Stacking the Odds
Is Sexed Semen Worth the Extra Expense?
As beef cattle producers move into the expansion phase, interest in artificial insemination with sexed semen is increasing. Many ranchers want to see if sexed semen is a profitable way of developing additional high-value replacement heifers.
Proponents of the approach say sexed semen can improve genetics and gives them the option of using calving ease sires, along with a high percentage of calves of the desired sex. In today's market, many ranchers want to stack the odds in favor of high-quality replacement beef heifers.
"We're coming out of a drought, and cow numbers are down. I think replacement beef females will be in high demand," said Heath Kohler, manager of the 26,000-acre Ratcliff Ranch near Vinita, Okla. "People want replacement females with known genetics from a reputable herd. We have years of carcass data on our cow herd. People know the calves out of our heifers will hit the grids and earn premiums."
CONCEPTION TRIAL
To build cow numbers for the ranch's 4,200-cow herd and for replacement heifer sales, Kohler recently worked with Genex Cooperative and the University of Missouri in a large sexed semen project. In January 2012, he AI-bred 300 cows using conventional and sexed semen; in January 2013, he AI-bred another 656 cows using conventional and sexed semen. These were one-time AI cows, on a working ranch.
Conception rates in both groups were higher with the conventional semen. In the 300-cow group from 2012, the conception rate using conventional semen was 69%. The cows bred using the sexed semen had a 59% conception rate. In the 2013 trial of 656 cows, those bred using conventional semen averaged 77% conception, and those bred using the sexed semen averaged 51%. These percentages were for cows that were in heat at the time of breeding. The researchers used heat detection patches to determine which cows were in estrus at the time of AI.
"The take-home message with timed AI is that you can achieve over 50% conception rate with sexed semen if you only inseminate the animals showing estrus. Based on what we've seen, I wouldn't recommend using sexed semen unless cows are showing estrus," said Stan Lock of Genex Cooperative.
PREGNANCY RATES KEY
AI conception rates must be strong to make sexed semen pay off in replacement heifer operations. There are fewer viable sperm in sexed semen, which is why conception rates from sexed semen run 10% to 15% lower than for conventional semen.
Sexed semen, however, is 90% effective in gender selection, reports Sexing Technologies of Navasota, Texas. This company sorts semen by X and Y chromosomes and has working agreements to sort semen with most of the large bull studs in the U.S.
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Sexed semen is more expensive than conventional AI semen, but the price has recently decreased. Depending on the sire, Sexing Technologies estimates a straw of sexed semen costs $35 compared to $20 for conventional semen.
Despite the additional cost, sexed semen is only 6% of the total cost of developing a bred heifer. The initial value of the heifer at weaning and the cost of feeding her during the development phase are the major expenses.
Although bull choices are still limited, the number of AI sires with sexed semen available has jumped from zero to approximately 100 during the past five years. Bull owners can deliver their sires to facilities in Texas and Nebraska to have AI semen collected and sexed. Clean-up bulls are often used with either sexed semen or conventional semen to bring conception rates up to long-term herd averages.
GENDER DIFFERENCES
The gender difference in sales value of a replacement heifer is a major factor to using sexed semen to produce females. F1 (Brahman/Hereford or Brahman/Angus) heifers represent a good example in gender difference.
F1 females are considered the most efficient and long-lasting brood cows from Texas across the Gulf Coast to Florida. However, the half-Brahman steer mates resulting from the F1 cross are often discounted at feeder calf sales (compared to steers with less than 25% Brahman blood).
"If there's a big gender difference in value (around $150) it offsets the lower pregnancy rate," said Jim McGrann, management economist and professor emeritus at Texas A&M University. "Before a producer starts breeding with sexed semen, he needs to know the gender difference. Producers wanting F1 replacement heifers sure see a large gender value difference."
F1 open heifers have recently sold from $1,600 to over $2,200 at Texas auctions. But it's hard to predict the gender value at weaning between a potential replacement heifer and a feeder steer.
Missouri's Show-Me-Select Heifer Sales are large markets for bred replacements in the country. Due to the 2012 drought and high corn prices, the 297 heifers in the May 2013 sale in southwest Missouri averaged only $1,524 per head, but a similar sale of 232 heifers at Fruitland, Mo., averaged $1,822 per head. Overall, Show-Me-Select bred heifers usually average the value of two 550-pound feeder steers, according to sale coordinator Eldon Cole.
"We haven't had any interest among consignors in Show-Me-Select Heifer Sales to use sexed semen," said Missouri Extension livestock specialist Cole. "We're trying to get producers to do more heat synchronization and AI to high-accuracy bulls that aren't just calving-ease bulls. We're making progress in that direction, but I'm not yet encouraging anyone to use sexed semen."
As the November 2013 Show-Me-Select Heifer Sales approached, Cole expected better price averages of $1,750 to $1,800 per heifer and up. Forage supplies are much better this year, and commercial producers are expected to be in the market for replacement heifers after they heavily culled cows during the drought.
While $1,800 sounds like a big price to pay for a replacement heifer, Show-Me-Select Sale consignors said they need at least $1,800 per heifer to do much more than break even.
Missouri's Mike Kasten is a veteran consignor to the Show-Me-Select Heifer Sales. Kasten said he starts with a heifer that's worth $900 to $1,000 at weaning. His costs for breeding and developing the heifer to the age of 22 months at sale time run another $700 to $800 for a total of $1,600 to $1,800.
"I haven't used sexed semen yet. Selecting the sex of 90% of your calf crop is a lovely idea, but I'm concerned about the lower pregnancy rates with sexed semen and the limited number of AI sires with sexed semen available," said Kasten.
BACK AT THE RANCH
Based on the calls he's getting from ranchers, Kohler is bullish on the replacement heifer market for the next few years.
"We've got lower corn prices for the feedlots and more grass in this area than we've had in five years. I think there's demand for heifers, and I expect to see prices for replacements north of $2,000 this fall," said the Ratcliff Ranch manager.
"With this kind of demand, we're planning to use sexed semen to produce more heifers as soon as our fall calves hit the ground."
A BOTTOM LINE FOR HEIFER COSTS
In a 2010 study on a Nebraska ranch, University of Nebraska researchers compared the costs and conception rates from AI with conventional semen, AI with sexed semen and natural service bulls.
Texas A&M professor emeritus Jim McGrann recently updated those results using 2013 values for expenses. He started with weaned heifers valued at $1,000 per head.
McGrann used the study's pregnancy rates for conventional AI at 57%, 41% for sexed semen, and an overall pregnancy rate of 93% (thanks to cleanup bulls). The semen cost per AI pregnancy was $35 for conventional semen and $75 for sexed semen. The breeding system costs per pregnant heifer were $64 for natural service; $94 for AI with conventional semen and $110 for AI with sexed semen.
He estimated for fall 2013 pregnant heifer net cost would be $1,753 for natural service, $1,786 for conventional semen and $1,804 for sexed semen.
(VM/CZ)
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