This article first appeared in our sister publication, Dairy Farmer.
It’s been a changeable 18 months for LIC chief executive David Chin as the dairy improvement co-operative assists the dairy industry to meet the environmental challenges it faces locally and globally.
Looking back at the time since he started in the role in January 2022, replacing Wayne McNee, Chin says it has reinforced his appreciation for the role of herd improvement in the dairy industry.
“It has never been as important as what it is right now.
“As we went through He Eke Waka Noa and start looking at more and more of the challenges that the agriculture sector is facing globally, the message we are getting is that efficiency is key.”
The crux of that efficiency is around milksolid production per kilogram of feed eaten while lowering the emissions per animal – and the importance of finding solutions has massively amplified, he says.
“It’s really important now that we roll up the sleeves and sharpen our focus on breeding the most efficient cows for our national herd.”
He sees companies such as LIC playing more of a role in helping farmers reduce their emissions. When farmers ask them for help, the first thing that needs to be established is how efficient their cows are.
The scope for improvement can be determined once the herd is analysed. Chin says it is amazing how much opportunity still exists. Even in the most well-managed herds, there can be a difference of 150kg milksolids between well-performing cows and poor-performing cows.
This is where there are opportunities for herds to improve – “when you start considering, ‘Where is the opportunity over the next seven years to start improving and what does that look like?’”
“In one instance we worked out it’s about 20,000 kgMS, and it equated to around $115,000 in income milking the same number of cows, but just better cows.”
For the farmer, it gave them an achievable goal.
These opportunities exist on every farm, and Chin sees the national herd’s performance shaped like a bell curve as cow numbers have grown over the past 20 years.
This has now changed with herd numbers peaking and starting to decline. Farmers are now saying they want better cows, rather than more cows.
“They have pivoted their attention to saying, ‘Let’s do some herd testing and find out which are the cows providing me with the most profit and which are the ones taking profit away’.”
This was reflected in the latest dairy statistics produced by LIC and DairyNZ, which showed that once again cow numbers have declined.
Chin says there is still plenty of scope for the industry to improve, despite NZ’s world-leading efficiency as a milk producer.
“The exciting thing for our industry is that we still have room to improve on that. In every herd, there is a genetics programme we can put in place to improve its efficiency.”
On that front, LIC, in partnership with CRV, Pāmu and funding from the NZ Agricultural Greenhouse Gas Research Centre (NZAGRC), are conducting research into low-methane-emitting cows, which is progressing well.
The research has proven there is a genetic component to methane production and there is genetic variation among bulls in terms of methane produced per kilogram of feed eaten. Last year, these bulls were mated with heifers from Pāmu farms with the heifer calves due to be born this spring.
The study will examine the progeny of those sired from both the least and the most methane-efficient bulls. The methane production of those calves will then be measured over the course of their lifetime to see how that trait has been passed on.
“If all goes well, the aim is to produce a methane breeding value and all farmers in the country will have access to low methane elite genetics to improve our carbon footprint.”
The beauty of these cows will be that farmers will not have to alter how they farm as the semen will come with a methane BV, he says.
When that heifer calf is older, and mated again using the semen, its progeny will carry the cumulative impact of that lower methane breeding value.
By 2050, there will be enough generations of cows born from those low-methane genetics that it should start to make a meaningful contribution to the country’s emission targets.
“It’s a long-term game but genetics always has been, and what we like about it is that, yes, it’s long term, but it’s cumulative and it’s permanent.”
It is no silver bullet, but it is a cost-effective, convenient tool that farmers will be able to use to make a real contribution to lowering their emissions, without reducing cow numbers.
Chin says LIC’s climate change mitigation strategy is three pronged: Reducing the intensity of the climate footprint of milk, mitigate emissions using low methane sires, and, thirdly, supporting how farmers will adapt to the new environment where drought and flooding become more frequent.
To that end, LIC was the first to discover the slick gene in cattle that helps improve their heat tolerance. While these animals are available now, it creates a dilemma for LIC because marketing that product now means reductions in efficiency as they are not as genetically superior as the company’s elite bulls.
Chin says the co-op’s heat tolerance research is trying to create a solution where milk production and superiority are retained, so farmers can have their cake and eat it – a highly efficient cow that is also heat tolerant.
He views the national herd like the All Blacks, where NZ has one of the best herds in the world and must be constantly maintaining that advantage.
“I think the dairy industry is in a really good spot to not only maintain that edge but extend that gap.”
NZ’s pasture-based system also gives it a natural advantage over some northern hemisphere systems, particularly with the growing popularity of grass-fed dairy and meat.
“New Zealand dairy is in an exciting position. Yes, there are headwinds, but we have a lot of initiatives already underway to tackle a lot of it, and we have some natural advantages.
“And we’re not playing catch-up. We’re actually at the front of the bunch.”
The co-operative has also seen a big increase in inquiry for beef genetics, fuelled in part by Fonterra’s new rules around non-replacement calves having to enter a value stream as well as the popularity of dairy-beef calves as an alternative income source for farmers.
Those cows not being mated for replacements are inseminated with beef semen, with the calf sold for the dairy beef market.
Chin says this is reflected in LIC’s annual genetics catalogue, which, up until a few years ago, featured predominantly dairy bulls, with beef bulls in the back.
“Now, half of the catalogue is beef bulls. There are more breeds and, quite rightly, we need to turn our focus to how do we source better beef genetics because a lot of these are going to be reared.”
This meant traits such as carcase yield and liveweight gain are now given a lot more consideration than they were a few years ago.
“It’s no longer just, ‘I want a whiteface Hereford’ anymore. We are seeing Charolais, Wagyu contracts, Speckle Park. There’s a lot more emphasis on procuring better beef genetics and what role do we have in helping develop those genetics.”
He says they are doing a lot of collaborative work with breeders such as Shrimpton Hills Hereford as well as working with the Beef+Lamb NZ progeny test project. It is a dynamic part of the work LIC is doing.
Looking ahead, one of LIC’s biggest investments that will unlock further value in the dairy industry is data and digital infrastructure, which the co-op is investing millions into.
This includes creating greater efficiencies with data exchange, as more farmers upscale themselves with technologies such as wearable collars.
“This is how we are going to unlock a whole raft of efficiencies and make farming better and profitable for our farmers.”
The second investment is in genomics and accelerating the research around low methane, dairy beef, and heat tolerant BVs.
“We see a massive amount of gain and ability to make a big contribution to the industry by keeping these initiatives as a core focus.”
Chin has been at LIC for 16 years, having started in 2006. He has held various roles including that of chief transformation officer.
Most recently he was LIC’s general manager operations and service, on the co-operative’s senior leadership team.
He was responsible for LIC’s laboratories, farms and the field teams that deliver services on farm, including artificial breeding, herd testing and the FarmWise consultancy.
LIC is a complex business with several moving parts and having been in such a variety of roles gave him a good grounding for the chief executive role, he says.
The farmer connection, with LIC being owned by shareholders, gives the business a different feel compared to a more conventionally run business.
“How it all fits together is really important. It sets you up well,” he says.
Being asked to lead LIC’s transformation in 2016 played a big role in setting him up to be chief executive.
“It was very successful and was right across the business, taking very much a CEO type of view of how do we get all parts of the business operating.”
The transformation occurred just after the dairy payout fell to $3.90/kg MS.
Chin also held a key accounts role in 2012, which enabled him to talk to large multi-herd operators and hear their views of the dairy industry.
“It was an amazing experience and that was bringing together all of LIC for the benefit of customers and farmers.”
After that, he led LIC’s central North Island sales team, and those two roles gave him experience of the breadth of the business and the value it can provide to farmers.
Chin, along with his wife and three children, lives on a lifestyle block near Cambridge.
“When I’m not thinking about farming during the week, I’m thinking about farming on the weekend,” he laughs.
He is also a volunteer rugby union referee for club and schoolboy games, clocking up 20 years this year.
“That’s a big part of every Saturday for me.”