to improve the national cow herd. It would be a travesty if LIC and Irish representives can’t come to some agreement that works for all parties.

I’d have no problem maybe giving first refusal to the company where the straw originated but to restrict the farmer’s potential upside before the calf is born is a horse of a different colour.

Farmers resist signing contracts and LIC has to realign or change company strategy to avoid losing all sales in Ireland.

Irish industry representatives negotiate an Irish waiver with LIC, allowing some Irish bulls to go into bull testing in Ireland, but farmers would still have to sign LIC contract.

LIC leaves the best bulls with part lactation proofs in New Zealand until farmers there have a chance to use them first, hence giving New Zealand shareholders first advantage.