Breeding a Merino that is fit for 2040

Introductions and where the genetics have gone

Chad Taylor: I probably haven't introduced our team, but Josh is our operations manager at home, and I can assure you he is brilliant at what he does. It also seems he's very good at MCing, so thanks for your help today, Josh. It's great to have Heather, our stockperson, down from home too, and most of our family. It takes a whole team to put these sorts of days together, but I think they are very important days for sharing this sort of information.

The work that Tomo is leading in the west, and that Fergus is certainly promoting around most of the country, is game-changing and has been for decades, I suspect, or certainly well over 10 years. It's had a really significant impact on the sort of sheep we're breeding and the direction we want to keep going. So it's great to have people like that able to communicate to an audience like we've attracted today, and it's great to have you all here too, so thank you very much for making the effort.

A big thank you to Hugh and Martha Satchel. We've got to have a place to host a day like this, so it's great to be on farm with a client. It was amazing driving up the drive this morning past all those cattle; we'll talk about that later.

Anyway, we'll get into this. Our operation at home is pure Merinos, mostly stud stock. That's where my head continually goes. If I'm behind a mob of sheep doing something that doesn't require a lot of brain power, my mind seems to go to a joining plan or something to do with breeding. So stud stock is what drives our business, and we complement that with commercial sheep, and we want to keep it that way. It's a pretty simple mix, and they complement each other very well. If we can get hold of a bit more country and time, we'll look to fill that with more commercial sheep, and then in time look to keep growing the stud. That's certainly the future I'd like to be part of, and breeding a fit animal for the future is something we're very much focused on. We'll get into that in a minute.

This is just a bit of an overview of where the genetics have spread around the country so far. These are all the dots from the last five years where rams or semen have been sold, mostly rams. One of the things I like about this map is that it's a bit of an illustration for people who may be interested in getting on board with what we're doing. I think it's far more effective if I can put you in touch with someone in your district and you hear from them how the genetics are working on their country, as opposed to hearing it from a stud breeder. I think that's probably a more effective way of going about it. So if you do have any interest, let me know, and I'll more than likely be able to put you in touch with someone far closer to your place than us.

Driving change is something that's been pretty close to my heart for quite a while. This is a photo of my daughter Harriet, who's here somewhere. It was years ago now. I remember growing up, and sheep were very much part of what we did as children too. I'd be swinging on the side of the race listening to Dad and the classer talking about the good big sheep and the bright white wool, and that was about all there was in those days. There's a lot more data involved now, but Merinos have been well and truly imprinted in my upbringing, and it's something I'd like to continue with.

It was interesting having this chat with Harriet a little while ago. When she was young, about this sort of age, I'd have her on the side of the race sitting on a drum. But she wasn't just listening to the good big sheep and bright white wool sort of chat. She had a laptop on her knees, and it was her job to call out the breeding values as I read the sheep into the screen. As we got into the system of classing these sheep with the breeding values Harriet was calling out, I could nearly work out whether I'd read a good sheep or a rubbish sheep into the system just by the excitement in her voice and the way her little feet were tapping on the side of the drum.

Harriet remembers the story as well. There was one time where I'd read this animal into the computer, the numbers came up on the screen, and Harriet's little feet started banging away on the side of the drum. Her voice was so excited she could barely contain herself, but she finally managed to say, "Dad, this one's 2.5 for muscle!" It happened to be an animal that was pretty exciting for a range of other traits too. That was the sort of upbringing Harriet had, and I think it's probably going to stick with her for life, which I think will be a good thing for the industry, with the amount of drive that Harriet has.

Breeding a sheep fit for 2040

But it does beg the question, and I think this sets up where I'd like to go with this presentation: what are we doing that's going to keep us fit for the future? What does 2040 look like? I can assure you that 40 years ago, the way we were breeding sheep and the way I used to look at sheep in our business was a hell of a lot different, and I suspect it's going to be incredibly different again in 40 years' time. So if I could just lift your thinking beyond what the season's doing, where the markets are at and what else you could be doing at home, and have you focus a little on what 2040 might look like. I think it's really important to the decisions we're making now at a genetic level to keep us relevant, and certainly profitable, as we move into the future.

To set the scene a little more, this unmarked chemical drum analogy is something I think really differentiates old-school sheep breeding from the future. If I put a chemical drum in front of you and asked you to go and use it, it would be impossible to know what to do with it. We don't know whether it's a herbicide or an insecticide, or it could be a drench. Even if we could work out which one it was, we'd still need to know what rate to use it at to get the best results. If we get that wrong, the results are potentially lethal for a crop or for an animal. So we need to be really clear on what we're doing. And yet so many sheep breeding decisions are made with just phenotype, just the visual.

What we want to do with our sheep is provide a really detailed label, and that's effectively what these graphs are doing. I'll go into these graphs in more detail in a minute, but I think in order to remain relevant for the future it's highly important to have huge amounts of information available, and then find simple ways to digest that information to make the best decisions moving forward.

Fleece weight, body weight and adult size

There's a concept I want to get through to people, which you may well be aware of, but just to get everyone up to the same speed: the fleece weight to body weight ratio. It's obviously made up of two components, the body weight of the sheep and how much wool they're expected to cut.

To put this information in front of you, we went through the stud ewes at home. This graph shows the age breakup of our current stud ewes, from the 22 drop on the left right through to the old girls, the 18 drop, on the right. Interestingly, there are only a dozen or so 18 drop ewes that have earned their right to stay in the stud; most of the sheep are in the younger age groups. In terms of their body weight at condition score three, the 22 drop girls, which were about 18 months old when we did this, are 52 kilos, and they're capping out by the time they're four or five years of age at 65 kilos. So our standard reference weight on a mature-age ewe is capping out around 65 kilos.

There was a good question in here somewhere before on adult weight, and I'll talk more about the connection between early growth, muscle and adult weight, because it's a really good picture to paint. But that's our standard reference weight, capping out at 65, so the average between the two-year-olds and the five-year-olds is somewhere between 52 and 65.

The other part is the fleece weight ratio, and to me the sweet spot is somewhere around 10%. So for us, with a 65 kilo adult, we're looking to cut 6.5 kilos. One of the things this information does is enable us to see through the pub talk, where we hear plenty of wool-focused breeders talk about their sheep cutting seven or eight kilos, or some people saying 10 kilos going into the press. That's great, but it triggers a couple of questions in my mind. The first is how big are your ewes? If you've got 10 kilos of fleece weight going into the press, have you got a 120 kilo ewe? Because that's not what we want to do. The other question is how many lambs are you having, because fleece weight is antagonistic with reproduction. To me, the story fits best when we have a combination of profit drivers across both fleece value and carcase.

Looking at the growth here, weaning weight, post-weaning weight and adult weight, we want the early growth, which is shown in the first two graphs on the left. But the thing I like best about this scenario is that if you look closely at the graph on the right, the adult weight, you can start to see it's tipping over, which fits with the plan to cap our adult weight.

There are a couple of ways we go about that. One is to select directly for early growth and for adult weight, to make sure we've got those figures and the genetics combining in the right way. If we jump forward to the next graph, the graph in the middle is muscle. Muscle is brilliant at helping cap adult weight, as Fergus alluded to earlier. If we're driving early growth and also selecting in high levels of muscle, we get all the benefits of early growth: for wether lamb turn-off, for ewe lamb joining, for lamb survival, a whole range of benefits. But if we're compromising that because we're running 80 or 90 kilo adults, then we're robbing Peter to pay Paul. So to put the best picture together, we want the early growth we saw in the previous slides matched with muscle, so that adult weight caps at a sensible level.

Audience member: Just wondering, is the blue line Mumblebone? What are the others?

Chad Taylor: Mumblebone is the blue line, front and centre, the Mumblebone data, and the industry in its varying forms is beneath that. Thank you.

Fat, fleece weight and wool per hectare

Fat is another one. We're certainly extremely keen on fat, even more so having heard Tomo speak again. We heard Tomo at the first road show in Jamestown only a month ago, and I took a lot of information in from that, but I've taken a heap more in again today. It's a big space, just that one trait alone, and the connection it has to so much else in the Merino. So it was wonderful to hear all that information again, Tomo, and I look forward to having the final results of this work as soon as possible.

Fat's very important to us, and we'll look to continue driving fat to new levels. For those who understand breeding values, our average is around plus one for fat, which is well in front of the industry. There's a young sire coming through this year with a brilliant row of traits across just about everything that is also 3.2 for fat, which is off the charts. It's miles in front of anything I've seen so far with a useful combination of other traits. So there's a whole upside left genetically that we can offer, and where that takes the industry is exciting to think about. We're really into seeing where we can go with that, with exciting young individuals like that coming through.

The wool traits. This is where, keeping it diplomatic, I think the industry has probably had goalposts set that may have been relevant in the '50s. In my humble opinion, the goalposts have shifted a long way. If we're still aiming at goalposts that are 180 degrees from where we should be going, we're really going to struggle to kick a goal. To kick a goal, we need to be aware of where the goalposts are and then line up with those posts.

Understanding how fleece weight can be antagonistic with so many other profit drivers, I think it makes sense to have a sensible level of fleece weight, which is where the fleece weight to body weight ratio comes into play. We understand our standard reference weight and how much wool we should expect to cut from our ewes, and then we know what sort of fleece weight targets to set. We're tracking along the same lines as the industry in terms of increasing fleece weight, or maybe a few percent behind, but I'm more than happy that we're currently cutting about seven kilos off our ewes, and our ewes are capping at 65 kilos.

We're shearing twice a year, which I think gives us a bit of a free kick. We measured 8% more wool because we shear twice a year, which roughly nets out the extra shearing cost. So we're not looking to drive fleece weight high to drive fleece value. Our next step will be to start to wind micron down, provided we can do that without compromising any of the other important profit drivers. Fibre diameter CV is the one on the left, which also correlates with high-fat sheep. It's just a rough proxy for wool quality.

To put it in other terms, and I think it's a really important message, there's fleece weight per hectare. Tomo has done a great job of covering that earlier, if you were able to take enough of it in. If we can run really efficient sheep that have an average or below-average fleece weight per head, but potentially run more head per hectare, we have the opportunity to cut just as much wool, if not more, per hectare through stocking rate. I think that's one of the massive doors that fat opens up.

This example from Dave Greig illustrates that very well. I'm sure some of you will have seen this work before, but I'll take you through it again for those who haven't. In 2010, Dave started with us on a new genetic journey, and 10 years down the track it's a very different story. In 2010, when he started, 50% of his gross income was wool and 50% was sheep, whether that was the lambs or the surplus ewes being sold. Ten years later, he's still getting just as much wool rolling out his door, but it now represents only 25% of his total gross income, simply because he's gone from 75% lambs in 2010 to 141%, steadily increasing over that 10-year period. To me, that is a transformation of that sheep business, and there are other examples in the room that I might touch on in a minute.

Reproduction is a very important part of the profit-driving transformation we saw with Dave Greig and with other flocks around the country, and it's certainly what we want to keep doing at home. Genetic turnover is a very important part of transitioning from one school of thought to another. So the more lambs we produce efficiently, in conjunction with the wool value traits, the better; it's a very important part of the mix. I'm pleased to say we're well in front of the industry there, and we're looking to up the ante on that even more. That fits neatly with having more fat in the system, to produce a more efficient animal that maintains its condition score easily, which assists conception rates, lamb survival and overall weaning rate.

Welfare traits and the cost of production

On the welfare traits, I think there's a real opportunity as an industry to communicate our messaging a lot better. We're probably seen to be fighting a lot of the welfare challenges we're being asked to take on, in terms of ceasing mulesing, driving lamb survival and maybe ewe mortality. There are a few things we're probably pushing back against, but I think we'd be far better served if we embraced those challenges, connected with our customer, and produced an article that is fit not only for our purpose but for theirs, aligning our production goals with our welfare needs. A lot of that work's already been done.

It's interesting that when we put a lot of these welfare traits in from the left, worm resistance in this case, it produces a far better animal in terms of profitability that is also fit for what our customer is asking for. So there's a really neat fit there. I do love the story behind worm resistance linking to improved immunity, and that improved immunity in the sheep linking to footrot resistance and overall lamb survival. I think there's a wonderful message in that, and it's pretty new to our world, but I suspect there are more doors that will open up.

It fits pretty neatly that if we're in the space of wanting to understand the science, explore it and keep up to speed with it, then something new, like what Fergus just talked about on the immunity front, is very easy to absorb and run with to the next stage. But if we're still doing everything without data at all, then something like this comes in and it's too hard to pick up, and the gap only widens between modern thinking and where we've been.

Then there are the welfare traits of wrinkle, cover and dag. We've had a high priority on breech wrinkle. It's not a trait we actually select for anymore; that's just part of the deal, and our sheep are all very plain. The selection pressure is moving across those graphs to cover and dag. Four or five years ago, we thought wrinkle and cover were the secret to breeding a sheep that was easily maintained when it wasn't mulesed, but we've shifted that thinking to wrinkle and dag, and we'll bring cover along as best we can. Dag has become a high priority in our selection mix for the reasons we talked about earlier. There's nothing good in dag. There's only work and only cost, so we just need to breed it out of our system as best we can. That's very much the focus of what we're doing at home.

You'll notice that a trait we've been selecting for for a long time, like wrinkle, is very stable where it's at now, whereas cover and dag are still jumping around a lot more. That's simply because some sire groups we use might be better or worse from one year to the next. As those traits become built in more stably across the stud ewe base, those graphs will start to flatten out, and we think they'll flatten out at a level that's well in front of the industry. So those are welfare traits that are already at very good levels for people wanting to combine them.

Jumping a bit left field, but with a graph to support that welfare need and reducing the cost of production: this is information from Charlie Massy about the Canadian broadacre farming system. We couldn't get the Australian information, because they wouldn't release that work, but it's assumed to be much the same picture as in Canada. The blue line shows the gross income from farming businesses in Canada steadily increasing over time in real terms. The frightening part is the green line, which is the net profit from that increasing productivity. The difference between the two is the cost of production, going back to the early 1900s through to 2016.

So that's another reason, from a profitability point of view, to take out all those jobs. Like Fergus said, we don't want to be dagging sheep, we don't need to be drenching any more than we absolutely have to, and mulesing's a cost. All of these jobs we can often deal with genetically, or at least minimise through genetic selection, which is the space that fascinates us and something we'll definitely keep working towards.

Wool quality, eating quality and commercial results

On the newer wool traits, we saw earlier the importance of colour. The graph on the left is colour. As we were driving in fat, we compromised some of the wool traits, because we wanted fat in the system very quickly. We'd come from a very good area for colour, we went back to average, and we're now heading very much in the right direction again, taking fat with us. So we've got well above industry average fat, and fat and muscle were where we compromised this trait particularly. But it's now great to see that we're able to combine wool colour, fleece rot and character at much better levels through selection, having built fat in to very high levels. It's just breeding. Fleece weight and micron are antagonistic traits, but we can combine those traits through selection even though they fight against each other, just like combining fat and fleece weight, or colour and fleece weight, or colour and fat. Whatever traits we want to combine, it's easy to do if we've got the numbers to select on.

On eating quality, I won't go too hard on this, because we'll cover it in more detail later this afternoon. Again, these graphs are jumping around all over the place, because some sire groups have been good for IMF and some not so good. We're including intramuscular fat, the IMF, which is the marbling in the meat, as a secondary trait in what we do. If we've got 20 rams in front of us that all tick the box, we'll then identify the ones that have the better IMF to include in our mix, and look to improve the intramuscular fat of our whole stud enterprise as we move forward. In my view, it's got to be done in a way that isn't going to compromise the other traits. I'm looking forward to hearing more on that front, and there's a great story on that in the Gundagai Meat Processors work.

To try to summarise all that, we do have a few clients who've come on board in the last few years who are meticulous with their data collection. Dave Greig was one I talked about before, and Nathan Gibbs is another. The traits I just spoke about were measured before Nathan decided to come on board, and the difference in the type of sheep was just unbelievable, to the point where the pure Mumblebone cross was compared to the original bloodline.

The summary of that difference was 10% ewe mortality in the original compared to 1% in ours. The comment from Nathan's father was that the difference in ewe mortality paid for the ram team in the first year. Those are significant numbers, and that was when ewes were valued at 250 bucks a head, so not current values, but it's significant nonetheless.

Some other data that came from that was marking rates. There were 40% more lambs: I think 92% in the traditionals compared to 135% in ours. So there were a lot more twins in the Mumblebone blood, but even though there were a lot more twins, they were still a kilo a month heavier for the first seven months. That enabled them to be sold at eight months, as opposed to carrying on to 12, maybe 14 months.

Where I thought the difference would have been quite obvious was the fleece weight of the ewes, and this probably correlates back to the fat. The difference in greasy terms was 100 grams in favour of the traditionals, but the yield on the Mumblebones was higher, so the clean fleece weight, which is what we get paid for, was identical. So that's 40% more lambs, growing a kilo a month faster over the first seven or eight months, with the ewes cutting the same weight of wool. It's another example of a transformation of what's happening in the Merino space, and I'm more than happy to say I'm pretty proud of it.

Mumblebone indexes

Proving progress is where we're going next. Benny's been instrumental in setting this sort of stuff up. There's a lot of data involved in what we measure, and at a stud level I think it's very important to stay across all of that data, to make sure nothing is being left behind or something isn't being promoted too fast. But in a commercial sense, we've got these indexes now. This is the Mumblebone Index that we set up last year and offered with the sale catalogue.

We did an analysis on this last year, and the trait that correlated most closely to price was the index, followed by condition score, followed by weight, followed by fleece weight, followed by everything else. So it was interesting to see that, whether buyers knew it or not, they were actually paying for the higher-indexing animals. That gave us the confidence to continue with this index thinking, and as a result we've developed a couple of other indexes. They're just up here behind me, and you're welcome to have a closer look or talk to me about it later.

Instead of looking at every individual trait to make a commercial decision about which ram to buy, and then in the pressure of the auction trying to decide whether that's within budget or not, we think these indexes help. They're specific to Mumblebone; they're not relevant to other studs. The breeding values are a way to compare stud to stud, but if you're confident in the direction we're heading, these indexes should help simplify the selection process. The Mumblebone Index is the one that's put us on the path we're on, and we've got a couple of other indexes coming with it, one more focused on wool and one more focused on carcase. I'll get into those in a minute.

Something I think is pretty cool is what's happening with the 23 drop. When we compare the index from last year and our top sires to what's happening in the 23 drop, there are 177 ram lambs coming through this year that have a higher index figure than our current top sires.

Yes, again: there are 177 ram lambs coming through this year in the 23 drop that have a higher index figure than our current top sires. And there are 456 ram lambs coming through with a higher index figure than the average of our current sire team. Things have just exploded, which is pretty cool. That's on the back of all the data we measure, and then being able to accurately map the sire and dam combinations to produce the best mix in the next generation.

Wool Plus is one of the two indexes we'll offer in conjunction with the Mumblebone Index. I won't take you through the detail, but there's slightly more weighting on fleece weight and micron. To get that extra selection pressure on those traits, we've wound back the selection pressure on fat and muscle. Fat and muscle are at very high levels compared to the industry, so we've wound them back to be just above industry average and increased the selection pressure for fleece weight and micron. This is an index that's probably better suited to those not really driving stocking rate. Maybe they've got big areas of stubble and don't need the stocking rate because the sheep are working in conjunction with something else, or it could just be a preference to favour the wool traits. It's also got a staple length weighting to suit 12-month shearing, whereas the Mumblebone Index is driving staple length towards six-month shearing.

The other index, before we finish up, is Carcase Plus. This is an index that puts even more pressure on growth, fat and muscle, and to get that selection pressure we've wound back the selection pressure on fibre diameter. This one's targeting those who maybe have high-VM country. It makes little difference whether you're 17 microns or 20 microns if you've got 6% VM in your wool. So it suits people like Dave Greig, who has a heap of clover burr in his country most of the time. It's also a way for composite breeders who are looking to add fleece value into their mix. This could be a great way of stepping into a much finer micron range, with really high selection pressure on growth, fat and muscle to maintain a similar animal, but with a much higher fleece value.

And that's us. In summary, we've put a lot of work into building the capacity of the rams we have, in terms of both quality and quantity. So if you have any interest, that capacity has been built in, and we're keen to work with more flocks around the country, wherever you may be. If you have any questions, please let me know; I'd very much like to hear from you. Thank you for your time, and thank you again for being here today.