Demand drivers for genetic improvement

Drivers

DEMAND FOR ANIMAL PROTEIN IS GROWING

The global population is expanding and urbanising, and seeking a more varied and nutritious diet. Pork, milk and beef consumption are forecast to grow by 1–2% p.a. in the next decade

FOOD PRODUCTION MUST BECOME MORE SUSTAINABLE

Competition for resources, such as land and water, and the need to reduce greenhouse gas emissions, puts pressure on farmers to become more efficient, through the use of genetically superior animals and other technologies.

CONSUMERS ARE DEMANDING BETTER PRODUCTS

Consumers are increasingly demanding healthier and more sustainable products, which are traceable and produced with fewer drugs. This increases farmers’ demand for genetically superior breeding animals, which are naturally more efficient and resilient.

FARMS ARE CONSOLIDATING AND TECHNIFYING

Progressive farmers, who are more open to new technologies and measure performance in more detail, are consolidating the sector. They understand the benefits of genetically superior animals and optimised breeding strategies, such as combining the use of sexed dairy and beef semen on dairy herds to maximise profit.

 

Trends in our market

CONSOLIDATION OF ELITE BREEDING HERDS

Elite breeding bulls and pigs are bred from genetically elite breeding herds. The increasing use of costly technology and the scale required to keep pace with industry leaders is driving consolidation of these herds. As genetics consolidate, some breeders are forming strategic alliances with competitors, so they can offer their customers superior genetics

ADOPTION OF SEXING TECHNOLOGY

Cows must be impregnated to produce milk so dairy farmers need to regularly breed their animals and refresh their milking herds. Using sexed semen yields approximately 90% female offspring, enabling dairy farmers to refresh their milking herd with fewer, higher quality breedings. This enables them to breed the rest of the herd with beef semen, which maximises the meat quality (and value) of the resulting calf.

BREAKTHROUGH TECHNOLOGY AND DATA

Genus is developing innovative solutions to combat disease and improve animal welfare, which also have the potential to dramatically increase protein sustainability. These include development of health-focused indices to select optimal breeding animals, as well as employing gene editing and advanced reproductive technologies. Progressive farmers are also increasingly leveraging digital technologies, which provide data and insight to support decision making.

Position

Genus is a world leader in animal genetic improvement. We have a global commercial platform with critical mass. We are also the only listed porcine and bovine genetics company globally, giving us strategic access to finance. Our competitors are largely private companies and farmer-owned cooperatives, many of which are regionally focused.

1 Source: Genus analysis; US Holstein breeders represented in the Top 200 NM$ rankings by birth year; 2020 data based on Top 200 Holsteins active using August 2020 data from the Council on Dairy Cattle Breeding.
2 Source: Government agencies, local independent pork organisations, Genus estimates. Market shares represent the estimated share of pig production in top pig production markets.
3 Source: Government agencies, local bovine genetics and agriculture organisations, Genus estimates. Market shares represent the estimated share of combined dairy and beef volumes in ABS’s Top 29 target markets for dairy and Top 8 target markets for beef.

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