WEBVTT 00:00:11.720 --> 00:00:15.060 Breaking free from the chains of the past Where 00:00:15.060 --> 00:00:18.820 truth moves faster than a Holstein calf No law 00:00:18.820 --> 00:00:21.660 waiting on some printed page We're charting new 00:00:21.660 --> 00:00:25.300 ground in the digital age From genomic codes 00:00:25.300 --> 00:00:29.120 to robot facts We cut through the noise, no hold 00:00:29.280 --> 00:00:32.460 them back not your daddy's dairy news tonight 00:00:32.460 --> 00:01:03.350 we're sparking Welcome to the Bullvine Podcast, 00:01:03.810 --> 00:01:06.969 the dairy industry's no -BS source for insights 00:01:06.969 --> 00:01:10.890 that actually matter to your bottom line. If 00:01:10.890 --> 00:01:13.250 you're tired of sugar -coated industry reports 00:01:13.250 --> 00:01:15.430 that don't tell you what's really happening on 00:01:15.430 --> 00:01:19.129 the ground, you've come to the right place. Today, 00:01:19.290 --> 00:01:21.689 we're diving deep into a story that's been hiding 00:01:21.689 --> 00:01:24.730 in plain sight, and it's about to cost you serious 00:01:24.730 --> 00:01:28.109 money. Your genetics rep has been pushing those 00:01:28.109 --> 00:01:30.959 two -year contracts lately, right? field service 00:01:30.959 --> 00:01:33.719 delays getting worse? There's a reason for that, 00:01:33.840 --> 00:01:36.780 and it's not what you think. We're talking about 00:01:36.780 --> 00:01:39.939 a hundred million dollar disruption that's reshaping 00:01:39.939 --> 00:01:43.519 the entire genetics market. And somehow, nobody's 00:01:43.519 --> 00:01:46.780 talking about it. Until now. This isn't your 00:01:46.780 --> 00:01:49.659 typical market analysis. We've got the data, 00:01:49.760 --> 00:01:52.500 the insider intelligence, and most importantly, 00:01:52.700 --> 00:01:55.299 the action plan you need to protect your operation. 00:01:55.859 --> 00:01:58.319 Because while everyone else is waiting to see 00:01:58.319 --> 00:02:00.900 what happens, Smart producers are already making 00:02:00.900 --> 00:02:03.640 moves, so grab your coffee and let's get into 00:02:03.640 --> 00:02:06.939 it. This is information your genetics company 00:02:06.939 --> 00:02:09.460 doesn't want you to have, but you absolutely 00:02:09.460 --> 00:02:12.300 need to know. Welcome back to the Bullvine Podcast, 00:02:12.400 --> 00:02:14.659 where we cut through dairy industry noise to 00:02:14.659 --> 00:02:17.300 get you the insights that actually matter for 00:02:17.300 --> 00:02:20.629 your operation. And today we're diving deep into 00:02:20.629 --> 00:02:23.409 a feature piece that's been generating some serious 00:02:23.409 --> 00:02:25.569 buzz. This isn't your typical market update. 00:02:25.789 --> 00:02:28.330 No, definitely not. This one's got layers and 00:02:28.330 --> 00:02:30.610 some, well, fundamental global shifts that are 00:02:30.610 --> 00:02:32.729 going to make farmers rethink how they've been 00:02:32.729 --> 00:02:35.009 approaching their entire breeding program starting 00:02:35.009 --> 00:02:38.509 like yesterday. Okay, let's unpack this. We're 00:02:38.509 --> 00:02:40.349 talking about the conversation your genetics 00:02:40.349 --> 00:02:43.259 rep isn't having with you. Before January 1st, 00:02:43.259 --> 00:02:45.319 right? And the sources we've looked at, they 00:02:45.319 --> 00:02:47.919 paint a pretty grim picture. I mean, this isn't 00:02:47.919 --> 00:02:49.740 just a slow market correction we're seeing. No, 00:02:49.800 --> 00:02:52.159 it's way beyond that. It's a fundamental global 00:02:52.159 --> 00:02:54.780 restructuring of the whole genetic supply chain. 00:02:54.979 --> 00:02:56.960 Driven by what? It seems like a double whammy. 00:02:57.000 --> 00:03:00.219 Yeah, a catastrophic loss of export volume coupled 00:03:00.219 --> 00:03:02.520 with these skyrocketing domestic replacement 00:03:02.520 --> 00:03:05.360 costs. It's kind of a perfect storm. What's fascinating. 00:03:05.870 --> 00:03:08.650 or maybe terrifying, is how quickly this volatility 00:03:08.650 --> 00:03:11.629 overseas translates, like directly to your bottom 00:03:11.629 --> 00:03:14.110 line right here in the U .S. We need to be crystal 00:03:14.110 --> 00:03:16.969 clear about the stakes up front. The executive 00:03:16.969 --> 00:03:19.870 summary conclusion from the analysis is stark. 00:03:20.090 --> 00:03:22.689 I mean, really stark. How stark are we talking? 00:03:22.750 --> 00:03:26.050 A typical 500 cow operation is facing a potential 00:03:26.050 --> 00:03:30.530 $12 ,000 annual jump in breeding costs. Starting 00:03:30.530 --> 00:03:34.379 first quarter? 12 grand. Just poof. Add it to 00:03:34.379 --> 00:03:36.780 the input ledger. And, you know, I think that 00:03:36.780 --> 00:03:38.979 figure might even be conservative. It could well 00:03:38.979 --> 00:03:40.939 be. Especially when you factor in this whole 00:03:40.939 --> 00:03:43.580 market disruption happening at the same time 00:03:43.580 --> 00:03:46.520 as the potential select sires and estrogen merger. 00:03:47.120 --> 00:03:49.199 I mean, that inherently reduces competition. 00:03:49.639 --> 00:03:51.780 Absolutely. It definitely stacks up. This really 00:03:51.780 --> 00:03:54.099 is shaping up to be a perfect storm for input 00:03:54.099 --> 00:03:56.219 cost inflation, isn't it? It really is. And it 00:03:56.219 --> 00:03:58.180 raises a critical question, I think, for every 00:03:58.180 --> 00:04:00.360 producer listening right now. You've got Russia 00:04:00.360 --> 00:04:02.400 and five other nations. They essentially stopped 00:04:02.400 --> 00:04:06.099 buying American dairy genetics, creating conservatively 00:04:06.099 --> 00:04:09.000 this massive hole in international volume sales. 00:04:09.199 --> 00:04:10.960 We're talking about a hundred million dollar 00:04:10.960 --> 00:04:13.819 hole. just vanished almost overnight a hundred 00:04:13.819 --> 00:04:16.899 million that's huge volume so the question is 00:04:16.899 --> 00:04:20.240 who's paying to fill that revenue void yeah guess 00:04:20.240 --> 00:04:23.000 who the answer just mechanically is you domestic 00:04:23.000 --> 00:04:26.560 producers are footing the bill they have to through 00:04:26.560 --> 00:04:29.720 a sort of mandatory reliance on premium high 00:04:29.720 --> 00:04:32.040 margin genetics because the companies have to 00:04:32.040 --> 00:04:34.779 make up that lost revenue somehow precisely there's 00:04:34.779 --> 00:04:37.699 no other way for them really yeah OK, so let's 00:04:37.699 --> 00:04:39.920 start by identifying the primary, the immediate 00:04:39.920 --> 00:04:42.720 driver of this whole disruption. It's that vanishing 00:04:42.720 --> 00:04:45.139 export market in Eastern Europe. Right. We have 00:04:45.139 --> 00:04:47.779 the Eurasian Economic Commission's October report, 00:04:47.939 --> 00:04:50.860 which is like the core data point here. And it's 00:04:50.860 --> 00:04:53.220 a bombshell, truly. What does it say? It shows 00:04:53.220 --> 00:04:56.560 that Russia, Belarus, Kazakhstan, Armenia and 00:04:56.560 --> 00:05:00.069 Kyrgyzstan. they cut their breeding animal imports 00:05:00.069 --> 00:05:04.629 by a staggering 64%. Wait, 64? 54%. Between 2022 00:05:04.629 --> 00:05:08.209 and 2024. Wow. Okay, that is not a blip. That's 00:05:08.209 --> 00:05:09.790 not some political spat that's going to blow 00:05:09.790 --> 00:05:12.310 over next quarter, is it? Not at all. That level 00:05:12.310 --> 00:05:14.589 of volume loss, I mean, that's unprecedented 00:05:14.589 --> 00:05:17.470 in such a short time frame. It signals a complete 00:05:17.470 --> 00:05:20.170 strategic shift. you know, and how those markets 00:05:20.170 --> 00:05:22.149 are approaching their food security. That's precisely 00:05:22.149 --> 00:05:23.610 the point. You hit the nail on the head. It's 00:05:23.610 --> 00:05:26.069 not a temporary trade dispute. It's a strategic 00:05:26.069 --> 00:05:30.209 retreat from relying on imports. Okay. And we 00:05:30.209 --> 00:05:33.209 see specific, really clear examples of this strategy 00:05:33.209 --> 00:05:35.769 playing out in other sectors, too. Like Russia 00:05:35.769 --> 00:05:38.350 boosting its domestic poultry breeding production 00:05:38.350 --> 00:05:42.490 by 9 .1 million heads, while simultaneously cutting 00:05:42.490 --> 00:05:47.110 imports by 70%. 70 % in poultry, too. Yeah. This 00:05:47.110 --> 00:05:49.689 is the... clearest possible signal, I think, 00:05:49.750 --> 00:05:52.449 of a long -term national commitment to self -sufficiency 00:05:52.449 --> 00:05:55.730 in genetics. The source states it emphatically. 00:05:55.949 --> 00:05:58.529 These high -volume markets are gone. Oh, gone. 00:05:58.810 --> 00:06:01.250 Gone, gone. Because these nations are aggressively 00:06:01.250 --> 00:06:04.370 developing their own competitive, often subsidized 00:06:04.370 --> 00:06:06.810 domestic genetic supply, they don't need ours 00:06:06.810 --> 00:06:09.069 anymore, or at least not nearly as much. Hold 00:06:09.069 --> 00:06:10.449 on, let's translate this into farmer economics. 00:06:10.829 --> 00:06:13.449 I mean, genetics companies, historically, they 00:06:13.449 --> 00:06:16.149 relied on immense economies of scale, right? 00:06:16.459 --> 00:06:18.459 Absolutely. That was the model. They could mass 00:06:18.459 --> 00:06:21.879 produce millions of doses of standard semen, 00:06:21.980 --> 00:06:24.680 sell them globally, often at pretty low margins, 00:06:24.800 --> 00:06:26.819 just to keep the whole system running efficiently. 00:06:27.060 --> 00:06:29.259 Yeah. And that kept the straw prices for the 00:06:29.259 --> 00:06:31.339 rest of us here in the U .S. somewhat reasonable. 00:06:31.420 --> 00:06:34.019 That was the engine. Yeah. Low cost production 00:06:34.019 --> 00:06:37.660 enabled by massive volume. So that means those 00:06:37.660 --> 00:06:40.660 massive, steady volume sales that kind of kept 00:06:40.660 --> 00:06:43.759 the baseline straw prices low, they are absolutely 00:06:43.759 --> 00:06:46.569 gone. Vanished. And the entire financial model 00:06:46.569 --> 00:06:50.029 for like every major genetics company has just 00:06:50.029 --> 00:06:52.170 been destabilized overnight. That's the core 00:06:52.170 --> 00:06:54.610 mechanism. That's the driver of the price shock 00:06:54.610 --> 00:06:56.949 you're probably already feeling or about to feel 00:06:56.949 --> 00:06:59.449 very acutely. Okay. If we connect this to the 00:06:59.449 --> 00:07:01.769 bigger picture, the implication for domestic 00:07:01.769 --> 00:07:05.139 producers is immediate. And it's severe. Genetics 00:07:05.139 --> 00:07:07.459 companies must now redistribute all those fixed 00:07:07.459 --> 00:07:10.180 costs, R &D, bull procurement, infrastructure, 00:07:10.500 --> 00:07:13.399 staffing across a much smaller, much more fragmented 00:07:13.399 --> 00:07:15.980 sales volume. So to make up the money. Right. 00:07:16.060 --> 00:07:19.220 To replace, say, a dollar of lost export revenue 00:07:19.220 --> 00:07:21.860 from a standard, maybe an $8 straw they used 00:07:21.860 --> 00:07:24.740 to sell easily. Now they have to sell a premium 00:07:24.740 --> 00:07:28.279 domestic straw, one that might be priced at $40 00:07:28.279 --> 00:07:31.990 or $50. And this. disproportionately hurts the 00:07:31.990 --> 00:07:33.889 small and mid -sized operations, doesn't it? 00:07:33.949 --> 00:07:35.970 It really does. They're the ones who, you know, 00:07:35.970 --> 00:07:38.509 traditionally utilize more of the standard conventional 00:07:38.509 --> 00:07:42.410 genetics. for their base herd. Exactly. Now they 00:07:42.410 --> 00:07:45.610 face this massive, basically non -negotiable 00:07:45.610 --> 00:07:49.670 cost increase because the company is forced to 00:07:49.670 --> 00:07:52.310 shift its entire business focus, just chasing 00:07:52.310 --> 00:07:54.629 those high value premium sales to stay solvent. 00:07:54.730 --> 00:07:56.490 That's it. Their volume business disappeared 00:07:56.490 --> 00:07:58.970 and the domestic conventional product just became 00:07:58.970 --> 00:08:00.990 collateral damage in the price hike scramble. 00:08:01.129 --> 00:08:03.430 Okay. So here's where I get a bit skeptical because 00:08:03.430 --> 00:08:05.129 this is where the industry spin machine usually 00:08:05.129 --> 00:08:08.170 kicks into high gear, right? Always is. If you 00:08:08.170 --> 00:08:10.439 look at the official numbers, the ones put out 00:08:10.439 --> 00:08:12.379 by the National Association of Animal Breeders, 00:08:12.379 --> 00:08:15.720 the NAAB data. It says total U .S. bovine semen 00:08:15.720 --> 00:08:19.420 sales actually grew 4%, hit nearly 69 million 00:08:19.420 --> 00:08:24.339 units, and dairy exports, up 5 % in volume, reaching 00:08:24.339 --> 00:08:27.360 30 .8 million units, with a record reported value 00:08:27.360 --> 00:08:31.019 of $326 million. Right. Record value. So if sales 00:08:31.019 --> 00:08:33.519 volume is technically up and the export value 00:08:33.519 --> 00:08:36.360 is at a record high, Why should we trust this 00:08:36.360 --> 00:08:38.580 source telling us the entire financial model 00:08:38.580 --> 00:08:41.340 is crumbling? Isn't this just, you know, temporary 00:08:41.340 --> 00:08:43.299 pricing optimization or something? That's the 00:08:43.299 --> 00:08:45.279 myth buster moment we really need to tackle head 00:08:45.279 --> 00:08:47.879 on. It's a fair question. The contradiction is 00:08:47.879 --> 00:08:50.399 the difference between volume loss and value 00:08:50.399 --> 00:08:53.299 inflation. Think about it. If a company used 00:08:53.299 --> 00:08:56.820 to sell, say, 5 million doses of $8 semen to 00:08:56.820 --> 00:08:59.399 Eastern Europe, and now they sell maybe 1 million 00:08:59.399 --> 00:09:03.440 doses of $40 sex semen domestically, their revenue 00:09:03.440 --> 00:09:06.220 value might hold steady. It might even rise slightly, 00:09:06.399 --> 00:09:08.899 just like the NAAB data suggests. Ah, I see. 00:09:08.919 --> 00:09:11.340 So the total dollars look okay. Right. But the 00:09:11.340 --> 00:09:13.700 underlying market dynamic has fundamentally failed. 00:09:13.820 --> 00:09:15.700 They've lost the stability, they've lost that 00:09:15.700 --> 00:09:18.700 massive volume base, and they've lost the efficient 00:09:18.700 --> 00:09:21.289 utilization of their genetics inventory. It's 00:09:21.289 --> 00:09:23.850 a much riskier, less stable position. So that 00:09:23.850 --> 00:09:29.409 record $326 million export value, it isn't actually 00:09:29.409 --> 00:09:32.090 a sign of market health at all. Not really. It's 00:09:32.090 --> 00:09:34.710 more a sign that the remaining export marketplaces 00:09:34.710 --> 00:09:36.990 like Western Europe, where competition is incredibly 00:09:36.990 --> 00:09:39.809 fierce, is being charged maximum premium. Or? 00:09:39.909 --> 00:09:42.830 Or that high -value genetics, the expensive stuff, 00:09:43.090 --> 00:09:45.710 are being prioritized aggressively over just 00:09:45.710 --> 00:09:48.269 shipping low -cost commodity volume. They have 00:09:48.269 --> 00:09:50.669 to chase the dollars now, not the units. Gotcha. 00:09:50.789 --> 00:09:53.289 They are scrambling. Make no mistake. Companies 00:09:53.289 --> 00:09:55.990 are frantically trying to replace that Eastern 00:09:55.990 --> 00:09:58.289 European volume. They're pushing hard into Western 00:09:58.289 --> 00:10:01.009 Europe, Central Asia, the Middle East. basically 00:10:01.009 --> 00:10:03.309 anywhere they might find new customers. But those 00:10:03.309 --> 00:10:04.970 aren't the same kind of markets, are they? No. 00:10:05.090 --> 00:10:07.789 These are highly competitive, really fragmented 00:10:07.789 --> 00:10:10.549 markets. It's nothing like the mass volume, almost 00:10:10.549 --> 00:10:13.629 guaranteed bulk sales they lost. It's a far more 00:10:13.629 --> 00:10:16.509 expensive, much more labor -intensive way to 00:10:16.509 --> 00:10:18.750 generate revenue. The crucial connection then 00:10:18.750 --> 00:10:21.590 is this shift, this forced shift to the premium 00:10:21.590 --> 00:10:24.019 chase domestically. That's the link. The loss 00:10:24.019 --> 00:10:27.980 of stable, high -volume standard semen exports 00:10:27.980 --> 00:10:32.279 forces genetics companies to maximize every single 00:10:32.279 --> 00:10:34.940 domestic sale just to maintain profitability. 00:10:35.360 --> 00:10:37.919 And that's precisely why we see the specific, 00:10:38.080 --> 00:10:41.220 almost astronomical surge in the expensive products. 00:10:41.480 --> 00:10:44.340 They have to sell these highly valuable straws 00:10:44.340 --> 00:10:46.639 to make up for the hundreds of thousands, maybe 00:10:46.639 --> 00:10:49.100 millions of low -cost straws they're no longer 00:10:49.100 --> 00:10:50.940 shipping abroad. And the data backs that up. 00:10:50.980 --> 00:10:53.399 Oh yeah, the data's clear. Gender -selected dairy 00:10:53.399 --> 00:10:57.320 semen jump 18 % to 9 .9 million units. That's 00:10:57.320 --> 00:11:00.340 a huge leap. 18%. And beef on dairy, you know, 00:11:00.379 --> 00:11:03.000 the ultimate optimization product, hit 7 .9 million 00:11:03.000 --> 00:11:05.200 units, also a big jump. Okay, and here's the 00:11:05.200 --> 00:11:06.879 kicker. Here's what they're not telling you. 00:11:06.940 --> 00:11:10.179 That surge in demand for sexed semen and beef 00:11:10.179 --> 00:11:12.440 on dairy. Yeah. It isn't just because farmers 00:11:12.440 --> 00:11:15.019 suddenly got religion on better planning or love 00:11:15.019 --> 00:11:17.320 the idea of dual -purpose genetics. No, there's 00:11:17.320 --> 00:11:20.450 a much bigger force at play. It is a direct defensive 00:11:20.450 --> 00:11:24.250 response to the absolutely astronomical increase 00:11:24.250 --> 00:11:27.129 in replacement costs we are seeing. You use premium 00:11:27.129 --> 00:11:29.629 genetics not because you want to spend $50 a 00:11:29.629 --> 00:11:32.769 straw, but because you absolutely cannot afford 00:11:32.769 --> 00:11:36.409 the mistake of breeding a $4 ,000 heifer with 00:11:36.409 --> 00:11:39.009 a conventional straw anymore. The risk is too 00:11:39.009 --> 00:11:41.470 damn high. Let's quantify that financial shock 00:11:41.470 --> 00:11:44.399 then. Starting with the primary cost driver replacement 00:11:44.399 --> 00:11:46.919 value. I mean, I remember the days when a heifer 00:11:46.919 --> 00:11:49.759 was maybe $1 ,000. Oh, yeah. I remember those 00:11:49.759 --> 00:11:52.360 days fondly. The July USDA average for dairy 00:11:52.360 --> 00:11:56.120 replacements was a staggering $3 ,010 per head. 00:11:56.259 --> 00:11:58.840 The $3 ,000. That is the new reality. That defines 00:11:58.840 --> 00:12:01.000 every single breeding decision we make now. It 00:12:01.000 --> 00:12:02.600 really does. And just to put that in perspective 00:12:02.600 --> 00:12:04.080 for producers who've been in the game a while. 00:12:04.179 --> 00:12:07.080 Yeah. Back in April 2019, just six years ago. 00:12:07.500 --> 00:12:10.840 That same replacement heifer cost $1 ,140. Wow. 00:12:11.220 --> 00:12:13.480 We are nearly triple the cost in just six years. 00:12:13.580 --> 00:12:15.480 This isn't just, you know, normal inflation. 00:12:15.539 --> 00:12:17.720 This is a structural revaluation of the asset 00:12:17.720 --> 00:12:20.240 itself. And those are just the national averages, 00:12:20.360 --> 00:12:23.659 remember. If we drill down into specific high 00:12:23.659 --> 00:12:26.879 -end data, auction reports from places like California 00:12:26.879 --> 00:12:29.879 and Minnesota back in August, they show quality 00:12:29.879 --> 00:12:33.120 heifers bringing over $4 ,000. $4 ,000. Four 00:12:33.120 --> 00:12:35.700 grand for an animal that hasn't given you a single 00:12:35.700 --> 00:12:38.570 drop of milk yet. Right. This means every single 00:12:38.570 --> 00:12:41.169 straw you use, every technician decision, every 00:12:41.169 --> 00:12:44.629 conception attempt, it counts now in a way it 00:12:44.629 --> 00:12:46.570 never did before. Because a breeding mistake 00:12:46.570 --> 00:12:49.350 isn't just an inconvenience anymore. No, it's 00:12:49.350 --> 00:12:52.570 economically catastrophic. A misstep costs thousands. 00:12:52.970 --> 00:12:55.350 Exactly. And the genetics companies, they absolutely 00:12:55.350 --> 00:12:57.850 know this, which is why we're seeing those corresponding 00:12:57.850 --> 00:13:00.350 semen price hikes. Makes sense. They see the 00:13:00.350 --> 00:13:02.230 value of a successful pregnancy has gone way 00:13:02.230 --> 00:13:04.990 up. Precisely. Industry reports are suggesting 00:13:04.990 --> 00:13:07.509 that premium Holstein semen, the stuff that was 00:13:07.509 --> 00:13:10.769 reliably in the mid -30s to mid -40s maybe 18 00:13:10.769 --> 00:13:14.450 months ago, now consistently in the upper 40s 00:13:14.450 --> 00:13:17.230 to low 50s, that's a minimum 20 % jump on your 00:13:17.230 --> 00:13:19.370 base premium product right there. 20 % minimum. 00:13:19.549 --> 00:13:21.750 And what's fascinating here is the really top 00:13:21.750 --> 00:13:24.990 genomic bulls. The source reports prices climbing 00:13:24.990 --> 00:13:28.980 up to $60. even $75 per dose in some markets. 00:13:29.159 --> 00:13:32.879 75 bucks a straw. $75. And those prices are sticking. 00:13:33.000 --> 00:13:35.299 People are paying it because the alternative, 00:13:35.460 --> 00:13:38.240 not getting that pregnancy or getting a low value 00:13:38.240 --> 00:13:40.639 calf is even more expensive now. And then you 00:13:40.639 --> 00:13:42.840 add the sex semen premium on top of that. Right. 00:13:42.940 --> 00:13:45.799 Generally another $15 to $20 per dose on top 00:13:45.799 --> 00:13:47.980 of the bull's price. So you're talking about 00:13:47.980 --> 00:13:50.279 input costs that are now demanding an extremely 00:13:50.279 --> 00:13:53.100 rapid and frankly, very high return on investment. 00:13:53.600 --> 00:13:55.980 Let's run the math again on that $12 ,000 annual 00:13:55.980 --> 00:14:01.120 impact. For a 500 -cow operation, say, 30 % replacement 00:14:01.120 --> 00:14:04.220 rate, needing roughly 1 ,500 breeding doses a 00:14:04.220 --> 00:14:06.820 year. Okay. If you just shift your mix maybe 00:14:06.820 --> 00:14:10.240 10 % more toward those $75 straws, and your conventional 00:14:10.240 --> 00:14:14.350 dose jumps from, say, $15 to $20. Seems plausible. 00:14:14.570 --> 00:14:17.269 Very plausible. That $12 ,000 annual cost jump 00:14:17.269 --> 00:14:19.850 becomes entirely believable. We are talking about 00:14:19.850 --> 00:14:21.789 serious cash flow hemorrhaging from the farm, 00:14:21.870 --> 00:14:24.169 simply because the global market shifted away 00:14:24.169 --> 00:14:27.169 from selling cheap straws overseas. Yeah. It 00:14:27.169 --> 00:14:29.129 connects directly. And this brings us right back 00:14:29.129 --> 00:14:31.570 to the market structure itself. We are simultaneously 00:14:31.570 --> 00:14:34.789 seeing these consolidation attempts, most notably 00:14:34.789 --> 00:14:38.710 that intent for select sires and STGEN to combine. 00:14:38.970 --> 00:14:41.070 Right. The merger. If that actually goes through, 00:14:41.110 --> 00:14:43.269 we're looking at significantly reduced competition, 00:14:43.549 --> 00:14:47.309 especially in that proprietary sext semen technology 00:14:47.309 --> 00:14:50.690 space where STGEN is strong. And less competition 00:14:50.690 --> 00:14:53.759 in a high demand, high cost environment. That 00:14:53.759 --> 00:14:56.279 usually means only one thing for pricing, doesn't 00:14:56.279 --> 00:14:58.639 it? It generally only points one way. Prices 00:14:58.639 --> 00:15:00.700 will likely continue to trend upwards almost 00:15:00.700 --> 00:15:02.899 regardless of the company's internal volume issues 00:15:02.899 --> 00:15:05.919 or cost structures. Less choice equals higher 00:15:05.919 --> 00:15:08.580 prices. Okay, so given this market pressure, 00:15:08.740 --> 00:15:12.259 this impending price shock, analyzing the strategies 00:15:12.259 --> 00:15:14.700 of the major players becomes absolutely critical, 00:15:14.860 --> 00:15:17.019 doesn't it? It really does. Farmers are essentially 00:15:17.019 --> 00:15:19.899 betting their future operation on their supplier's 00:15:19.899 --> 00:15:21.899 stability right now. That's a great way to put 00:15:21.899 --> 00:15:24.580 it. It's a bet. Let's start with Select Sires 00:15:24.580 --> 00:15:26.720 and Estigen, because they're clearly making a 00:15:26.720 --> 00:15:28.960 big move to gain leverage in this volatile market. 00:15:29.220 --> 00:15:31.879 Their announced intent to combine back in August 00:15:31.879 --> 00:15:36.120 2023, it's a survival move. Absolutely. It's 00:15:36.120 --> 00:15:38.679 clearly intended to merge Estigen's proprietary 00:15:38.679 --> 00:15:41.720 sext semen technology. Which is generally seen 00:15:41.720 --> 00:15:43.659 as pretty top tier, right? Yeah, specifically 00:15:43.659 --> 00:15:46.440 their superior flow sorting accuracy and the 00:15:46.440 --> 00:15:49.279 proprietary buffer systems they developed. Really 00:15:49.279 --> 00:15:52.980 good tech. Merge that with Select's massive distribution 00:15:52.980 --> 00:15:56.539 network and their huge bull inventory. So Select 00:15:56.539 --> 00:15:58.659 needed the tech. And Estesian needed the volume, 00:15:58.879 --> 00:16:01.139 the reach, and maybe the financial stability 00:16:01.139 --> 00:16:03.840 Select offers. It's a symbiotic move on paper. 00:16:04.100 --> 00:16:05.820 Wait a second, though. If Estesian technology 00:16:05.820 --> 00:16:08.980 is so superior and they really specialized in 00:16:08.980 --> 00:16:11.580 innovation, why are they seeking the merger? 00:16:11.759 --> 00:16:13.919 Aren't they perfectly positioned for this? premium 00:16:13.919 --> 00:16:16.120 chase the market is now demanding? You'd think 00:16:16.120 --> 00:16:18.039 so, wouldn't you? And they are to an extent. 00:16:18.139 --> 00:16:20.700 But innovation is incredibly expensive. R &D 00:16:20.700 --> 00:16:24.559 costs a fortune. And distribution requires massive 00:16:24.559 --> 00:16:27.759 infrastructure. In a rapidly contracting, uncertain 00:16:27.759 --> 00:16:30.080 market, just having the best tech isn't always 00:16:30.080 --> 00:16:32.500 enough. You need that massive, stable infrastructure 00:16:32.500 --> 00:16:35.399 to actually monetize it globally and efficiently. 00:16:35.620 --> 00:16:38.379 So even with good tech, scale matters. Scale 00:16:38.379 --> 00:16:41.679 and stability matter hugely right now. So while 00:16:41.679 --> 00:16:44.039 they currently maintain independent sales networks, 00:16:44.360 --> 00:16:46.899 the potential combination offers production and 00:16:46.899 --> 00:16:49.700 R &D efficiencies critical to cutting overhead. 00:16:50.100 --> 00:16:52.799 But, and this is a big but, the status of the 00:16:52.799 --> 00:16:55.779 regulatory approvals is still really unclear, 00:16:55.940 --> 00:16:58.220 and that uncertainty just hangs over the entire 00:16:58.220 --> 00:17:01.019 market, signaling instability across the board. 00:17:01.200 --> 00:17:04.059 Nobody knows quite how that will shake out. Okay, 00:17:04.119 --> 00:17:07.019 so that's select tridentugin. Then you have altigenetics. 00:17:07.549 --> 00:17:10.630 Owned by URUS, their strategy seemed centered 00:17:10.630 --> 00:17:13.269 on a big international focus, right? Building 00:17:13.269 --> 00:17:16.329 huge logistical networks abroad. That was definitely 00:17:16.329 --> 00:17:18.430 their play. Significant investment overseas. 00:17:18.890 --> 00:17:21.269 And how's that working out now? Well, that strategy 00:17:21.269 --> 00:17:23.470 is now proving incredibly challenging. That huge 00:17:23.470 --> 00:17:26.029 reliance on often volatile international markets 00:17:26.029 --> 00:17:28.730 has hit severe turbulence with the loss of Eastern 00:17:28.730 --> 00:17:30.509 Europe. Because they built the infrastructure 00:17:30.509 --> 00:17:32.759 for volume that isn't there anymore. Exactly. 00:17:32.759 --> 00:17:36.039 You build a massive, complex, global infrastructure 00:17:36.039 --> 00:17:39.200 designed to support high volume when suddenly 00:17:39.200 --> 00:17:42.579 64 % of a key part of that volume just vanishes. 00:17:42.740 --> 00:17:45.640 That infrastructure immediately becomes way too 00:17:45.640 --> 00:17:48.240 expensive to maintain. The overhead is crushing. 00:17:48.880 --> 00:17:50.799 And are we seeing the fallout here domestically? 00:17:50.859 --> 00:17:53.460 We absolutely are. I'm hearing consistent reports, 00:17:53.680 --> 00:17:55.720 particularly from producers in the Midwest, that 00:17:55.720 --> 00:17:58.059 Alta service territories are already being restructured, 00:17:58.160 --> 00:18:01.400 combined, or that long -term reps are suddenly 00:18:01.400 --> 00:18:04.559 gone. Wow. When a company starts cutting or can't 00:18:04.559 --> 00:18:07.240 maintain its core field service network, especially 00:18:07.240 --> 00:18:10.240 in stable dairy hubs, that is a serious canary 00:18:10.240 --> 00:18:12.319 in the coal mine for their operational stability 00:18:12.319 --> 00:18:14.640 and maybe their future investment plans. Okay, 00:18:14.700 --> 00:18:16.940 so that's Alta. What about ABS Global? They're 00:18:16.940 --> 00:18:19.359 owned by Genus Plank. Right. ABS. They've been 00:18:19.359 --> 00:18:21.640 aggressively pushing what they call an industrial 00:18:21.640 --> 00:18:24.660 genetics model, basically trying to treat dairy 00:18:24.660 --> 00:18:27.579 breeding more like their highly mechanized pig 00:18:27.579 --> 00:18:29.700 and poultry operations. Standardization, high 00:18:29.700 --> 00:18:32.660 volume, predictable results, that kind of thing. 00:18:32.740 --> 00:18:34.599 That's the goal. Standardization across vast 00:18:34.599 --> 00:18:37.039 numbers. But hang on. Isn't industrial efficiency 00:18:37.039 --> 00:18:40.180 exactly what dairy needs right now to try and 00:18:40.180 --> 00:18:42.829 cut these soaring costs? Why would the source 00:18:42.829 --> 00:18:45.329 suggest that model is inherently flawed for dairy? 00:18:45.509 --> 00:18:48.130 It's a good question. The problem is dairy doesn't 00:18:48.130 --> 00:18:51.029 really operate like a highly centralized, uniform 00:18:51.029 --> 00:18:54.589 poultry shed. No, definitely not. We manage individual 00:18:54.589 --> 00:18:57.000 cows, right? their specific health histories, 00:18:57.299 --> 00:18:59.279 their local environments, nutrition nuances. 00:18:59.720 --> 00:19:03.339 The industrial model, which thrives on uniformity, 00:19:03.380 --> 00:19:05.900 really struggles with the high variability reality 00:19:05.900 --> 00:19:08.640 of dairy farming. Okay, that makes sense. So 00:19:08.640 --> 00:19:11.099 when you pair that somewhat inflexible high volume 00:19:11.099 --> 00:19:14.259 structure with shrinking or destabilized markets, 00:19:14.339 --> 00:19:17.920 again, that operational overhead becomes unsustainable 00:19:17.920 --> 00:19:20.180 really quickly. And are there instability indicators 00:19:20.180 --> 00:19:24.480 for ABS2? Similar signals, yes. Just like Alta, 00:19:24.559 --> 00:19:27.000 we're seeing reports. Several California producers 00:19:27.000 --> 00:19:29.460 mentioned they're seeing fewer ABS reps on the 00:19:29.460 --> 00:19:32.220 ground lately. That suggests significant cost 00:19:32.220 --> 00:19:34.119 -cutting efforts, even in territories that require 00:19:34.119 --> 00:19:36.380 high service levels. It's another worrying sign. 00:19:36.619 --> 00:19:39.539 And finally, Cemex. They seem to be the quiet 00:19:39.539 --> 00:19:42.299 contender in all this turmoil. Yeah, Cemex. They've 00:19:42.299 --> 00:19:44.980 really continued to focus intently on their core 00:19:44.980 --> 00:19:48.019 established markets. Places like Canada, Brazil. 00:19:48.460 --> 00:19:50.799 Markets they know inside and out. And that's 00:19:50.799 --> 00:19:53.380 an advantage now. It seems to be. The advantage 00:19:53.380 --> 00:19:55.599 of focusing on core markets is stability and 00:19:55.599 --> 00:19:57.900 deep local knowledge. Instead of trying to be 00:19:57.900 --> 00:20:00.599 everywhere globally and then losing 64 % of your 00:20:00.599 --> 00:20:03.119 business overnight, they invest more heavily 00:20:03.119 --> 00:20:05.799 in localized R &D, they can offer better service 00:20:05.799 --> 00:20:08.480 continuity, and they largely avoided those really 00:20:08.480 --> 00:20:10.980 aggressive low -margin international pricing 00:20:10.980 --> 00:20:14.000 wars that are now coming back to bite their competitors. 00:20:14.440 --> 00:20:17.079 Sometimes, you know, avoiding global dominance 00:20:17.079 --> 00:20:19.680 actually pays off when the supply chain implodes. 00:20:19.779 --> 00:20:22.759 This whole instability mess. It really forces 00:20:22.759 --> 00:20:25.500 us to look forward, doesn't it? And ask, what 00:20:25.500 --> 00:20:27.579 did other regions figure out that maybe we missed? 00:20:27.779 --> 00:20:29.680 Especially when it comes to things like climate 00:20:29.680 --> 00:20:31.599 preparedness and resilience. Yeah, that's a big 00:20:31.599 --> 00:20:34.059 one. We've been so intensely focused on just 00:20:34.059 --> 00:20:36.339 maximizing those production records, chasing 00:20:36.339 --> 00:20:39.220 the highest TPI or NMA that maybe we missed building 00:20:39.220 --> 00:20:41.460 actual resilience into the herd for the conditions 00:20:41.460 --> 00:20:45.140 cows actually face. That is so true. We often 00:20:45.140 --> 00:20:47.420 feel like we're constantly reinventing the wheel 00:20:47.420 --> 00:20:49.579 here when it comes to managing heat stress, for 00:20:49.579 --> 00:20:51.769 example. Right. But if you actually look at the 00:20:51.769 --> 00:20:54.369 research, the Journal of Dairy Science has published 00:20:54.369 --> 00:20:57.430 fascinating studies for years on genetics used 00:20:57.430 --> 00:21:00.430 elsewhere, like Brazilian gear cattle. They maintain 00:21:00.430 --> 00:21:02.609 production under heat stress, where our traditional 00:21:02.609 --> 00:21:06.539 Holsteins just... Exactly. And what's even more 00:21:06.539 --> 00:21:08.559 encouraging or maybe frustrating, depending on 00:21:08.559 --> 00:21:10.259 how you look at it, is the proactive approach 00:21:10.259 --> 00:21:13.039 taken by Australia's data gene. What do they 00:21:13.039 --> 00:21:15.779 do? They saw climate change coming. Way back 00:21:15.779 --> 00:21:18.980 in 2017, they introduced genomic breeding values 00:21:18.980 --> 00:21:22.039 specifically for heat tolerance. They were building 00:21:22.039 --> 00:21:24.680 the solutions seven years ago. Seven years ago. 00:21:24.740 --> 00:21:27.069 Wow. while we were still just chasing milk pounds. 00:21:27.269 --> 00:21:29.349 Pretty much. The learning here is crucial, I 00:21:29.349 --> 00:21:31.569 think. While the U .S. genetics market was laser 00:21:31.569 --> 00:21:33.930 -focused on that next high -ranking production 00:21:33.930 --> 00:21:36.769 trait record bull, others were already developing 00:21:36.769 --> 00:21:39.470 practical solutions for real -world challenges 00:21:39.470 --> 00:21:42.210 like climate change. So this forced shift in 00:21:42.210 --> 00:21:44.990 the market, it means American farmers now have 00:21:44.990 --> 00:21:47.430 to prioritize genetics that build resilience, 00:21:47.609 --> 00:21:50.670 not just records. It's becoming non -negotiable. 00:21:50.789 --> 00:21:52.930 It has to be. We also need to recognize that 00:21:53.210 --> 00:21:55.210 This disruption, it's going to hit different 00:21:55.210 --> 00:21:58.109 regions unevenly. How so? Well, for regions with 00:21:58.109 --> 00:22:00.549 really established, dense genetics infrastructure, 00:22:00.930 --> 00:22:03.750 think Wisconsin, California, Pennsylvania service 00:22:03.750 --> 00:22:06.869 will probably remain decent, maybe more expensive, 00:22:06.910 --> 00:22:08.750 but decent. Because the companies just can't 00:22:08.750 --> 00:22:11.190 afford to abandon those major stable dairy hubs. 00:22:11.349 --> 00:22:13.910 Exactly. Those are their anchor points. But if 00:22:13.910 --> 00:22:16.410 you're in one of the expansion areas. Or maybe 00:22:16.410 --> 00:22:18.670 more remote locations, especially where service 00:22:18.670 --> 00:22:20.890 might have been a bit marginal even before this 00:22:20.890 --> 00:22:22.890 market shift. Yeah, if that's you listening, 00:22:23.089 --> 00:22:25.250 you need to brace yourself. Prepare for service 00:22:25.250 --> 00:22:28.049 cuts immediately. Because... Changes like ALTA 00:22:28.049 --> 00:22:31.029 restructuring their territories or fewer ABS 00:22:31.029 --> 00:22:34.269 reps being seen, those kinds of cuts show up 00:22:34.269 --> 00:22:36.849 in those more vulnerable, higher cost of service 00:22:36.849 --> 00:22:39.349 territories first. Always. If your service has 00:22:39.349 --> 00:22:41.329 always been kind of marginal, waiting around 00:22:41.329 --> 00:22:44.289 for a plan B now is probably a recipe for disaster. 00:22:44.609 --> 00:22:46.890 You need to be proactive. Is there any silver 00:22:46.890 --> 00:22:48.809 lining in this regional picture? There might 00:22:48.809 --> 00:22:51.109 be, actually, particularly for Southern Operations. 00:22:51.950 --> 00:22:54.349 Texas, Florida, you know, the area is really 00:22:54.349 --> 00:22:57.190 grappling with severe heat stress day in, day 00:22:57.190 --> 00:22:59.950 out. Okay. The source reports increased interest 00:22:59.950 --> 00:23:02.349 already in adapted genetics from producers down 00:23:02.349 --> 00:23:05.089 there. This massive market disruption, ironically, 00:23:05.089 --> 00:23:08.490 might finally accelerate the necessary heat tolerance 00:23:08.490 --> 00:23:11.150 research and the wider availability of adapted 00:23:11.150 --> 00:23:14.569 genetics like Duracrosses or heat -tolerant Holsteins 00:23:14.569 --> 00:23:16.849 that these producers have desperately needed 00:23:16.849 --> 00:23:19.630 for years. The market pressure might finally 00:23:19.630 --> 00:23:21.789 force the change. We've kind of hit on this a 00:23:21.789 --> 00:23:23.650 few times already, but let's just state it clearly 00:23:23.650 --> 00:23:26.069 as a contrarian take. You know, the kind of analysis 00:23:26.069 --> 00:23:28.309 you expect from the bullvine. Let's do it. Everyone 00:23:28.309 --> 00:23:30.349 in the industry narrative, all the official channels, 00:23:30.450 --> 00:23:32.029 they're telling us sales are up, everything is 00:23:32.029 --> 00:23:36.569 fine. Right. Pointing to that record, $326 million 00:23:36.569 --> 00:23:40.589 XCert value. That's the headline they push. But 00:23:40.589 --> 00:23:43.150 what if the exact opposite is true? We really 00:23:43.150 --> 00:23:45.369 shouldn't trust a narrative based purely on revenue 00:23:45.369 --> 00:23:47.549 value when the underlying market dynamics are 00:23:47.549 --> 00:23:50.170 clearly crumbling due to massive volume loss. 00:23:50.750 --> 00:23:53.430 Right. That record value is entirely being paid 00:23:53.430 --> 00:23:55.769 for by you, the U .S. farmer, through higher 00:23:55.769 --> 00:23:59.190 domestic prices and maybe a few remaining high 00:23:59.190 --> 00:24:01.970 -end export customers paying top dollar for premium 00:24:01.970 --> 00:24:05.500 products. It's not sustained by stable, broad, 00:24:05.640 --> 00:24:08.059 high volume export markets like it used to be. 00:24:08.180 --> 00:24:11.119 That foundation is gone. Absolutely. And this 00:24:11.119 --> 00:24:14.259 shift, it's forcing a massive strategic realignment 00:24:14.259 --> 00:24:16.880 among the suppliers. The source we analyze actually 00:24:16.880 --> 00:24:19.039 suggests that due to the structural pressures, 00:24:19.180 --> 00:24:22.119 the lost volume, the cost increases, the potential 00:24:22.119 --> 00:24:25.259 consolidation, maybe three major suppliers might 00:24:25.259 --> 00:24:27.740 not even exist in their current form by 2026. 00:24:28.039 --> 00:24:31.180 Three might not exist. Wow. That's a bold statement. 00:24:31.519 --> 00:24:33.660 It is. But it highlights the stakes. This isn't 00:24:33.660 --> 00:24:35.960 just about price anymore. Farmers are being forced 00:24:35.960 --> 00:24:38.480 to make a huge bet on supplier stability. Because 00:24:38.480 --> 00:24:40.039 your breeding program, that's a three to five 00:24:40.039 --> 00:24:42.660 year commitment easily. At least. So you absolutely 00:24:42.660 --> 00:24:46.099 have to choose which company seems structurally 00:24:46.099 --> 00:24:48.319 sound enough, meaning maybe lower international 00:24:48.319 --> 00:24:51.519 exposure, strong proprietary tech, demonstrated 00:24:51.519 --> 00:24:53.720 domestic service stability to bet your entire 00:24:53.720 --> 00:24:57.019 operations future on. It's a big decision. And 00:24:57.019 --> 00:25:00.079 the disruption itself. It's kind of encouraging 00:25:00.079 --> 00:25:02.519 a necessary reduction in dependence, isn't it? 00:25:02.539 --> 00:25:05.500 If your rep is suddenly unstable or maybe just 00:25:05.500 --> 00:25:08.700 gone, you have no choice but to bring that capability 00:25:08.700 --> 00:25:11.559 in -house. It's the strongest argument yet. This 00:25:11.559 --> 00:25:14.059 market instability is probably the biggest driver 00:25:14.059 --> 00:25:16.059 we've seen for investing in farm capability. 00:25:16.480 --> 00:25:19.160 Precisely. The 90 -day plan we're about to detail 00:25:19.160 --> 00:25:22.480 really emphasizes evaluating things like automated 00:25:22.480 --> 00:25:25.559 heat detection systems, systems that have a proven 00:25:25.559 --> 00:25:29.009 18 to 24 -month ROI in many cases. Because you 00:25:29.009 --> 00:25:31.289 have to build that on -farm breeding capability, 00:25:31.569 --> 00:25:34.630 both to reduce reliance on external service that 00:25:34.630 --> 00:25:37.009 might disappear, and also to address these mounting 00:25:37.009 --> 00:25:39.289 labor issues at the same time. You just cannot 00:25:39.289 --> 00:25:41.269 afford to sit around and wait for the rep who 00:25:41.269 --> 00:25:43.309 might not show up next month anymore. That era 00:25:43.309 --> 00:25:45.809 is ending. All right, let's make this really 00:25:45.809 --> 00:25:47.950 practical. Let's assume the farmer just finished 00:25:47.950 --> 00:25:49.390 morning milking. Maybe they're driving to the 00:25:49.390 --> 00:25:51.230 feed store right now, cup of coffee in hand. 00:25:51.529 --> 00:25:54.950 They need immediate practical steps. What are 00:25:54.950 --> 00:25:56.950 the three crucial things they need to take away 00:25:56.950 --> 00:25:59.960 from this discussion? Let's break it down. Immediate, 00:25:59.960 --> 00:26:03.240 midterm, long term. Okay, let's do it. Your first 00:26:03.240 --> 00:26:06.779 action, like this week, has got to be proactive 00:26:06.779 --> 00:26:09.980 due diligence. You need to know your supplier 00:26:09.980 --> 00:26:12.519 better than they know themselves right now. Go 00:26:12.519 --> 00:26:15.640 beyond the glossy brochure. Way beyond. Look 00:26:15.640 --> 00:26:18.920 past the slick marketing. Evaluate their structural 00:26:18.920 --> 00:26:21.460 stability. What's their real financial position 00:26:21.460 --> 00:26:23.099 look like? What's their technology position? 00:26:24.349 --> 00:26:26.289 Are they just distributing someone else's tech 00:26:26.289 --> 00:26:28.549 or do they actually own proprietary technology 00:26:28.549 --> 00:26:31.289 like STGEN does with sexing? And critically, 00:26:31.509 --> 00:26:34.349 assess their international exposure and their 00:26:34.349 --> 00:26:36.849 market focus. Because as we've discussed, that 00:26:36.849 --> 00:26:39.829 instability overseas translates directly to instability 00:26:39.829 --> 00:26:43.329 in your breeding program here. Who are they relying 00:26:43.329 --> 00:26:45.710 on? And then absolutely, weeks one and two must 00:26:45.710 --> 00:26:47.970 involve finding your tribe. Get on the phone, 00:26:48.089 --> 00:26:49.930 contact your neighbors now, talk about forming 00:26:49.930 --> 00:26:52.329 buying groups, explore state dairy association 00:26:52.329 --> 00:26:55.009 programs for bulk purchasing leverage. This is 00:26:55.009 --> 00:26:57.309 so critical right now because volume is truly 00:26:57.309 --> 00:26:59.549 the only way you're going to regain any pricing 00:26:59.549 --> 00:27:01.690 power in this market. Are we seeing this work 00:27:01.690 --> 00:27:04.740 already? We are seeing real concrete results. 00:27:05.140 --> 00:27:08.019 Reports from Wisconsin show producers pooling 00:27:08.019 --> 00:27:11.220 orders like 10 ,000 dose orders are already locking 00:27:11.220 --> 00:27:14.599 in 15 percent discounts. 15 percent. That's significant. 00:27:14.900 --> 00:27:18.000 It's huge because they are creating the volume 00:27:18.000 --> 00:27:20.579 domestically that the genetics companies have 00:27:20.579 --> 00:27:23.220 so desperately lost abroad. You have to band 00:27:23.220 --> 00:27:25.579 together and create that volume internally to 00:27:25.579 --> 00:27:28.599 regain leverage. Don't go it alone. OK, so once 00:27:28.599 --> 00:27:30.180 you've done your homework and know who you might 00:27:30.180 --> 00:27:32.759 be able to trust long term. You need a solid 00:27:32.759 --> 00:27:35.339 financial strategy. That's the medium term strategy 00:27:35.339 --> 00:27:38.039 covering the next, say, three to six months. 00:27:38.180 --> 00:27:40.819 It starts with doing the math properly. Know 00:27:40.819 --> 00:27:43.740 your true costs. Exactly. Calculate your true 00:27:43.740 --> 00:27:46.359 breeding costs. You absolutely must factor in 00:27:46.359 --> 00:27:49.359 that $3 ,010 plus replacement cost for heifers 00:27:49.359 --> 00:27:51.819 when you're trying to calculate the ROI of using 00:27:51.819 --> 00:27:55.339 a $75 straw versus a $20 straw. The cost of not 00:27:55.339 --> 00:27:57.880 getting a good pregnancy has skyrocketed. It 00:27:57.880 --> 00:28:00.859 really has. Use those advanced ROI calculators. 00:28:01.259 --> 00:28:03.339 Good ones are available through places like Penn 00:28:03.339 --> 00:28:06.619 State Extension or Wisconsin Extension. Run different 00:28:06.619 --> 00:28:09.059 scenario analyses for pricing levels, for different 00:28:09.059 --> 00:28:11.380 adoption rates of sex semen or beef on dairy. 00:28:11.579 --> 00:28:14.019 Know your numbers cold. And once you've done 00:28:14.019 --> 00:28:16.720 that math, maybe around month two, it's time 00:28:16.720 --> 00:28:19.220 to think about locking it down. But, and this 00:28:19.220 --> 00:28:23.650 is critical. Lock it down carefully. I see. Negotiate. 00:28:23.650 --> 00:28:27.410 Try for 18 to 36 month contracts. Right now, 00:28:27.450 --> 00:28:29.410 companies are likely desperate for cash flow 00:28:29.410 --> 00:28:31.369 and need those guaranteed commitment dollars 00:28:31.369 --> 00:28:34.410 to offset their own market uncertainty. You might 00:28:34.410 --> 00:28:36.160 have some leverage there. But be careful who 00:28:36.160 --> 00:28:38.279 you log in with. That's the crucial cautionary 00:28:38.279 --> 00:28:41.200 note. Do not just prioritize the lowest sticker 00:28:41.200 --> 00:28:44.119 price per straw. You absolutely must prioritize 00:28:44.119 --> 00:28:47.480 verifiable supplier stability and access to proprietary 00:28:47.480 --> 00:28:50.279 technology, especially in sex semen over saving 00:28:50.279 --> 00:28:52.440 a few pennies today. Because you need a partner 00:28:52.440 --> 00:28:55.000 that will still actually be there in 2026 to 00:28:55.000 --> 00:28:57.920 fulfill that contract. Precisely. A contract 00:28:57.920 --> 00:29:00.240 with a company that vanishes in 18 months is 00:29:00.240 --> 00:29:02.980 completely worthless, no matter how cheap the 00:29:02.980 --> 00:29:04.779 straws were supposed to be. Stability first. 00:29:05.259 --> 00:29:07.980 price second right now. All right. So looking 00:29:07.980 --> 00:29:10.519 longer term now, you're positioning over the 00:29:10.519 --> 00:29:13.579 next year or two. This really centers on building 00:29:13.579 --> 00:29:15.720 resilience and reducing that external dependence 00:29:15.720 --> 00:29:17.859 we talked about. It has to. You've got to tech 00:29:17.859 --> 00:29:21.400 up. Seriously evaluate. where it makes sense, 00:29:21.519 --> 00:29:24.759 invest in automated heat detection systems, activity 00:29:24.759 --> 00:29:26.759 monitors, rumination monitors, whatever fits 00:29:26.759 --> 00:29:29.259 your system. Why now specifically? Because it 00:29:29.259 --> 00:29:31.440 improves breeding efficiency. It cuts down labor 00:29:31.440 --> 00:29:34.180 hours spent just watching cows. And maybe most 00:29:34.180 --> 00:29:37.380 importantly right now, it dramatically reduces 00:29:37.380 --> 00:29:40.359 your dependence on external service reps whose 00:29:40.359 --> 00:29:43.019 stability is frankly questionable in some cases. 00:29:43.119 --> 00:29:45.480 And the ROI is there. The numbers suggest an 00:29:45.480 --> 00:29:48.240 18 to 24 -month ROI on many of these systems 00:29:48.240 --> 00:29:50.599 is achievable, especially when you factor in 00:29:50.599 --> 00:29:53.059 current high labor costs and the potential cost 00:29:53.059 --> 00:29:55.039 of missed heats or unstable service networks. 00:29:55.319 --> 00:29:58.279 It's becoming a necessary investment. And finally, 00:29:58.380 --> 00:30:01.180 for our Southern Operations listening, this is 00:30:01.180 --> 00:30:04.450 absolutely the time to actively commit. to adapted 00:30:04.450 --> 00:30:07.589 genetics move beyond just holsteins look beyond 00:30:07.589 --> 00:30:09.829 just traditional holsteins if heat stress is 00:30:09.829 --> 00:30:12.369 hammering your performance investigate cross 00:30:12.369 --> 00:30:14.990 breeding options dig into the heat tolerance 00:30:14.990 --> 00:30:17.049 research coming out of places like the journal 00:30:17.049 --> 00:30:20.170 of dairy science talk to suppliers about bulls 00:30:20.170 --> 00:30:23.180 specifically selected for heat tolerance even 00:30:23.180 --> 00:30:25.279 if their production proofs aren't chart toppers. 00:30:25.460 --> 00:30:27.980 You have to actively position your herd for resilience 00:30:27.980 --> 00:30:30.500 against these climate challenges now, before 00:30:30.500 --> 00:30:32.839 this global market disruption hits your production 00:30:32.839 --> 00:30:35.740 line and your bottom line even harder through 00:30:35.740 --> 00:30:38.079 lost pregnancies and lower efficiency. Couldn't 00:30:38.079 --> 00:30:40.259 agree more. Proactive resilience is the name 00:30:40.259 --> 00:30:42.980 of the game long term. Hashtag tag Enhanced Show 00:30:42.980 --> 00:30:44.799 Outro. Well, this has been another deep dive 00:30:44.799 --> 00:30:47.000 from the Bullvine podcast. It's pretty clear 00:30:47.000 --> 00:30:49.279 the genetics market we've all known just shifted. 00:30:49.880 --> 00:30:53.069 Fundamentally. driven by these huge global forces 00:30:53.069 --> 00:30:56.150 and painful domestic cost pressures. It really 00:30:56.150 --> 00:30:58.950 has shifted. And those who recognize this shift 00:30:58.950 --> 00:31:01.829 now, the ones taking action in these next 90 00:31:01.829 --> 00:31:04.589 days, finding those buying groups, locking in 00:31:04.589 --> 00:31:08.170 stable technology -backed contracts, they're 00:31:08.170 --> 00:31:10.309 the ones who will secure a necessary competitive 00:31:10.309 --> 00:31:13.910 advantage moving forward. If this kind of impartial, 00:31:13.930 --> 00:31:16.769 data -driven analysis helps your operation make 00:31:16.769 --> 00:31:20.430 better decisions, head over to www .thebullvine 00:31:20.430 --> 00:31:22.930 .com. We've got more articles there that really 00:31:22.930 --> 00:31:24.990 tell you what's actually happening in the dairy 00:31:24.990 --> 00:31:27.269 industry beyond the headlines. And seriously, 00:31:27.410 --> 00:31:30.069 subscribe wherever you get your podcasts. We're 00:31:30.069 --> 00:31:32.130 releasing these deep dives twice weekly now. 00:31:32.230 --> 00:31:34.269 And trust me, you really don't want to miss what 00:31:34.269 --> 00:31:36.450 we've got coming next week. We're digging into 00:31:36.450 --> 00:31:40.170 the true cost analysis of feed additives. You 00:31:40.170 --> 00:31:41.529 know, the ones that are supposed to save you 00:31:41.529 --> 00:31:43.890 money. But often fail to deliver on the promise 00:31:43.890 --> 00:31:46.269 of their ROI. Yeah, that'll be a good one. It 00:31:46.269 --> 00:31:48.269 should be revealing. Okay, one final thought 00:31:48.269 --> 00:31:50.329 to leave you with. Remember this. Your breeding 00:31:50.329 --> 00:31:52.869 decisions made in these next few months, they 00:31:52.869 --> 00:31:55.740 matter more than they ever have before. It's 00:31:55.740 --> 00:31:58.019 about not just which bulls you pick, but fundamentally, 00:31:58.220 --> 00:32:00.740 which companies you are betting your farm's future 00:32:00.740 --> 00:32:03.579 on. Use the resources available to you. Your 00:32:03.579 --> 00:32:05.700 state extension dairy specialists, for example, 00:32:05.839 --> 00:32:08.619 they often offer free strategy consultations. 00:32:08.680 --> 00:32:11.359 Use them before you sign those long -term contracts. 00:32:11.660 --> 00:32:14.700 Good advice. Use them, stay informed, and we'll 00:32:14.700 --> 00:32:16.980 talk again soon. There you have it. The $100 00:32:16.980 --> 00:32:19.819 million genetics disruption that's about to hit 00:32:19.819 --> 00:32:22.500 your farm, whether you're ready or not. Look. 00:32:22.940 --> 00:32:25.319 I've been in this industry for 30 years, and 00:32:25.319 --> 00:32:28.059 I've seen a lot of changes. But this one's different. 00:32:28.359 --> 00:32:31.319 This isn't just another market cycle. It's a 00:32:31.319 --> 00:32:34.160 fundamental reshuffling of how genetics get developed, 00:32:34.380 --> 00:32:38.380 priced, and delivered. The producers, who recognize 00:32:38.380 --> 00:32:40.779 what's happening and take action in the next 00:32:40.779 --> 00:32:44.380 90 days, they're going to look back at this moment 00:32:44.380 --> 00:32:47.079 as when they secured a competitive advantage. 00:32:47.680 --> 00:32:50.259 Those waiting for things to go back to normal 00:32:50.839 --> 00:32:53.460 Well, they'll be paying premium prices to fewer 00:32:53.460 --> 00:32:56.539 suppliers. Your breeding decisions over the next 00:32:56.539 --> 00:33:00.160 few months matter more than usual. Not just which 00:33:00.160 --> 00:33:02.359 bulls you're using, but which companies you're 00:33:02.359 --> 00:33:05.420 betting your future on. Head over to thebullvine 00:33:05.420 --> 00:33:08.460 .com for the complete analysis, including our 00:33:08.460 --> 00:33:11.559 90 -day action plan and that company risk matrix 00:33:11.559 --> 00:33:14.539 everyone's going to be talking about. You'll 00:33:14.539 --> 00:33:17.059 also find links to all the data sources we discussed 00:33:17.059 --> 00:33:20.549 today. And hey, If this episode opened your eyes 00:33:20.549 --> 00:33:23.269 to something you hadn't considered, do us a favor, 00:33:23.410 --> 00:33:26.230 share it with another producer who needs to hear 00:33:26.230 --> 00:33:29.309 this. The industry works better when we're all 00:33:29.309 --> 00:33:32.849 informed. Until next time, this is the Bullvine 00:33:32.849 --> 00:33:35.930 Podcast. Keep asking the tough questions and 00:33:35.930 --> 00:33:38.309 don't let anyone tell you that's just how things 00:33:38.309 --> 00:33:42.069 are. You deserve better answers. Thanks for listening. 00:33:48.880 --> 00:33:49.880 Thank you.