TOOLS FOR PREDICTING BLACK WAGYU...

GINJO STORY

Mike Buchanan. Australian Wagyu Assn Conference 2012. Gold Coast Qld.

GINJO STORY

* “Thank You” to the Assn for this opportunity

* The following is NOT a prescription

Scenario: A small FB WY feeder startup 1998 -2012

Ginjo Story

o Why ?

Need a Small, Rural ‘Second Life’

Business without ‘Off-farm’

o Why Wagyu?

Unique market dynamic:

- WY= Foodservice/media ‘pull’

- CAB= Brand mktg ‘push’

Scenario: A small FB WY feeder startup 1998 -2012

What was I thinking …#@*!

1998 Assumptions

FB best target because:

* Likely demand progression = F1FB with

consumer sophistication

* ‘Early mover advantage’ potential in FB niche

*Too late/small for competitive, sustainable F1

Key issue: when will FB feeder spot market emerge ?

Ginjo Story

Agenda

•The Plan: Production & Sales Targets

•Resources vs Requirements

•Risk Mitigation

•Herd Build Phase 1 – 1999-2005 (Retained

ownership)

•Herd Build Phase II – 2005-2012 (Outright sale)

•Parallel by Sires: 2001 vs 2006 Selection/Outcomes

•2012 Enterprise Scorecard

•In my dreams….

Ginjo Story

PART 1: THE PLAN: Production & Sales Targets

Production Stage 1 (Nucleus Herd Build 1998-2005) (Loss or break even)

•Aust. weaner /US cow-calf/JP calf business model

•Selection tools: TBA (?)

•All grassfed, no pre-weaning supplementation

•Mostly ET, some AI, limited NM joining

•Heifers retained. Target FB breeders 150~200hd

Ginjo Story

Production & Sales Plan

Sales Stage I (Nucleus Herd Build 1998-2005) (Loss or break even)

* Target ‘outright feedlot sale’ @ min. $1K/hd

*(???)200~350kg FB castrates @ 8~15moa

* (???) recip cattle & (??) opportunity F1s/FB bulls

Gross $??? PA

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Stage II Production (Est. from 2005)

(Profitable)

*Aust. weaner /US cow-calf/JP calf market model

* Selection by progeny performance ‘proof’

* AI & paddock joining

* All grassfed, no supplementation to weaning

Ginjo Story


Stage II Sales (Est. from 2005)

(Profitable)

*50-60 x 200~350kg FB castrates @ 8~15moa @ min. $1K/hd

* 50-70 x PTIC/maiden FB breeders @ $2K ~ $5K/hd

*Elite bulls x ?? @ $4K ++

Maybe > $200K Gross (?)

Ginjo Story

Resources & Requirements

Actual Resource - 1998 Required Resource 1999-

Land 40.2 Ha improved pasture MNC NSW ~400 Ha improved pasture MNC NSW

(High rainfall/ est. 1 breeder three acres)

Livestock Nucleus: 7 FB WY (6 female/one bull) Nucleus + ~ 100 recips to start

HR Principals (husband/wife) Principals + skilling + AB techs

Assets 40.2Ha freehold property

Capital Sufficient (?) All available incl. property security

Ginjo Story

PART 2: RISK MITIGATION

Strategy Devise complementary property development offset to high risk cattle project

Tactic Secure/improve underperforming grazing acres in coastal/Sydney rural hinterland

Measurement By carry-cap. Assess actual/potential stocking @ $5K/cow unit space (Lee & Lee, 1999)

ID ‘Other’ Risk Improve HR Skilling

Ginjo Story

Risk Mitigation Implementation

Purchase (Oct. 1999): ‘Jerburah’, Bulliac via Gloucester, NSW. High RF belt. MNC basalt/brush country. Bare block. No power/phone. Track access. Incomplete development.

Area Est. 360 Ha Est. carry cap value ($5K/unit)

$470K

Carry cap 1999 91 breeders + 4 bulls Purchase Price 1999 ($289K)

Fencing Est: >30% write-off. 3 x paddocks Est. P/L by carry cap + $181K Woody weed Est: 20-30% total area (lantana/tobacco

bush)

Pasture Improved = 0%

Fertiliser history 0%

Water coverage Inadequate for carry cap expansion

Potential ~ 30-50% carry cap increment with subdivision, weed/pasture/fertilizer/water improvement

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(Before)

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(After)

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HR & Skilling Approach – Cost Minimisation

*Principals-only labour, w/aerial & AB contractors

‘Back to School 2002-2011’

*UNE Certificate Feedlot Management 2003

* Master of Agriculture 2012

Ginjo Story

Risk Mitigation Outcome

Post Development 2012: ‘Jerburah’, Bulliac via Gloucester, NSW. High RF belt. MNC basalt/brush country. Bare block. No power/phone. Track access.

Area Est. 360 Ha 1999 purchase Price ($289K)

Carry cap 2012 150~230 breeders + 4 bulls Development charges (~$100K)

Fencing 95% sound. 8 x paddocks 2012 mkt value ± $2K/acre $800K~$1.2M

Woody weed Est: <5% (lantana/tobacco bush) 2012 mkt value @ $5K/unit $750K~$1.15M

Improved pasture Est. 95% of grassland

Fertiliser history 100% grassland x 3

Water coverage All new paddocks + central storage

Exceed carry targets & est. mitigation project P/L: $400~$800K

Ginjo Story

PART 3 : HERD BUILD 1999-2005

Inadequate Selection Tools

*Seedstock vendor fliers, breed society info

*Mb sole emphasis most ‘literature’

*Minimal FB production data

*No FB $$$ performance data

Ginjo selection mistakenly focuses on single carcass trait/strain

(Mb/high Tajima)

Ginjo Story

Herd Build 1999-2005 (Retained ownership)

Key Events

*On farm accidents

*AB programs miss targets

*No FB feeder market for ‘outright sale’ emerges pre-2005

*Custom fed GIN FB feeders underperform

*Feeding profitability achieved (courtesy David Blackmore)

Operation commercially & genetically unsustainable

Ginjo Story

Herd Build – 1999-2005 (Retained ownership)

Profitability/Sustainability Issues

* Weaning weights deficit = supplement cost

* 200-400dy performance deficit = supplement cost

* Custom feed cash flow: >120 castrates X $ daily ration

* Carcass marketing: no GIN resource

Ginjo Story

Herd Build – 1999-2005 (Retained ownership)

2005 Business Snapshot

* No targets achieved

* $$$ Loss generation continues

* Debt facilities activated

But: AACo opens first spot market for FB

feeders

Ginjo Story

PART 4: HERD BUILD 2006-2012

GO BACK TO SQUARE ONE:

I’m turning Japanese, I think I’m turning Japanese.. I really

think so.... The Vapors, 1980. ( & Kurt Cobain 1991)

Ginjo Story

Herd Build – 2006-2012 (Outright sale)

‘New’ Foundations

√ AACo spot market for FB feeders

* JP ansi lit. dbases (via UNE)

* JP pedigree analysis: Mr Takeda, via Kumiko Wada

* JP FBWY market data (via Tak Suzuki co-venture)

* JP focus AWF website (via Tak Suzuki co-venture)

- Generates massive ROI

Ginjo Story

Foundations Of A ‘Revised Emphasis’

* AACo spot market for FB

feeders

* JP ansi lit. dbases (via UNE)

* JP pedigree analysis: Mr

Takeda, via Kumiko Wada

* JP FBWY market data (via Tak

Suzuki co-venture)

* JP focus AWF website (via

Tak Suzuki co-venture)

- Generates massive

ROI

Ginjo Story


Expanded Selection Toolkit Options

* JP pedigree analysis/sire market data

* GeneStar genetic marker tests

* Prescribe Genomics marker tests

* BREEDPLAN EBVs & Indexes

* Own herd database/phenotype measurement

* Feedlot carcass data

TOO MUCH INFORMATION ? (And Cost …)

Ginjo Story

Selection Tools Experimentation: 2004-2008

* Numerous animals assessed for Gstar & Prescribe

* All available tools applied

* Results Example: two GIN backup sires

- 2003- 2008: Ginjo MarbleMax W98

- 2008-2012: Ginjo MarbleMax B901

*(NB: Progeny growth results closely parallel comparable top AI sires)

Ginjo Story

APPLIED SELECTION TOOLS - A TALE OF TWO BULLS

2001: Ginjo MarbleMax® W98

Ginjo Story


2006: Ginjo MarbleMax® B901 (Regd AI Sire)

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Comparison by Legacy Tools

Pedigree Analysis ~ Tajima Kedaka/Tottori Itozakura Shimane

MarbleMax W98 77% 15% 3%

MarbleMax B901 44% 19% 25% 13%

Phenotype Notes 179 Day Wt 434 Day Wt Initial Selection

MarbleMax W98 Looked good Still looked good By (Tajima) pedigree

MarbleMax B901 212kg 438kg Phenotype/pedigree

Ginjo Story


Comparison byTechnological Tools

BREEDPLAN EBV PERCENTILES : 50% = Breed av. 2007 Explanation

MarbleMax W98 N/A N/A Not unavailable

MarbleMax B901 IMF: (-12%) 200dy wt: (+45%) AWA 2009 Spring WY Gp BREEDPLAN

GeneStar Marbling 2005 M2 2007 M4 MVP

MarbleMax W98 4/4 stars 5/8 Stars N/A

MarbleMax B901 N/A 4/8 Stars 0.35MS – Top 70%

Prescribe GH Exon 5 SCD Official Interpretation

MarbleMax W98 CC VA GHE-5 CC= original JP Black. Low growth, high Mb (10/1/04). SCD AA is preferred type (22/3/06)

MarbleMax B901 AA VA GHE-5 AA= unsuitable for breeding JP Black, remove from herd (10/1/04). SCD AA is preferred type (22/3/06)

Ginjo Story

* Superior phenotype targets key (growth) deficit

* JP sire selection data (Wildcard: 001 progeny test)

* Outstanding flush sib carc (10/2008)

* Another flush sib (sire C878): identical

* (Eventually:) progeny proof


So why select B901 ?

Ginjo Story


Actual progeny performance:

*Significant ‘averages’ improvement possible with consistent dam

genetics

Comparative Progeny Performance: Producer Critical Traits

Castrate Progeny Av Kg @ Weaning Post-wean ADG Av

MarbleMax W98* 15~17ea

180.79kg/Av 204 days* Very slow

MarbleMax B901 207kg/Av 210 days Much better

*Equivalent performance to best high Tajima AI sires

Comparative Progeny Performance: Feedlot Critical Traits

Castrates #15~17ea Carc. Mb Score On Feed ADG* HDCW

MarbleMax W98 7.13/12 (JMGA Equiv) 0.83 407.5kg

MarbleMax B901 7.76/9 (AUSMEAT) 0.804 449.0kg

*Significant variation in DOF

Ginjo Story

Herd Build – 2006-2012

Selection Tools Outcome

2012 Selection Tools Utilised & Ranked

Tool Importance

1. Feedlot carcass data Lifetime performance assurance. (EG: 0.55 Mb Heritability/Oyama 2011)

2. Phenotype measurement Actual growth given lower heritabilities of growth (0.30) /maternal traits

3. JP pedigree/market analysis Genetic diversity conservation & trait ‘weighting’

4. JP animal science literature Provides foundation data to selection specification

5. 200-400 day EBVs Reality check on phenotype measurement

Ginjo Story


Selection Tools Outcome

2012 Selection Tools NOT Now Utilised

Tool Reason for Non-Utilisation

Scan for Mb/Scan EBVs No located peer-reviewed literature proof of stand-alone accuracy as predictor.

Cost/benefit.

600 day EBVs

‘No-where’ age in GIN WY. Steers sold prior 600 days/on feed to 900. No located

literature validating scan data comparison of fed steers with paddock raised sibs.

Cost/benefit.

BP Feedlot Index AWA advisory: Index is ‘not for producers of yearling feeders’ (Bennett/Duff: pers. corres)

GeneStar Contradictory predictions/results.

Prescribe Genomics Contradictory predictions/results.

Ginjo Story


2012 Outcomes

Seedstock Achievement:

* Completed genetics exports USA, Europe, Middle East

* B901/C878 progeny USA, Middle East, Australia

* B901 sons available 2013

* On-going experimental breeding

Feeder Performance:

* Superior weaning weights

* Improved 200-400 day growth

* Reduced supplementation

* Increased profitability

* Consistent strong carcass performance

Ginjo Story


2012 Outcomes

Replacement Breeders

* Superior weaning performance

* No weaner ill-thrift

* New generation higher growth/strong Mb females

* Improved herd development foundation

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Ginjo 2012 ‘Small Business’ Scorecard

Business Plan: Targets achieved or exceeded

Freehold : ~ 400 Ha improved pasture MNC

Livestock : ~ 200 FB breeders + 25 bulls

HR : Principals (husband/wife)

Debt : Nil

Ginjo Story

In My Dreams ….

Production: - 900 day Group BP EBV using actual carcass

data

Marketing: - Recognised beneficial WY ‘breed effect’ in

MSA (Polkinghorne 2006)

Development: - Robust ‘Junior Wagyu’ Schools Carcass

Movement

Ginjo Story

Thank You

David & Julie Blackmore

Simon Coates DVM

Hong Duong

Greg & Maryanne

Gibbons

Barb O’Shea

Arthur Poynting DVM

Takao & Yuko Suzuki

Mr Shogo Takeda

UNE Faculty of Science

Kumiko Wada

Ced Wise DVM

Ginjo Story

TOOLS FOR PREDICTING BLACK WAGYU...

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