Beef genetics, and how genetics play a role in the sustainability of dairies
How can beef genetics improve sustainability on dairies? Philip Halhead, a third-generation dairy farmer and the founder, owner and CEO of Norbreck Genetics, Ltd., joins the Ag Future podcast to discuss how dairies can utilize beef genetics to protect the planet, create jobs and increase profitability.
The following is an edited transcript of the Ag Future podcast episode with Philip Halhead hosted by Tom Martin. Click below to hear the full audio or listen to the episode on Apple Podcasts, Spotify or Google Podcasts.
Tom: Welcome to Ag Future, presented by Alltech. Join us from the 2022 Alltech ONE Conference as we explore our opportunities within agri-food, business and beyond.
I'm Tom Martin for the Alltech Ag Future podcast series, and I'm here with Philip Halhead, founder, owner and CEO of Norbreck Genetics, Ltd., based near Lancaster in the United Kingdom. Philip founded the company to improve the beef-on-dairy offerings for global dairy farmers. He's with us today to focus on beef genetics and how genetics play a role in the sustainability of dairies. Welcome, Philip.
Philip: Yes, good afternoon.
Tom: Tell us about your work. What does Norbreck Genetics bring to the cattle industry?
Philip: Well, (I’d like to give) a little background, if you will, if you'll just forgive me for a second.
Tom: Please do.
Philip: (It’s) a really interesting, passionate story. I'm a third-generation dairy farmer at Norbreck Farm, and it's the unique ability, I think, of the family and myself to understand dairy farming. I am a dairy farmer myself. I'm also unusually in the beef space. We've bred beef cattle. We have a small Aberdeen Angus herd, a small British Blue herd, (and have been) involved across multiple breeds of beef cattle over 25 years now. It's that ability to understand what the dairy farmer requires, how the industry has changed (that’s crucial). Sexed semen technology has rolled into the industry since the year 2000, and it's taken a number of years to develop and become popular and successful.
On the back of that, beef genetics have become imprinted into the dairy herd. We've talked extensively over the last two days about dairy-beef. It's the ability of the dairy cow and its miraculous genetic potential to produce high volumes of luxurious, highly nutritious milk, (and it’s) also producing, now, a beef calf. Ordinarily, we would require some replacements for our dairy herd. Around 25% a year would be replaced, and the sexed semen does that for us. That leaves a lot of cows to carry a beef calf, and the income stream, critically, for the dairy farmer that that provides — and the sustainability piece, which is a big piece of Alltech this week. We're talking sustainability, longevity and, ultimately, supply chains.
Tom: How can beef genetics improve a dairy cow?
Philip: So, it's not about improving the dairy cow; forgive me. It's more a case of producing beef from the dairy herd. What the supply chain and, ultimately, the consumer enjoys is a consistent product. So, if we imagine for a minute the 1,000-cow dairy herd, the 500-cow dairy herd, that beautiful Holstein cow, which carries little flesh — it's using its metabolizable energy and its reserves to produce that milk. When you cross that with an Aberdeen Angus or British Blue or Longhorn beef bull, you'll get this almost perfect beef animal that you can then follow through rear to possibly 12 months or a two-year-old grass-fed beef animal that then, ultimately, ends up on somebody's plate.
I've talked today during my piece at (the) Alltech (ONE Conference) about food with a story. That's the exciting piece in the future, is providing red meat to a consumer who wants to enjoy a consistent, tasty meat-eating experience and understand the provenance of what they're eating.
Tom: I'm a layman, so this is a layman's question. Is beef-on-dairy a relatively recent opening up of the industry?
Philip: That's a great question. If we look back to the U.K., I've been doing this business now for over 25 years, and beef-on-dairy has been something that's been in Europe and in the U.K., particularly, for a long time. Certainly, we could look back 40 to 50 years, and there’s been a small percentage of beef in the supply chain coming from dairy cows. But as I explained previously, it’s now accelerating, and it's accelerating all around the world with the advent of sexed semen allowing just the very best cattle genetics, the very best dairy cows to be bred for replacements on that dairy herd and allowing beef semen to be used across the rest of the herd.
Tom: So, how is beef-on-dairy changing things in the dairy and the beef industries?
Philip: Well, I think, again, at the cutting edge of this and the stark reality of sustainability in Europe and in the U.K., we're seeing what you call cow-calf operations; here in the U.S., (that’s) what we would call a suckler herd. Keeping one cow for a whole year just to produce one calf is questionable at best. Now, there are opportunities in more arid areas, in more rugged areas; we think about Montana and states where there are vast ranges of grassland. There's little ability to produce milk in those areas, so the cow-calf operation will survive, and it will be a major part and an important part of the beef industry.
But for the supply chain, for the retailer, it's almost been like a gold rush for dairy farmers to buy into the whole supply chain piece. Those herds can provide big numbers of very consistent calves that then go through the chain, and they are finished, critically, quite fast on reasonably intensive diets. Therefore, that sustainability piece, again, that is ticked, and the metrics are met that we're looking to lower imports. We have a phrase in the U.K.: sustainable intensification.
Tom: How has this impacted the economics of the business?
Philip: For the cow-calf operation in the U.K. and in various parts of Europe now, it's catastrophic, and that's not just the beef-on-dairy story. That's just the economics of keeping a cow for a whole year to produce one calf. We also think about (how) not every cow has a calf every year, so there's an impact of that on profitability.
Subsidies in Europe, as you may well be aware, have been a big piece of that pie. Subsidies are now getting withdrawn, going into environmental schemes. Some of these farmers, their land, they're rugged, so there are more arid areas. (They’re) planting trees, thinking about the ecology and actually destocking — so no sheep, no beef cattle — again, driving that change for getting the beef from the dairy herd and accelerating the change. The profitability in the dairy is an extra income, so it ticks all the boxes. Beef farmers are finding new ways to operate and looking at new environmental stewardship schemes.
Tom: When selecting beef bulls to breed the dairy animals, which breeds are the most in demand and why?
Philip: Well, in the U.K., it's the British Blue. It's the quite extreme double-muscle animal that was created from the Beef Shorthorn many years ago. Once the Beef Shorthorn was taken out to Belgium, the myostatin gene was identified, and this incredible animal, which is double-muscled, was developed called the Belgian Blue — now the British Blue. When you cross that onto a Holstein dairy cow, it gives an easy carving (and a) short gestation period, (and you get) the ultimate beef-cross-dairy animal because of the two extremes. You're putting a Holstein cow together with the animal and the breed that has the most amount of meat.
The efficiencies that are around that, the killing-out percentages we talk about in the supply chain, those British Blue-cross-Holstein would typically kill out 5% to 10% more carcass yield at a set given time. Those sorts of metrics hooked onto price create an added value both for processor and retailer. Those are the important percentages that we talk about.
But also, today, I've talked about the Longhorns. We think about Robert Bakewell, who is the godfather of cattle breeding. He was born in the early 1700s. In 1760, I believe, he took over his father's tenanted farm in Leicestershire and developed this Longhorn breed, which was originally a cart animal for plowing and for doing all sorts of strange things in the fields, as they did back then in the 1760s. But today, it's an animal with a great story. It's a wonderful beef animal. It's got the long horns, as the name suggests.
When we think about the higher-end consumer who is maybe eating less red meat but they want meat with a story — so they go to Chicago or they go to New York or they're in London for a high-end, red meat-eating experience in a restaurant. They know they're going to pay a whole heap more for that choice compared with chicken or a vegetarian dish, but they're prepared to do it because they're reading about the Longhorn, maybe about Robert Bakewell, maybe about the fact that it was produced in the Lake District fells. It creates a lovely story. They're comfortable with the provenance and the consistency of the product. It eats well, and then (there’s) that nice bottle of Malbec, Argentinian Malbec, to go with it.
Tom: You touched on this earlier, but to zero in on it, what is the role of genetics in supporting the sustainability of the dairy operation?
Philip: For me, the three pillars are planet, people and profit. Sustainability can be talked about in many different formats. I think there's a need to talk about the sustainability of the planet, of course, and that's the mission. Farmers, we are the solution. We're not the problem. I think that narrative is something — it's a story. We have a great story to tell about how we manage the landscape, produce food in a sustainable manner and its efficiencies. It's producing food in a more efficient way. If we can use less artificial fertilizer, think about a greater output from a similar area. Think about the genetic potential of crops and animals. That's a wonderful story.
But around sustainability on the dairy and the beef piece, if we can get that extra income from selling beef-cross calves from dairy cows, it puts more finance on the table. It gives, hopefully, a slightly more profitable business. The third piece of that sustainability is people; therefore, we can employ the best people in ag. One of my big things is encouraging young people to come into agriculture. It's an amazing and an exciting future for many, many young people. We need people, certainly a lot younger than I am, to teach me about technology, data and some of those wonderful tools we're going to need in the future.
So, attracting people, protecting the planet and creating more profits at farm level — and the sharing of the profit. I talked about that this morning. In the past, I think it's been a bit disproportionate. We found the retailers taking a disproportionate margin for some of these food products that the farmer produces. Possibly, the processor also tries to capture some margin, and it leaves the poor farmer quite often with either a negative margin or a very small margin. So, we have to close the supply chains down. We have to have a more open dialogue, and the sustainability comes from that.
Tom: Buyers tend to dislike uncertainty. How would you rate the predictability and the consistency of the beef-on-dairy concept?
Philip: We heard yesterday from the Texas university professor about the scientific evidence around beef-cross-dairy animals. There's a hormone — well, I say hormone, but it's a natural hormone; this isn't an artificial thing — around dairy cows that gives extra flavor and consistency. There's a certain pack size as well. In the U.K. — I'm not too au fait with the USDA standards, but in the U.K., typically we're looking for a 350-kilo carcass. It's a standard pack size.
When I talk to retailers, they try and fit a pack size to a price. Typically, in the U.K., you need a 4.99- or 4.95-pound price tag, just below the five-pound level. People are happy to pick that up so that the thickness of the steak they're collecting off the shelf, the look of that steak — in Europe, we would have less requirement for intramuscular fat, whereas in Asia, the wagyu breed is very popular. It's quite a greasy meat-eating experience but one that's sold as the ultimate meat-eating experience. So, really understanding your consumer, really understanding what it is you're trying to provide, for whom, and at what price level.
Tom: You collaborate closely with supply chains. And in these times that we're in, many of the world's supply chains are backlogged (or) even overwhelmed right now. How are supply chains that are essential to beef and dairy operations performing in this environment?
Philip: Certainly, there's some challenge around carcass balance. We see some of those prime cuts, the filet steak, some of those higher-end cuts are needed (and) provided — we just talked about that — in some of the higher-end restaurants and (for) the wealthier consumer. The danger is that a bigger proportion of the carcass is devalued into the minces and the smaller primal cuts that just end up in a really discounted format. That's a challenge for processes, but we've got a slightly bigger challenge, and I think that is one of supply and supply disruption.
We are seeing record prices in the auctions for cattle. We're seeing record demand. I'm certainly looking and thinking, “Globalization.” Whilst it's still alive and well, it's possibly been looked at as not the solution for the future. There's a sort of realization — and some countries are actually preventing exports of food products, so that creates disruption in supply and availability. There's an opportunity for farmers to capitalize on that, but not in a greedy way. We need these supply chains to run efficiently.
It's a very tight-margin business we're all in, but we also have to capture more value because just in the same way that beef prices are at a record level, all our commodity products that we're buying into the farm are also. We think about fertilizer, wheat and some of the major products that we buy into our dairy units, into our beef supply chain, (our) beef finishing units. They are seeing record price increases. Unfortunately, we're all just moving up a level to a higher reality of expensive food.
Tom: In your work, do you follow consumer trends? If you do, what are you seeing happening out there?
Philip: Yeah, very much so. The early signs are of a distressed consumer. Energy and food poverty is going to be on the increase. The worry there is not really too much for a European (or) U.K. consumer and some of those wealthier, more developed countries, but I think my worry is for less developed nations around the world and the potential for literally malnutrition and starvation on a scale we haven't seen — or we thought we'd solved, to some degree — over the last 10 or 15 years. I think that's really back on the table. It's going to give a lot of people thinking time. The Arab Spring, of course, was caused by disruption to food supply and increases in commodities, and it wasn't at anywhere near the levels we're seeing now, (with) 200% and 300% increases in some food staples.
There's a political instability that we're going to have to watch and be very nervous about. But ultimately, we can also turn and be positive about where we are. As farmers, I've said it before, we have got the solutions. We've got the tools. We've got the knowledge. We've got the education. We've got a wonderful story to tell. I think we have to be brave about doing that and making sure that investment is continuing into good production systems that are sustainable for the planet and ultimately feed more people.
Tom: All right. That's Philip Halhead, founder, owner and CEO of Norbreck Genetics, Ltd. Thank you very much, Philip.
Philip: Thank you very much.
Tom: For the Alltech Ag Future podcast series, I'm Tom Martin. Thank you for joining us. Be sure to subscribe to Ag Future wherever you listen to podcasts.