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 --> 00:01:03.200 we're sparking Welcome back to the Bullvine Podcast. 00:01:03.479 --> 00:01:08.560 It's our big 2025 year in review deep dive. We 00:01:08.560 --> 00:01:10.799 are peeling back the layers on the data, the 00:01:10.799 --> 00:01:13.379 disruptive decisions, and honestly, some of the 00:01:13.379 --> 00:01:15.920 absolute disasters that define this year in the 00:01:15.920 --> 00:01:19.000 dairy world. This is all about identifying who 00:01:19.000 --> 00:01:22.079 survived and, well, who became a statistic. And 00:01:22.079 --> 00:01:24.439 we're not pulling any punches today. We are breaking 00:01:24.439 --> 00:01:26.659 down the critical stories that separated the 00:01:26.659 --> 00:01:31.000 survivors from the statistics in 2025. And a 00:01:31.000 --> 00:01:33.700 fair warning, if you found 2025 to be a struggle, 00:01:33.859 --> 00:01:36.700 some of this analysis on structural failures 00:01:36.700 --> 00:01:38.819 and delayed consequences consequences, is going 00:01:38.819 --> 00:01:40.780 to be uncomfortable listening. It has to be. 00:01:41.019 --> 00:01:43.599 We have to look at the huge celebratory wins, 00:01:43.819 --> 00:01:45.560 the immediate cash flows, and then immediately 00:01:45.560 --> 00:01:48.519 pivot to the quiet structural issues that are 00:01:48.519 --> 00:01:50.980 going to cost producers dearly in 2026 and beyond. 00:01:51.159 --> 00:01:53.200 And we have to start right there with the anchor 00:01:53.200 --> 00:01:55.700 statistic that should frankly be echoing in every 00:01:55.700 --> 00:01:57.620 single barn in North America. Hit us with it. 00:01:57.760 --> 00:02:00.000 The high -end estimate is that Holstein inbreeding 00:02:00.000 --> 00:02:03.099 has already cost U .S. dairies a colossal $6 00:02:03.099 --> 00:02:09.879 .7 billion. 6 .7. This isn't a theory about margin 00:02:09.879 --> 00:02:13.539 fluctuation. This is a measurable financial hit. 00:02:13.699 --> 00:02:16.039 This is money that was left on the table because 00:02:16.039 --> 00:02:19.520 of breeding decisions or failures to make crucial 00:02:19.520 --> 00:02:23.300 decisions that started years ago. That is the 00:02:23.300 --> 00:02:25.919 core problem that nobody seems to be paying enough 00:02:25.919 --> 00:02:29.400 strategic attention to right now. Right. Especially 00:02:29.400 --> 00:02:32.479 because the entire year of 2025 was dominated 00:02:32.479 --> 00:02:35.639 by this incredible tension. On one hand, you 00:02:35.639 --> 00:02:38.240 had this massive, almost universal celebration 00:02:38.240 --> 00:02:41.740 of immediate verified cash flow from beef on 00:02:41.740 --> 00:02:43.939 dairy premiums. It was the financial lifeline 00:02:43.939 --> 00:02:45.819 of the year for so many operations. You got that 00:02:45.819 --> 00:02:48.900 $800, maybe $1 ,000 for a crossbred calf on day 00:02:48.900 --> 00:02:51.360 three. Immediate cash. Immediate cash, zero rearing 00:02:51.360 --> 00:02:54.259 costs, minimal death loss risk on the farm. That 00:02:54.259 --> 00:02:56.539 felt like a huge strategic win for short -term 00:02:56.539 --> 00:02:58.840 survival. It absolutely was a win. But while 00:02:58.840 --> 00:03:01.099 everyone was busy counting those $1 ,000 checks, 00:03:01.379 --> 00:03:03.419 something insidious was happening in the background, 00:03:03.560 --> 00:03:06.050 quiet. eating away at future profitability. You 00:03:06.050 --> 00:03:09.849 look at the USDA data from November 2025. Replacement 00:03:09.849 --> 00:03:13.610 heifer costs quietly hit a national average of 00:03:13.610 --> 00:03:17.090 $2 ,870 per head. And that's just the average. 00:03:17.310 --> 00:03:19.750 If you're running a large operation in high demand 00:03:19.750 --> 00:03:22.889 areas like California or Texas or certain pockets 00:03:22.889 --> 00:03:26.129 of the Midwest, you are regularly exceeding $3 00:03:26.129 --> 00:03:29.159 ,200. Oh, easily. You are literally watching 00:03:29.159 --> 00:03:32.659 the industry celebrate a $1 ,000 gain today while 00:03:32.659 --> 00:03:35.800 simultaneously signing up for a $3 ,000 liability 00:03:35.800 --> 00:03:38.280 in the next two years. It's the classic failure 00:03:38.280 --> 00:03:41.340 of vision. You fix today's cash problem by trading 00:03:41.340 --> 00:03:44.120 away tomorrow's equity. Yep. And while this was 00:03:44.120 --> 00:03:46.479 happening, the industry spent the entire year 00:03:46.479 --> 00:03:49.580 debating TPI rankings. Which bull was up? Which 00:03:49.580 --> 00:03:52.259 bull was down? But the underlying genetic foundation 00:03:52.259 --> 00:03:56.009 was decaying. At an accelerating rate. Inbreeding 00:03:56.009 --> 00:03:59.930 has jumped 168 % since 2010. That's not a gradual 00:03:59.930 --> 00:04:02.389 slope. That's a structural cliff we are accelerating 00:04:02.389 --> 00:04:05.830 toward. And the $6 .7 billion figure is the price 00:04:05.830 --> 00:04:08.610 tag of that decay. So if you were one of the 00:04:08.610 --> 00:04:11.349 survivors this year, the one who navigated the 00:04:11.349 --> 00:04:13.889 feed price volatility and the unpredictable milk 00:04:13.889 --> 00:04:16.670 checks, you weren't just lucky, you were strategic, 00:04:17.069 --> 00:04:20.009 often making decisions contrary to the prevailing 00:04:20.009 --> 00:04:22.490 hype cycle. And that's why this deep dive matters. 00:04:22.629 --> 00:04:24.870 We need to define that strategy for you. Our 00:04:24.870 --> 00:04:27.670 mission today is to distill the playbook of those 00:04:27.670 --> 00:04:30.949 survivors. We've synthesized our 16 most read 00:04:30.949 --> 00:04:33.089 articles from The Bullvine this year, and they 00:04:33.089 --> 00:04:35.449 coalesce into three critical threads that define 00:04:35.449 --> 00:04:39.889 2025 and must inform your 2026 plans. Okay, let's 00:04:39.889 --> 00:04:41.490 hear them. First, we're looking at the architects, 00:04:41.769 --> 00:04:44.370 the people who redefine success, often by challenging 00:04:44.370 --> 00:04:47.750 industry orthodoxy. Second, we'll analyze the 00:04:47.750 --> 00:04:49.810 bloodline's legendary genetics that survived 00:04:49.810 --> 00:04:52.689 and outlasted the evaluation systems that once 00:04:52.689 --> 00:04:55.029 dismissed them. Good stuff. And finally, we're 00:04:55.029 --> 00:04:57.250 hitting the battlefield, the relentless market 00:04:57.250 --> 00:05:00.209 forces like beef on dairy and industry consolidation 00:05:00.209 --> 00:05:03.410 that are demanding an immediate calculated response 00:05:03.410 --> 00:05:05.709 from every producer. Okay, let's unpack this. 00:05:05.750 --> 00:05:07.930 The architects, the winners. Right, let's get 00:05:07.930 --> 00:05:11.000 into it. The winners in 2025 weren't necessarily 00:05:11.000 --> 00:05:13.120 the ones who simply bought the highest -ranked 00:05:13.120 --> 00:05:16.180 genomic sires. The true survivors built unique, 00:05:16.259 --> 00:05:19.040 disciplined systems. They fundamentally challenged 00:05:19.040 --> 00:05:21.500 the assumption that you have to chase TPI to 00:05:21.500 --> 00:05:23.879 succeed. And it's crucial we look at the scale 00:05:23.879 --> 00:05:26.600 of these successes immediately. That tells you 00:05:26.600 --> 00:05:28.699 whether the lesson is replicable for your 500 00:05:28.699 --> 00:05:31.600 cow dairy, or if it's just a fascinating profile 00:05:31.600 --> 00:05:34.519 piece about people operating in a different universe 00:05:34.519 --> 00:05:37.480 entirely. A perfect place to start then is with 00:05:37.480 --> 00:05:40.639 Juan Moreno and ST Genetics. This is a story 00:05:40.639 --> 00:05:43.379 about fundamental infrastructure change. Moreno 00:05:43.379 --> 00:05:46.259 didn't just found a successful company. He fundamentally 00:05:46.259 --> 00:05:49.220 rewired the global plumbing of dairy genetics. 00:05:49.699 --> 00:05:52.339 We're talking about an operation with 1 ,800 00:05:52.339 --> 00:05:55.300 employees spanning 16 countries. The scale is 00:05:55.300 --> 00:05:58.399 huge. And the impact is staggering. ST Genetics 00:05:58.399 --> 00:06:01.120 pioneered sex -sorted technology that is now 00:06:01.120 --> 00:06:03.819 responsible for roughly 30 % of all semen sold 00:06:03.819 --> 00:06:06.540 globally. 30 %? Think about what that number 00:06:06.540 --> 00:06:09.060 implies. That means ST genetics has become the 00:06:09.060 --> 00:06:11.839 air supply for a third of the world's dairy breeding 00:06:11.839 --> 00:06:14.579 programs. When you control a technology like 00:06:14.579 --> 00:06:17.639 that, you dramatically reduce the genetic waste 00:06:17.639 --> 00:06:20.660 in the industry, forcing producers to be more 00:06:20.660 --> 00:06:22.379 efficient with their breeding decisions because 00:06:22.379 --> 00:06:24.879 they know precisely what they're getting. That's 00:06:24.879 --> 00:06:27.360 market power. What I found most fascinating, 00:06:27.519 --> 00:06:30.100 given their technological dominance, was Moreno's 00:06:30.100 --> 00:06:32.899 disciplined restraint regarding genetic modification. 00:06:33.319 --> 00:06:36.819 He drew a hard line, stating, and I quote, If 00:06:36.819 --> 00:06:38.319 they don't want to go any further with genetic 00:06:38.319 --> 00:06:40.920 modification, why on earth would we get involved 00:06:40.920 --> 00:06:43.480 with it as an industry? We're playing with fire 00:06:43.480 --> 00:06:46.769 by doing that. That's interesting. So he's prioritizing 00:06:46.769 --> 00:06:50.269 commercial viability and farmer trust over chasing, 00:06:50.290 --> 00:06:52.370 you know, maximum hype or scientific headlines. 00:06:52.629 --> 00:06:55.209 Precisely. He was named World Dairy Expo's 2025 00:06:55.209 --> 00:06:57.949 International Person of the Year because he delivered 00:06:57.949 --> 00:07:00.250 products that work, not just products that generate 00:07:00.250 --> 00:07:02.730 academic curiosity. That discipline restraint 00:07:02.730 --> 00:07:05.269 is a huge lesson. It's about building a sustainable 00:07:05.269 --> 00:07:08.689 business on proven results, not on theoretical 00:07:08.689 --> 00:07:11.910 future technologies. Now let's pivot from technology 00:07:11.910 --> 00:07:14.589 dominance to scale dominance with the McCarty 00:07:14.589 --> 00:07:17.970 family, who were named the 2025 Dairy Producer 00:07:17.970 --> 00:07:21.170 of the Year. This is the definition of scaling 00:07:21.170 --> 00:07:23.490 success beyond traditional farming models. Oh 00:07:23.490 --> 00:07:26.170 yeah, their numbers are just staggering. They 00:07:26.170 --> 00:07:29.529 run 15 ,000 cows across four Kansas sites, plus 00:07:29.529 --> 00:07:33.910 another 4 ,000 at MVP Dairy in Ohio, which, for 00:07:33.910 --> 00:07:36.189 context, is the largest registered Holstein herd 00:07:36.189 --> 00:07:39.139 globally. The scale is astronomical. But as you 00:07:39.139 --> 00:07:41.060 said, the cow count isn't the winning factor. 00:07:41.139 --> 00:07:43.220 Not at all. The winning factor is the partnership 00:07:43.220 --> 00:07:46.040 with Danone. They aren't just shipping milk to 00:07:46.040 --> 00:07:48.579 a co -op. They control what happens to that milk 00:07:48.579 --> 00:07:51.399 afterward. They are vertically integrated from 00:07:51.399 --> 00:07:54.139 feed to fermentation. Vertical integration is 00:07:54.139 --> 00:07:56.240 the architecture of survival in the modern market. 00:07:56.379 --> 00:07:58.680 And the McCourty's are the proof point. It allows 00:07:58.680 --> 00:08:01.540 them to manage milk. price volatility, control 00:08:01.540 --> 00:08:03.899 quality from the ground up, and essentially operate 00:08:03.899 --> 00:08:06.500 outside the crush of the volatile commodity market 00:08:06.500 --> 00:08:08.899 that destroys margins for most conventional producers. 00:08:09.259 --> 00:08:10.680 Wait, hold up. This is where I have to step in 00:08:10.680 --> 00:08:13.360 with the 300 cow farmers perspective. Go for 00:08:13.360 --> 00:08:15.800 it. The McCarty model requires resources and 00:08:15.800 --> 00:08:19.170 access most farms will never have. We're talking 00:08:19.170 --> 00:08:22.670 about needing Danone's direct line and the capital 00:08:22.670 --> 00:08:26.149 for $50 million worth of processing and logistics 00:08:26.149 --> 00:08:29.230 infrastructure. Of course. So is this genuinely 00:08:29.230 --> 00:08:32.090 a lesson we can apply? Or is it just watching 00:08:32.090 --> 00:08:34.169 the Yankees win the World Series and hoping their 00:08:34.169 --> 00:08:37.250 playbook helps your local softball team? That's 00:08:37.250 --> 00:08:39.350 the critical distinction, and we have to be clear. 00:08:39.450 --> 00:08:41.490 The lesson isn't replication, it's recognition. 00:08:41.870 --> 00:08:44.129 Okay. The McCartys are showing you that controlling 00:08:44.129 --> 00:08:47.070 the value chain is winning. If you can't replicate 00:08:47.070 --> 00:08:49.990 it at 15 ,000 cows, you need to understand the 00:08:49.990 --> 00:08:52.350 principles and apply them at your scale. So how 00:08:52.350 --> 00:08:54.929 does that principle translate to the guy running 00:08:54.929 --> 00:08:57.990 300 cows who's worried about his bank manager? 00:08:58.269 --> 00:09:01.090 The small farm playbook is collaboration or niche 00:09:01.090 --> 00:09:03.690 positioning. If you can't own the processing 00:09:03.690 --> 00:09:06.070 plant, you have to find a co -op or group of 00:09:06.070 --> 00:09:08.990 farms that pools resources to negotiate specialized 00:09:08.990 --> 00:09:11.850 contracts. You need to control more of the value 00:09:11.850 --> 00:09:14.129 beyond the bulk tank, whether that's guaranteed 00:09:14.129 --> 00:09:16.850 component pricing or securing a contract for 00:09:16.850 --> 00:09:20.429 specialized milk like A2A2 or organic. That collective 00:09:20.429 --> 00:09:23.409 value control is the small -scale version of 00:09:23.409 --> 00:09:26.970 vertical integration. That idea of collaboration 00:09:26.970 --> 00:09:29.669 being a structural solution leads us perfectly 00:09:29.669 --> 00:09:33.120 to the Genesaur story. It does. If the McCartys 00:09:33.120 --> 00:09:35.960 are the outlier success story, Genesaurus is 00:09:35.960 --> 00:09:38.639 the accessible success story. Absolutely. Genesaurus 00:09:38.639 --> 00:09:40.700 is the ultimate countermodel to consolidation. 00:09:41.139 --> 00:09:44.059 We talked about eight Iowa farming families who 00:09:44.059 --> 00:09:46.419 pooled resources and knowledge back in 2014. 00:09:46.820 --> 00:09:49.460 They didn't have Danone backing. They had a shared 00:09:49.460 --> 00:09:51.399 goal and a collective investment in high -end 00:09:51.399 --> 00:09:53.399 genetics. And the result was Genesaurus Captain. 00:09:53.679 --> 00:09:55.659 I mean, you have to talk about why his success 00:09:55.659 --> 00:09:57.840 was so unprecedented. Genesaurus Captain was 00:09:57.840 --> 00:10:00.200 unbelievable because he held the number one TPI 00:10:00.200 --> 00:10:03.090 for... seven consecutive proof runs. Let's just 00:10:03.090 --> 00:10:05.330 pause on that. Seven consecutive proof runs. 00:10:05.850 --> 00:10:08.970 In the genomic era where genetic turnover is 00:10:08.970 --> 00:10:11.990 so rapid that the top bull today is often obsolete 00:10:11.990 --> 00:10:14.590 by tomorrow, achieving that kind of consistency 00:10:14.590 --> 00:10:18.990 is almost unheard of. He peaked at plus 3 ,441 00:10:18.990 --> 00:10:22.690 TPI. That longevity proves two things. First, 00:10:22.870 --> 00:10:25.350 that their initial genomic evaluation was incredibly 00:10:25.350 --> 00:10:28.570 accurate. And second, that there were deep functional 00:10:28.570 --> 00:10:31.210 traits ensuring he didn't crash once his daughters 00:10:31.210 --> 00:10:34.029 actually started milking. The key scalable lesson 00:10:34.029 --> 00:10:36.950 for the 300 -cow farmer is right there. Collective 00:10:36.950 --> 00:10:38.950 investment produces results that none of those 00:10:38.950 --> 00:10:40.629 individual breeders could have achieved alone. 00:10:41.289 --> 00:10:44.769 In an era where AI companies dominate, Collaboration 00:10:44.769 --> 00:10:47.590 is not weakness. It is the accessible survival 00:10:47.590 --> 00:10:49.809 architecture. And speaking of challenging the 00:10:49.809 --> 00:10:52.169 orthodoxy, let's bring in David Diamond in AG3 00:10:52.169 --> 00:10:54.590 because his philosophy ties directly into the 00:10:54.590 --> 00:10:57.580 dangers of the genomic hype cycle. Right. Diamond's 00:10:57.580 --> 00:10:59.659 model, while large, is built on a philosophy 00:10:59.659 --> 00:11:03.480 of consistency over unpredictability. He actively 00:11:03.480 --> 00:11:07.179 invests in cow families with proven, multi -generational 00:11:07.179 --> 00:11:10.399 longevity and functional purpose. He's deliberately 00:11:10.399 --> 00:11:12.659 avoiding the animals that rank highest purely 00:11:12.659 --> 00:11:15.240 on paper but lack maternal history. He's the 00:11:15.240 --> 00:11:17.019 one betting on the cow, not the algorithm. And 00:11:17.019 --> 00:11:20.139 his quote resonates deeply with the $6 .7 billion 00:11:20.139 --> 00:11:24.370 cost of inbreeding. Genomics without performance 00:11:24.370 --> 00:11:27.549 verification is speculation compounded by more 00:11:27.549 --> 00:11:30.610 speculation. He's arguing that we get so caught 00:11:30.610 --> 00:11:33.309 up in the predictive power of a TPI number on 00:11:33.309 --> 00:11:35.789 a newborn calf that we forget the crucial check. 00:11:36.029 --> 00:11:38.649 Does the lineage actually produce cows that last 00:11:38.649 --> 00:11:41.009 through six lactations and handle stress? That's 00:11:41.009 --> 00:11:43.370 the part that gets me. We use genomics to find 00:11:43.370 --> 00:11:45.389 new blood, which is fantastic. But the speed 00:11:45.389 --> 00:11:47.570 and high rankings encourage us to overuse those 00:11:47.570 --> 00:11:49.909 elite bloodlines, which inevitably leads to that 00:11:49.909 --> 00:11:51.850 massive inbreeding spike you detailed earlier. 00:11:52.269 --> 00:11:54.830 Diamond is forcing himself to maintain maternal 00:11:54.830 --> 00:11:57.269 line diversity as insurance. The practical takeaway 00:11:57.269 --> 00:11:59.909 here is that the most profitable long -term herds 00:11:59.909 --> 00:12:03.610 blend both strategies. Use genomics for direction, 00:12:03.889 --> 00:12:06.470 finding the right new low -inbreeding blood to 00:12:06.470 --> 00:12:09.769 infuse, but maintain maternal line depth, verifying 00:12:09.769 --> 00:12:13.149 those cows actually perform. Don't put your entire 00:12:13.149 --> 00:12:15.629 herd's future on paper numbers from an animal 00:12:15.629 --> 00:12:17.940 that is still being raised in a hutch. Okay, 00:12:18.000 --> 00:12:20.200 so let's flip that coin. We've talked about the 00:12:20.200 --> 00:12:22.759 winners. What about the failures? Right, segment 00:12:22.759 --> 00:12:26.559 two. We need to look at the failures that taught 00:12:26.559 --> 00:12:29.419 us more than the soaring successes. This is all 00:12:29.419 --> 00:12:32.080 about when ego beats judgment and how historical 00:12:32.080 --> 00:12:34.399 financial speculation is repeating itself today. 00:12:34.620 --> 00:12:37.019 You can't talk about genetic speculation in the 00:12:37.019 --> 00:12:38.679 U .S. without talking about the Jack Stuckey 00:12:38.679 --> 00:12:41.299 saga. No, you can't. That collapse still serves 00:12:41.299 --> 00:12:43.059 as the gold standard for how not to run a dairy 00:12:43.059 --> 00:12:45.539 business. The Stuckey Empire was built on quicksand. 00:12:45.580 --> 00:12:47.620 It was constructed not on productive fundamentals, 00:12:47.919 --> 00:12:50.240 not on high milk checks or efficient feed conversion, 00:12:50.460 --> 00:12:54.519 but on financial maneuvering, speculation, and 00:12:54.519 --> 00:12:57.700 crucial tax incentives. We're specifically talking 00:12:57.700 --> 00:13:00.519 about the massive influence of Section 46. For 00:13:00.519 --> 00:13:02.019 listeners who might not be familiar with that 00:13:02.019 --> 00:13:05.200 history, what exactly was Section 46 and why 00:13:05.200 --> 00:13:08.529 did it matter so much? Section 46 was a tax provision, 00:13:08.690 --> 00:13:10.909 part of the investment tax credit back then, 00:13:11.029 --> 00:13:13.669 which allowed for rapid, sometimes immediate 00:13:13.669 --> 00:13:17.789 depreciation of capital assets. When the IRS 00:13:17.789 --> 00:13:20.909 designated high value registered cattle as capital 00:13:20.909 --> 00:13:24.750 assets, it created the investor era in dairy 00:13:24.750 --> 00:13:28.110 cattle breeding. So suddenly these high end registered 00:13:28.110 --> 00:13:30.409 cattle weren't just milk machines. They were 00:13:30.409 --> 00:13:33.110 massive tax shelters for high net worth individuals, 00:13:33.330 --> 00:13:36.480 doctors, lawyers, Wall Street guys. who needed 00:13:36.480 --> 00:13:39.100 huge write -offs. Precisely. It fundamentally 00:13:39.100 --> 00:13:42.000 decoupled the paper value of a cow from her actual 00:13:42.000 --> 00:13:44.279 productive value in the barn. Investors were 00:13:44.279 --> 00:13:46.340 incentivized to buy the most expensive animal 00:13:46.340 --> 00:13:48.720 possible based purely on a pedigree and hype 00:13:48.720 --> 00:13:50.899 because the tax savings were immediate. Corruption 00:13:50.899 --> 00:13:53.000 was secondary. Completely. When the tax incentives 00:13:53.000 --> 00:13:55.620 dried up and the financial reality hit, the entire 00:13:55.620 --> 00:13:58.740 speculative house of cards collapsed spectacularly, 00:13:58.759 --> 00:14:01.080 leaving creditors, neighbors, and many honest 00:14:01.080 --> 00:14:03.480 breeders bankrupt. And the ultimate lesson there, 00:14:03.539 --> 00:14:05.600 which is ignored every generation, is that business 00:14:05.600 --> 00:14:08.639 models built solely on speculation always fail. 00:14:08.980 --> 00:14:12.120 You cannot sustain a productive farming enterprise 00:14:12.120 --> 00:14:15.460 on short -term financial maneuvering. The deep 00:14:15.460 --> 00:14:17.639 irony, which we'll cover in a moment, is that 00:14:17.639 --> 00:14:19.879 the genetics often outlimit the financial folly. 00:14:20.039 --> 00:14:23.399 The Stuckey -Elm Park, Black Rose cow family 00:14:23.399 --> 00:14:26.039 survived the bankruptcy. The genetics were sound. 00:14:26.120 --> 00:14:28.220 The business model was rotten to the core. But 00:14:28.220 --> 00:14:31.019 the tragedy for 2025 is that the Stuckey mentality 00:14:31.679 --> 00:14:34.899 The belief that paper value and hype can replace 00:14:34.899 --> 00:14:37.960 actual productive performance is still rampant. 00:14:38.039 --> 00:14:40.580 It is. We saw multiple verified reports this 00:14:40.580 --> 00:14:42.740 year about genomic heifers selling for figures 00:14:42.740 --> 00:14:44.399 we haven't seen since the height of the investor 00:14:44.399 --> 00:14:46.840 era, easily reaching and sometimes exceeding 00:14:46.840 --> 00:14:49.980 six figures. $100 ,000 or more. For a calf. Yeah. 00:14:50.039 --> 00:14:52.779 And what were these sales based on? High GTPI 00:14:52.779 --> 00:14:55.259 genomic total performance index and a high net 00:14:55.259 --> 00:14:58.000 merit score. Purely paper numbers, often from 00:14:58.000 --> 00:15:00.179 an animal just a few weeks old. They had absolutely 00:15:00.179 --> 00:15:03.279 zero milking records, no longevity data, no production 00:15:03.279 --> 00:15:05.740 verification. The farmer is buying a high -tech 00:15:05.740 --> 00:15:07.779 lottery ticket. And what's your gut reaction 00:15:07.779 --> 00:15:10.360 when you see these sales happening today? Honestly, 00:15:10.600 --> 00:15:13.379 it's disbelief mixed with frustration. We are 00:15:13.379 --> 00:15:16.399 still doing this. The Stuckey collapse was based 00:15:16.399 --> 00:15:18.840 on gambling on paper pedigrees and tax write 00:15:18.840 --> 00:15:21.460 -offs. Today, we're gambling on algorithms and 00:15:21.460 --> 00:15:24.200 tax write -offs. The specific technological packaging 00:15:24.200 --> 00:15:27.059 changed, but the speculative psychology is identical. 00:15:27.340 --> 00:15:29.679 That's exactly our conclusion in the bullvine 00:15:29.679 --> 00:15:33.000 analysis. The packaging changed. The gamble didn't. 00:15:33.000 --> 00:15:35.759 The influence of the investor era and the Section 00:15:35.759 --> 00:15:38.980 46 mentality is still driving decision -making, 00:15:39.200 --> 00:15:41.620 encouraging some breeders to prioritize paper 00:15:41.620 --> 00:15:43.960 hype and the potential for a quick six -figure 00:15:43.960 --> 00:15:46.360 flip over the functional, durable cow families 00:15:46.360 --> 00:15:49.200 that keep the milk checks coming for years. And 00:15:49.200 --> 00:15:50.980 the risk isn't just that the calf buyer loses 00:15:50.980 --> 00:15:54.149 money. The risk is that the attention, the capital, 00:15:54.269 --> 00:15:56.830 and the genetic focus shift away from the functional 00:15:56.830 --> 00:15:58.769 animals that actually pay the bills, further 00:15:58.769 --> 00:16:01.409 accelerating that trend toward genetic uniformity 00:16:01.409 --> 00:16:04.250 and inbreeding. That brings us perfectly to segment 00:16:04.250 --> 00:16:07.309 three, genetics that outlasted everything. Ah, 00:16:07.429 --> 00:16:10.139 the matriarchs. The matriarch's cows who were 00:16:10.139 --> 00:16:12.480 often dismissed by consensus because they didn't 00:16:12.480 --> 00:16:14.879 meet the current scorecard, but whose dynasties 00:16:14.879 --> 00:16:18.100 defied multiple evaluation systems. This is the 00:16:18.100 --> 00:16:20.740 ultimate lesson in trusting your eye over the 00:16:20.740 --> 00:16:23.240 room's opinion. This is truly the heart of dairy 00:16:23.240 --> 00:16:25.940 breeding. This proves that sometimes the collective 00:16:25.940 --> 00:16:28.879 wisdom of the room is just flat out wrong. And 00:16:28.879 --> 00:16:31.179 the only thing that matters is the genetic power 00:16:31.179 --> 00:16:33.639 packed into that animal. The ultimate example 00:16:33.639 --> 00:16:37.490 is Westwood HC Rudy Missy. We covered her $8 00:16:37.490 --> 00:16:41.129 ,100 phone call back in 2003. Just think about 00:16:41.129 --> 00:16:44.370 the professional failure here. A sales ring full 00:16:44.370 --> 00:16:46.789 of professional cattle people experts who dedicated 00:16:46.789 --> 00:16:49.590 their lives to this walked away from her. And 00:16:49.590 --> 00:16:53.169 why? The consensus reason for dismissal. An unbalanced 00:16:53.169 --> 00:16:55.929 rump. An unbalanced rump. If you applied that 00:16:55.929 --> 00:16:58.789 level of scrutiny to most cows today, half the 00:16:58.789 --> 00:17:00.830 barns in America would be empty. That is how 00:17:00.830 --> 00:17:03.539 narrow the focus was back then. Matt Steiner 00:17:03.539 --> 00:17:05.619 made the contrarian bet. He didn't even see the 00:17:05.619 --> 00:17:07.500 cow in person. He bought her by phone for $8 00:17:07.500 --> 00:17:11.359 ,100. Just incredible. That seemingly small, 00:17:11.619 --> 00:17:14.299 slightly flawed purchase produced Seagull Bay 00:17:14.299 --> 00:17:18.299 Super Sire and Mountfield SSI DC Mogul. That 00:17:18.299 --> 00:17:21.299 lineage not only led to the 2014 Global Cow of 00:17:21.299 --> 00:17:24.019 the Year, but generated hundreds of millions 00:17:24.019 --> 00:17:26.539 in global semen sale. Hundreds of millions of 00:17:26.539 --> 00:17:29.240 dollars, all from a cow rejected for a minor 00:17:29.240 --> 00:17:32.519 physical imperfection. The lesson for every breeder 00:17:32.519 --> 00:17:35.819 sitting on the fence is this. How many missies 00:17:35.819 --> 00:17:37.960 are culled every year because they don't quite 00:17:37.960 --> 00:17:40.700 fit the rigid conventional scorecard? Exactly. 00:17:40.720 --> 00:17:43.279 Because their udder angle is five degrees off 00:17:43.279 --> 00:17:45.660 or their frame isn't exactly the type the judges 00:17:45.660 --> 00:17:48.480 want, Steiner demonstrated the necessity of independent 00:17:48.480 --> 00:17:51.380 judgment. And the story of Stooky Elm Park Black 00:17:51.380 --> 00:17:53.759 Rose is even more dramatic because she was literally 00:17:53.759 --> 00:17:55.859 salvaged from that financial wreckage we just 00:17:55.859 --> 00:17:57.500 discussed. She was purchased during the fire 00:17:57.500 --> 00:17:59.869 sale, right? Yes. Black Rose was a distressed 00:17:59.869 --> 00:18:02.250 sale heifer purchased by Louis Prange during 00:18:02.250 --> 00:18:04.549 the absolute height of Jack Stuckey's catastrophic 00:18:04.549 --> 00:18:08.990 financial collapse. She cost a measly $4 ,500. 00:18:09.670 --> 00:18:11.890 Imagine the scene creditors milling about, the 00:18:11.890 --> 00:18:14.390 urgency, the chaos, and someone having the clarity 00:18:14.390 --> 00:18:16.450 to spot the genetics in the middle of a business 00:18:16.450 --> 00:18:19.009 crisis. She became the foundation of a massive 00:18:19.009 --> 00:18:21.509 red and white dynasty, producing modern show 00:18:21.509 --> 00:18:24.130 winners like Lady Rose Caught Your Eye. That 00:18:24.130 --> 00:18:27.410 $4 ,500 purchase, made in the middle of an institutional 00:18:27.410 --> 00:18:30.690 collapse, yielded generational wealth. That is 00:18:30.690 --> 00:18:32.970 the ultimate second -chance story. It proves 00:18:32.970 --> 00:18:35.490 that sometimes the best genetics need a crisis 00:18:35.490 --> 00:18:38.089 to reveal their true value. They need someone 00:18:38.089 --> 00:18:40.130 paying attention when everyone else is focused 00:18:40.130 --> 00:18:43.309 on the financial panic. The genetic quality endures, 00:18:43.309 --> 00:18:46.869 even when the business model around it is disintegrating. 00:18:46.950 --> 00:18:49.750 Then you have comma star Lori Sheik. Her legacy 00:18:49.750 --> 00:18:52.490 isn't about being safe from disaster, but about 00:18:52.490 --> 00:18:55.589 sheer, unstoppable durability across multiple 00:18:55.589 --> 00:18:58.369 eras. She built an empire that produced four 00:18:58.369 --> 00:19:01.009 different millionaire bulls. Four. A staggering 00:19:01.009 --> 00:19:03.470 number that speaks to a level of consistent functional 00:19:03.470 --> 00:19:06.390 transmission rarely seen. And the timeline is 00:19:06.390 --> 00:19:09.210 the key proof point. Descendants of Laurie Sheik 00:19:09.210 --> 00:19:11.509 were still winning Holstein Canada's Cow of the 00:19:11.509 --> 00:19:14.430 Year Award 27 years after she herself won the 00:19:14.430 --> 00:19:18.539 inaugural honor back in 1995. 27 years. That 00:19:18.539 --> 00:19:21.160 kind of generational consistency is not luck. 00:19:21.380 --> 00:19:24.740 It transcends fluctuating indices, changing breed 00:19:24.740 --> 00:19:27.619 preferences, and the entire shift from traditional 00:19:27.619 --> 00:19:31.019 linear scoring to genomics. That is intentional 00:19:31.019 --> 00:19:34.220 breeding focused on deep functional traits. You 00:19:34.220 --> 00:19:37.220 know, fertility, productive life, components 00:19:37.220 --> 00:19:40.210 that ensure a cow lasts. And we must briefly 00:19:40.210 --> 00:19:42.630 mention the two sires who define this genetic 00:19:42.630 --> 00:19:45.569 tension. Pawnee Farm, our Linda chief from the 00:19:45.569 --> 00:19:47.970 60s and 70s, who created those massive production 00:19:47.970 --> 00:19:51.690 gains by contributing nearly 15 % of the breed's 00:19:51.690 --> 00:19:54.190 modern genome. He's the source of both the production 00:19:54.190 --> 00:19:56.289 gains and the inbreeding concentration we're 00:19:56.289 --> 00:19:58.250 dealing with today. He is the root of the $6 00:19:58.250 --> 00:20:01.890 .7 billion problem we started with. Contrast 00:20:01.890 --> 00:20:03.890 that historical figure with Genosaurus Captain 00:20:03.890 --> 00:20:06.690 in the 2020s. Captain, with his seven consecutive 00:20:06.690 --> 00:20:09.720 number one TPI runs, became the proving ground 00:20:09.720 --> 00:20:11.900 for whether the modern genomic selection systems 00:20:11.900 --> 00:20:14.740 can actually deliver on their promises of predictability. 00:20:14.920 --> 00:20:16.759 So we're dealing with the lingering consequences 00:20:16.759 --> 00:20:19.500 of the 1970s while desperately trying to prove 00:20:19.500 --> 00:20:22.440 out the technology of the 2020s, all in the same 00:20:22.440 --> 00:20:26.059 herd. It's an insane juggling act. Which transitions 00:20:26.059 --> 00:20:28.769 us perfectly to part three. The battlefield. 00:20:29.410 --> 00:20:31.849 We need to talk about the relentless market forces 00:20:31.849 --> 00:20:34.549 that are demanding an immediate calculated response 00:20:34.549 --> 00:20:38.089 from every operation. And nothing defined 2025 00:20:38.089 --> 00:20:40.670 quite like the beef on dairy reckoning. This 00:20:40.670 --> 00:20:43.269 is the intersection where immediate cash flow 00:20:43.269 --> 00:20:46.230 for survival collided head on with long term 00:20:46.230 --> 00:20:48.930 genetic viability. It's the tightest margin decision 00:20:48.930 --> 00:20:51.170 a producer has to make right now. The adoption 00:20:51.170 --> 00:20:53.589 explosion is absolutely undeniable and it happened 00:20:53.589 --> 00:20:56.430 fast. American Farm Bureau data showed that 72 00:20:56.430 --> 00:20:59.309 % of U .S. dairy farms now use beef genetics. 00:20:59.730 --> 00:21:03.490 72%, up from basically zero a decade ago. CattleFax 00:21:03.490 --> 00:21:05.910 confirmed that crossbred calf production exploded 00:21:05.910 --> 00:21:09.950 from 50 ,000 head in 2014 to 3 .2 million in 00:21:09.950 --> 00:21:13.769 2024, with projections hitting 6 million by 2026. 00:21:14.130 --> 00:21:16.569 This isn't a trend. It's a structural industry 00:21:16.569 --> 00:21:19.009 shift. The economics are too compelling to ignore. 00:21:19.400 --> 00:21:21.380 That three -day -old crossbred calf delivers 00:21:21.380 --> 00:21:24.700 $800 to $1 ,000 cash flow immediately. You eliminate 00:21:24.700 --> 00:21:27.079 the cost of milk powder, the feed, the labor, 00:21:27.220 --> 00:21:29.240 the death loss risk, and that two -year wait. 00:21:29.400 --> 00:21:32.200 It is the ultimate survival mechanism in a tight 00:21:32.200 --> 00:21:35.039 margin environment. It lets you monetize the 00:21:35.039 --> 00:21:37.839 bottom end of your herd instantly. But here is 00:21:37.839 --> 00:21:41.220 the problem that ties back to the $6 .7 billion 00:21:41.220 --> 00:21:45.180 figure. You are effectively trading your genetic 00:21:45.180 --> 00:21:48.660 future for today's cash. And the market is shouting 00:21:48.660 --> 00:21:51.500 the long -term cost at us. We cited the USDA 00:21:51.500 --> 00:21:54.460 number earlier. Replacement effort prices hit 00:21:54.460 --> 00:21:58.359 that national average of... $2 ,870. And pushing 00:21:58.359 --> 00:22:01.640 past $3 ,200 in certain regions. This historic 00:22:01.640 --> 00:22:04.359 high is directly driven by the success of the 00:22:04.359 --> 00:22:07.079 beef on dairy strategy because suddenly everyone 00:22:07.079 --> 00:22:09.420 is short on quality of dairy replacements. The 00:22:09.420 --> 00:22:11.579 hard math is in the replacement ratio, which 00:22:11.579 --> 00:22:13.609 is the amount of seed corn you have left. The 00:22:13.609 --> 00:22:15.769 dairy herds ratio dropped to a critically low 00:22:15.769 --> 00:22:18.730 27 dairy heifers expected to calve for every 00:22:18.730 --> 00:22:22.210 100 cows. 27 to 100. That is a dangerously thin 00:22:22.210 --> 00:22:24.930 ratio. We are, quite literally, eating our seed 00:22:24.930 --> 00:22:27.630 corn. We are consuming the future equity of the 00:22:27.630 --> 00:22:30.410 herd for immediate calories today. But I have 00:22:30.410 --> 00:22:33.430 to play the devil's advocate here. If I'm a farmer 00:22:33.430 --> 00:22:36.769 who had a tough Q3, With unexpected feed price 00:22:36.769 --> 00:22:40.569 spikes, that $800 to $1 ,000 calf check is absolutely 00:22:40.569 --> 00:22:43.650 real money today. It pays the vet bill. It keeps 00:22:43.650 --> 00:22:46.569 the bank from calling. For a significant portion 00:22:46.569 --> 00:22:48.990 of producers, this isn't a long -term strategic 00:22:48.990 --> 00:22:51.930 decision. It's a short -term survival decision 00:22:51.930 --> 00:22:54.670 to make it to the next quarter. And that reality 00:22:54.670 --> 00:22:57.190 is completely valid. But we need to help you, 00:22:57.210 --> 00:22:59.509 the listener, distinguish between strategic use 00:22:59.509 --> 00:23:02.609 and reflexive use. Strategic use is disciplined. 00:23:03.099 --> 00:23:05.980 You use beef genetics on your bottom 20 to 30 00:23:05.980 --> 00:23:09.400 % of cows. And critically, that bottom 20 % must 00:23:09.400 --> 00:23:12.460 be genomically verified as poor performers. Precisely. 00:23:12.460 --> 00:23:14.960 You're not guessing. You're confirming which 00:23:14.960 --> 00:23:17.380 animals have low predicted transmitting abilities. 00:23:17.619 --> 00:23:21.569 Low PL, low DPR, poor health traits. You're monetizing 00:23:21.569 --> 00:23:23.930 the verified genetic tail of your herd while 00:23:23.930 --> 00:23:26.170 protecting your core. That protects your genetic 00:23:26.170 --> 00:23:28.910 engine. Reflexive use, however, is breeding beef 00:23:28.910 --> 00:23:30.690 on anything that moves just because the cash 00:23:30.690 --> 00:23:32.990 feels good this month. That guarantees you're 00:23:32.990 --> 00:23:35.009 going to be short replacements later. You will 00:23:35.009 --> 00:23:38.670 either have to pay $3 ,000 plus per head to buy 00:23:38.670 --> 00:23:41.390 someone else's genetics, or you'll be unable 00:23:41.390 --> 00:23:44.190 to expand when the market finally rewards growth. 00:23:44.529 --> 00:23:47.049 So the answer isn't don't use beef on dairy. 00:23:47.230 --> 00:23:50.670 The answer is use it like a scalpel. not a sledgehammer, 00:23:50.750 --> 00:23:53.609 and verify that bottom tier immediately. Okay, 00:23:53.670 --> 00:23:56.069 let's now talk about the silent killer in the 00:23:56.069 --> 00:23:58.430 genetics conversation, what we've called the 00:23:58.430 --> 00:24:01.309 hidden inbreeding tax. This is the underlying 00:24:01.309 --> 00:24:05.109 mechanism that underpins the entire $6 .7 billion 00:24:05.109 --> 00:24:08.490 figure we opened with. It's silent because it 00:24:08.490 --> 00:24:10.569 doesn't show up as a line item on your monthly 00:24:10.569 --> 00:24:12.950 income statement, but you feel it every single 00:24:12.950 --> 00:24:14.829 time you have to call the vet out for a difficult 00:24:14.829 --> 00:24:17.450 freshening or a cow that just won't breed back. 00:24:17.819 --> 00:24:20.299 The soaring rate is staggering and frighteningly 00:24:20.299 --> 00:24:23.119 fast. Holstein inbreeding in US herds climbed 00:24:23.119 --> 00:24:27.160 from a manageable 5 .7 % in 2010 to a critical 00:24:27.160 --> 00:24:31.160 15 .2 % by 2020. That is a geometric explosion 00:24:31.160 --> 00:24:33.799 in lack of diversity fueled by the overuse of 00:24:33.799 --> 00:24:36.519 a few elite sires. And we're not slowing down. 00:24:36.700 --> 00:24:38.759 Industry projections show we're heading toward 00:24:38.759 --> 00:24:42.039 18 to 22 percent by 2030. Let's put that in perspective. 00:24:42.220 --> 00:24:44.519 The established threshold where inbreeding depression 00:24:44.519 --> 00:24:48.839 becomes economically significant is 6 .25 percent. 00:24:48.880 --> 00:24:51.180 We are approaching triple that level industry 00:24:51.180 --> 00:24:54.559 -wide. We are sacrificing viability for temporary 00:24:54.559 --> 00:24:57.180 predictability. And the financial hit is real 00:24:57.180 --> 00:24:59.799 and quantifiable, thanks to the data coming out 00:24:59.799 --> 00:25:03.359 of the USDA ARS on net merit revisions. The analysis 00:25:03.359 --> 00:25:06.500 shows that each 1 % increase in inbreeding costs 00:25:06.500 --> 00:25:10.660 roughly $23 to $25 off a cow's lifetime net merit 00:25:10.660 --> 00:25:14.000 value. That is a direct, measurable tax. Yeah. 00:25:14.079 --> 00:25:16.740 But what does that $23 mean for me in the barn? 00:25:17.039 --> 00:25:19.319 It translates directly into measurable hits on 00:25:19.319 --> 00:25:21.900 the traits that keep cows in the parlor. Reduced 00:25:21.900 --> 00:25:24.220 fertility, lower productive life, and higher 00:25:24.220 --> 00:25:26.839 susceptibility to disease. Your fresh cows are 00:25:26.839 --> 00:25:28.900 sicker because their immune system lacks diversity. 00:25:29.140 --> 00:25:31.440 Your breed backlights are lower because fertility 00:25:31.440 --> 00:25:33.779 is one of the first traits to suffer. So that 00:25:33.779 --> 00:25:35.460 is why my fresh cow problems are getting worse. 00:25:35.619 --> 00:25:37.460 That's why I'm seeing more early culling pressure, 00:25:37.680 --> 00:25:41.000 even on my best -looking heifers. My herd's infertility 00:25:41.000 --> 00:25:43.859 issues are compounding, despite better management 00:25:43.859 --> 00:25:46.410 and expensive protocols. It's not necessarily 00:25:46.410 --> 00:25:48.690 your management. It's the compromised genetic 00:25:48.690 --> 00:25:51.930 resilience you're inheriting. Inbreeding reduces 00:25:51.930 --> 00:25:55.410 the cow's overall robustness. She needs perfect 00:25:55.410 --> 00:25:57.970 management and high inputs just to reach an average 00:25:57.970 --> 00:26:00.490 performance, and she's still more likely to fail. 00:26:00.789 --> 00:26:04.710 So if the tax is real, what is the value of reducing 00:26:04.710 --> 00:26:07.529 it? Does the data back up the pain of searching 00:26:07.529 --> 00:26:10.579 for diverse genetics? It absolutely does, and 00:26:10.579 --> 00:26:13.400 this is the good news. We saw documented case 00:26:13.400 --> 00:26:17.000 studies extension programs tracking 500 cow herds 00:26:17.000 --> 00:26:20.000 that consciously reduced inbreeding from 13 % 00:26:20.000 --> 00:26:23.039 down to 8 % over three years. And the result? 00:26:23.200 --> 00:26:27.519 Those herds saw $75 ,000 to $94 ,000 in improved 00:26:27.519 --> 00:26:30.450 lifetime cow value across the herd. Wow. If you 00:26:30.450 --> 00:26:33.130 take the high end of that, that's $188 per cow. 00:26:33.329 --> 00:26:35.890 That is a massive return on investment for simply 00:26:35.890 --> 00:26:38.710 managing genetics intelligently. That's a bigger 00:26:38.710 --> 00:26:40.869 check than you'd get from most premium contracts, 00:26:40.930 --> 00:26:43.069 and it's completely internal. This should be 00:26:43.069 --> 00:26:45.589 your single most urgent, actionable threshold 00:26:45.589 --> 00:26:48.650 this week. You must look at your inbreeding coefficients. 00:26:49.289 --> 00:26:51.750 If you are not looking at them, really looking 00:26:51.750 --> 00:26:53.730 at the relationship coefficient on your reports, 00:26:53.869 --> 00:26:56.910 start immediately. You need to stop maximizing 00:26:56.910 --> 00:26:59.269 the TPI score and start maximizing diversity. 00:27:00.079 --> 00:27:02.559 What is the practical target? I'm looking at 00:27:02.559 --> 00:27:05.019 the projected inbreeding of a bull on my herd. 00:27:05.160 --> 00:27:07.740 What number is my hard stop? Set your sire search 00:27:07.740 --> 00:27:10.640 filters to a 6 % max projected inbreeding or 00:27:10.640 --> 00:27:13.359 lower. That 6 % is your non -negotiable threshold 00:27:13.359 --> 00:27:15.680 because it keeps you below that economically 00:27:15.680 --> 00:27:19.160 significant depression point. If your current 00:27:19.160 --> 00:27:21.599 genetics provider cannot easily give you that 00:27:21.599 --> 00:27:24.559 data and help you filter, that is a massive structural 00:27:24.559 --> 00:27:26.400 problem you need to solve this week. You need 00:27:26.400 --> 00:27:28.779 diversity and you need transparency. Speaking 00:27:28.779 --> 00:27:30.859 of structural problems and transparency, we have 00:27:30.859 --> 00:27:32.700 to address the elephant in the room that changed 00:27:32.700 --> 00:27:35.799 the future of supply in 2025. Industry consolidation. 00:27:36.359 --> 00:27:38.920 Oh, yeah. Specifically, the pending combination 00:27:38.920 --> 00:27:41.920 of select sires and ST genetics. This is segment 00:27:41.920 --> 00:27:45.980 six. This merger is a seismic event. It fundamentally 00:27:45.980 --> 00:27:48.799 alters the landscape of semen supply in North 00:27:48.799 --> 00:27:52.200 America and globally. When you combine the largest 00:27:52.200 --> 00:27:54.880 farmer -owned co -op with one of the most technologically 00:27:54.880 --> 00:27:57.940 dominant private companies, you create an entity 00:27:57.940 --> 00:28:01.579 with unprecedented market power. Think about 00:28:01.579 --> 00:28:03.859 the resulting market control. When this combination 00:28:03.859 --> 00:28:06.799 is finalized, just three companies will control 00:28:06.799 --> 00:28:09.819 roughly 70 % of the genetics flowing into North 00:28:09.819 --> 00:28:13.769 American herds. 70%. That is historic. And the 00:28:13.769 --> 00:28:15.730 argument for consolidation is always efficiency 00:28:15.730 --> 00:28:18.410 and accelerated innovation. They say it allows 00:28:18.410 --> 00:28:20.730 them to invest more in R &D and bring better 00:28:20.730 --> 00:28:22.970 genetics to market faster. Which is true, in 00:28:22.970 --> 00:28:25.349 theory. That's the spin. The reality is that 00:28:25.349 --> 00:28:28.109 consolidation concentrates genetic control precisely 00:28:28.109 --> 00:28:30.970 when genetic diversity is most needed. Right 00:28:30.970 --> 00:28:34.170 when we were fighting the $6 .7 billion inbreeding 00:28:34.170 --> 00:28:37.210 tax. When three entities control that much of 00:28:37.210 --> 00:28:39.269 the market, they control the direction of the 00:28:39.269 --> 00:28:41.230 breed. You mean they decide which traits are 00:28:41.230 --> 00:28:43.769 emphasized? If they decide to chase pure volume 00:28:43.769 --> 00:28:46.309 and let fertility slide, my options for finding 00:28:46.309 --> 00:28:48.650 a bull that prioritizes fertility for my struggling 00:28:48.650 --> 00:28:51.809 herd just dried up. My analysis is stark here. 00:28:52.009 --> 00:28:54.990 When three companies control 70 % of the market, 00:28:55.150 --> 00:28:57.710 you are no longer a customer. You are a captive 00:28:57.710 --> 00:29:01.690 market. If they prioritize milk volume over productive 00:29:01.690 --> 00:29:04.769 life, you have extremely few alternatives for 00:29:04.769 --> 00:29:06.990 diversifying that risk or maintaining leverage. 00:29:07.529 --> 00:29:09.769 That's terrifying, because if I wait until the 00:29:09.769 --> 00:29:12.750 ink is dry on the merger documents, my options 00:29:12.750 --> 00:29:15.890 are completely gone. So, what's the tactical 00:29:15.890 --> 00:29:18.470 response? How does a producer regain options 00:29:18.470 --> 00:29:21.170 and leverage? You nailed it. The window for action 00:29:21.170 --> 00:29:24.250 is closing now. Producers need to diversify suppliers 00:29:24.250 --> 00:29:26.809 immediately. I don't mean buying one bowl from 00:29:26.809 --> 00:29:29.269 a different catalog. I mean establishing genuine, 00:29:29.430 --> 00:29:32.670 strong working relationships with multiple genetic 00:29:32.670 --> 00:29:35.670 suppliers. The big ones and the smaller niche 00:29:35.670 --> 00:29:37.950 outfits that specialize in outcrossed genetics. 00:29:38.329 --> 00:29:40.569 That ensures genetic breadth, giving you access 00:29:40.569 --> 00:29:42.970 to non -mainstream bloodlines to fight the inbreeding 00:29:42.970 --> 00:29:45.509 tax. But it also gives you crucial negotiating 00:29:45.509 --> 00:29:48.880 leverage. If you rely on one company for 90 % 00:29:48.880 --> 00:29:51.319 of your semen, you are entirely at their mercy 00:29:51.319 --> 00:29:53.180 when it comes to pricing and product availability. 00:29:53.559 --> 00:29:55.460 Diversification is your hedge against becoming 00:29:55.460 --> 00:29:57.759 a captive buyer. And while we're talking about 00:29:57.759 --> 00:29:59.980 massive forces, we should probably touch on the 00:29:59.980 --> 00:30:03.200 political context. That endless U .S.-Canadian 00:30:03.200 --> 00:30:06.420 trade situation. President Trump has been beating 00:30:06.420 --> 00:30:08.740 the same drum on Canadian dairy and their supply 00:30:08.740 --> 00:30:11.900 management system since 2018. And frankly, the 00:30:11.900 --> 00:30:14.940 political argument is tiring. It is because regardless 00:30:14.940 --> 00:30:17.279 of your political stance, the economic outcome 00:30:17.279 --> 00:30:19.960 of the Canadian system is undeniable. Supply 00:30:19.960 --> 00:30:23.039 management creates stability. Full stop. Production 00:30:23.039 --> 00:30:25.960 quotas match demand, minimum prices are guaranteed, 00:30:26.240 --> 00:30:28.960 and high import tariffs stabilize their domestic 00:30:28.960 --> 00:30:31.880 market. And that stability means Canadian dairy 00:30:31.880 --> 00:30:34.819 farm debt -to -asset ratios have remained substantially 00:30:34.819 --> 00:30:37.220 more stable over the past decade than those in 00:30:37.220 --> 00:30:40.279 the U .S., where producers are subjected to constant 00:30:40.279 --> 00:30:43.119 wild swings and margin crises. So the lesson 00:30:43.119 --> 00:30:45.119 for the American producer isn't about the moral 00:30:45.119 --> 00:30:47.500 superiority of free markets or supply management. 00:30:47.720 --> 00:30:50.299 It's about the structural vulnerability inherent 00:30:50.299 --> 00:30:52.980 in your system. My take, and I stand by this, 00:30:53.099 --> 00:30:56.220 American producers need to analyze why their 00:30:56.220 --> 00:30:58.519 system creates such vulnerability rather than 00:30:58.519 --> 00:31:00.839 just arguing about the fairness of the Canadian 00:31:00.839 --> 00:31:04.509 system. Stop expecting trade negotiations to 00:31:04.509 --> 00:31:06.609 solve the structural problems in your mill check. 00:31:06.809 --> 00:31:09.210 Budget for volatility. Lock in your prices and 00:31:09.210 --> 00:31:11.609 feed costs when you can. And don't assume the 00:31:11.609 --> 00:31:13.509 government is going to solve the problem of market 00:31:13.509 --> 00:31:15.769 instability for you. That's the only way to be 00:31:15.769 --> 00:31:18.410 a survivor. All right, let's wrap this entire 00:31:18.410 --> 00:31:21.269 deep dive into 2025 with the most critical part, 00:31:21.450 --> 00:31:24.650 the actionable takeaways. A farmer is heading 00:31:24.650 --> 00:31:27.930 into 2026 planning right now. Three things. High 00:31:27.930 --> 00:31:30.349 impact, non -negotiable instructions from this. 00:31:30.750 --> 00:31:33.670 3 things you can implement this week that cost 00:31:33.670 --> 00:31:35.509 almost nothing but will save you tens of thousands 00:31:35.509 --> 00:31:37.950 of dollars and significantly improve herd longevity 00:31:37.950 --> 00:31:43.049 down the road. Today, not next month, pull those 00:31:43.049 --> 00:31:45.329 inbreeding coefficients on your genetic reports. 00:31:45.750 --> 00:31:48.009 The data shows that the difference between 13 00:31:48.009 --> 00:31:53.549 % and 8 % inbreeding is a direct $150 to $188 00:31:53.549 --> 00:31:57.470 per cow in lifetime value. Set your sire search 00:31:57.470 --> 00:32:01.049 filters to a 6 % max projected inbreeding. Make 00:32:01.049 --> 00:32:03.829 that non -negotiable. Number two, and this is 00:32:03.829 --> 00:32:06.049 crucial for protecting your core herd while still 00:32:06.049 --> 00:32:09.119 monetizing beef on dairy. Before spring breeding, 00:32:09.359 --> 00:32:12.339 you need to identify your bottom 20 -30 % for 00:32:12.339 --> 00:32:15.119 beef cross. This selection must be genomically 00:32:15.119 --> 00:32:17.519 verified. Do not make this selection based on 00:32:17.519 --> 00:32:19.759 type or intuition. Protect your genetic core 00:32:19.759 --> 00:32:22.460 by only breeding beef to your verified, low -merit, 00:32:22.460 --> 00:32:24.500 poor -performing animals. And finally, number 00:32:24.500 --> 00:32:27.039 three. This year, establish working relationships 00:32:27.039 --> 00:32:29.880 with multiple genetic suppliers. Do it now, before 00:32:29.880 --> 00:32:32.420 the ink dries on the select Sires genetics combination. 00:32:32.920 --> 00:32:35.140 The consolidation window is closing, and once 00:32:35.140 --> 00:32:37.119 those three companies own 70 % of the market, 00:32:37.279 --> 00:32:40.160 you lose all leverage. Diversification is survival 00:32:40.160 --> 00:32:43.259 architecture. That's our 2025 wrap -up. Honestly, 00:32:43.480 --> 00:32:45.680 if you only read one Bullvine article or listen 00:32:45.680 --> 00:32:47.859 to one deep dive before you start making those 00:32:47.859 --> 00:32:50.480 critical spring breeding decisions, make it this 00:32:50.480 --> 00:32:53.470 one. It ties together the failures, the successes, 00:32:53.589 --> 00:32:55.910 and the catastrophic costs of delayed action 00:32:55.910 --> 00:32:59.890 on inbreeding and consolidation. All 16 source 00:32:59.890 --> 00:33:02.589 stories, from Juan Moreno's rise to the explanation 00:33:02.589 --> 00:33:06.130 of the Section 46 collapse to the $4 ,500 Black 00:33:06.130 --> 00:33:10.009 Rose purchase, are linked for you at www .thebullvine 00:33:10.009 --> 00:33:13.029 .com. Go there, read the source material, and 00:33:13.029 --> 00:33:15.430 implement these three changes today. Subscribe 00:33:15.430 --> 00:33:18.009 for daily deep dives. Next up, we're covering 00:33:18.009 --> 00:33:20.230 the potential impact of ongoing margin crises 00:33:20.230 --> 00:33:22.250 on the demand for specialized feed efficiency 00:33:22.250 --> 00:33:24.750 genetics and whether that will replace TPI as 00:33:24.750 --> 00:33:27.809 the primary ranking system in 2026. Don't wait 00:33:27.809 --> 00:33:29.710 for the shifting ground to settle. Move with 00:33:29.710 --> 00:33:31.490 it. Thanks for joining us for The Deep Dive.