Chapter 9.4 Business decisions are driven by objectives
Background information
Knowing where you want to go drives the decision-making process in any business. In a breeding enterprise, this is best written down as a ‘breeding objective’ which can be referred to when making decisions to help ensure you stay on track. A breeding objective lists the key production goals for traits that are important to your profit drivers and the timeframe in which you aim to achieve them.
Breeding decisions are long-term. A written objective can help you maintain direction and not be distracted by fads or wander in your intention, allows you to monitor your progress against the goals you set and more easily share your vision with other people you work with (e.g., business partners, employees, agent and broker, classer, etc.).
At a glance
- A breeding objective which aligns with your profit drivers helps you keep on track for the long term.
- Breeding objectives should be specific, measurable, achievable, relevant and time bound (SMART).
- Know your current position.
Build your breeding objective
A breeding objective is a statement that describes where you want to take your flock in the mid-long term, listing the key production goals for traits that are important to your profit drivers and the timeframe in which you aim to achieve them.
A breeding objective helps you to stay on track by defining the type of animal that is fit for purpose in light of your profit drivers, that is best suited to your target market and operating environment, and how this animal will be managed throughout its life.
Documenting, monitoring and revisiting a breeding objective is the best way to clarify your thoughts on what you’re seeking to achieve in your enterprise and what you want your sheep to be like in a 5–10-year timeframe. A breeding objective:
- Identifies clear, long-term targets that affect profitability, productivity and welfare and therefore enhances your enterprise’s performance.
- Helps guide your decision making about which traits to focus on to achieve these targets and guides your approach to assessment, classing, selecting and joining every year.
- Provides a basis to monitor and review your progress toward these targets and improvements within the breeding program.
- Provides a basis for information sharing so that everyone within your business can work together to achieve common goals. This may include your business partners, staff, suppliers, classer and ram breeder. They know what you are aiming to achieve and they can then help you get there.
Consider the SMART concept
A breeding objective should be SMART in its construction. That means it is specific, measurable, achievable, relevant and timebound.
- Specific means it clearly identifies the challenge or opportunity.
- Having defined targets for future performance means your goals are measurable. You also need to know or be able to measure your current performance so you know where you’re starting from.
- Make sure your targets are achievable. Don’t set yourself up to fail.
- Ensure your breeding objective is relevant by aligning it to your targets, profit drivers and purpose.
- Assigning timeframes to targets will help ensure they do not drift and are achieved.
Avoid including too may traits and targets in your breeding objective as this can reduce your focus on the most important traits. Concentrate on the economically important traits and allow 5-10 years to make significant progress against defined targets in these areas.
It is important to be responsive and flexible. Your breeding objective should be revisited regularly and modified as required but be careful not to chop and change too much or chase extremes and follow fads.
Identify the traits important to your business
Remember, there are a large range of ASBVs currently available but in practical terms, it is advisable that you only focus on the key traits in your breeding objective and directly assess as many of these traits as is economically possible. Your profit drivers and what constitutes fit for purpose (see chapter 9.1) should be the key consideration when prioritising traits.
Matching the right kind of animals, as defined by particular traits, to the environment and the management system (that is fit for farm), will go a long way to optimising the production of kilograms of saleable product and in turn profitability.
Making sure these animals produce is what the market wants, in other words is “fit for market” will help optimise the price received for that saleable product.
One approach is to identify the traits of interest into those that are fit for market and those fit for farm. This can help you identify traits to select for that make your animals fit for purpose.
Key fit for market traits that can be selected for using visual assessments or breeding values including growth, carcase, eating quality and wool trait groups.
Fit for farm traits can also be grouped into reproduction, growth, carcase and health and welfare trait groups, with other traits such as feed use efficiency and methane coming soon.
There may not be ASBVs available for all the traits that are important to you and you may need to rely on visual assessment for certain traits, such as colour, structure and conformation.
Determine where you currently sit for important traits
Now that you have identified which traits are important to you based on your profit drivers, farm and markets, it’s important to understand where you currently sit. Establishing a starting point with respect to the traits of interest is important as it helps you:
- set achievable targets for important traits;
- make more informed buying decisions; and
- monitor progress over time.
Environmental considerations should also be monitored and management adjusted to optimise these and make the most out of your investment in breeding and genetics.
When you know your current position, you can also:
- identify and buy better rams; and
- confidently compare the impact one ram may have over another in your flock.
If you don’t know your current position, it can be hard to identify with confidence the rams that will take you ahead.
Use different methods to work out your current position
There are different ways you can assess both your current business performance as well as your genetic position with respect to ASBVs. These include:
- Financial and enterprise benchmarking
- Ram team benchmarking
- Flock Profile (via DNA testing)
- Percentile band tables and industry averages
Financial and enterprise benchmarking
Independent consultants can provide benchmarking services which compare your farm's financial performance against other, similar livestock businesses. This can help you identify what drives profit in your business and similar businesses. It can help you identify areas where you are performing well as well areas where there is room for improvement relative to others in the industry.
You can also benchmark your own business and production using the information in tool 1.10 in MMFS Module 1 Plan for Success.
Ram team benchmarking
If the rams you use in your flock have ASBVs, you can use this information to calculate an average genetic position for your flock.
When using a ram team average to work out your current ASBV position, make sure you:
- include all the rams used for joining this year;
- use the most recent ASBVs for your rams, remembering these are updated every two weeks (rams that you purchased, even very recently, may have more up to date ASBVs to those which were published when you purchased the ram because data is constantly being added to the database as more is collected); and
- consider the traits that are important to you.
To find out the most recent ASBVs for your rams, you can search the Sheep Genetics database (see signposts). You can also check the sales catalogues for the ASBVs for rams purchased recently or ask your ram supplier for recent ASBVs. Remember that ASBVs change over time as more data becomes available so ensure the information you are using is as up to date as possible.
Even if you haven’t been using ASBVs to select your rams, it’s wise still to check with your ram supplier as they may have ASBVs available for your rams.
RamSelect is a website that can help you with ram team averaging via the My Ram Team Tracker function. This provides a place to keep a record of which rams are used and provides summaries for important traits in the ram team over time.
RamSelect also provides an online platform to assist in finding the best ram for a flock by listing rams for sale and providing a ranking service against a breeding objective that can be customised by the user.
Flock Profile (via DNA testing)
If your rams do not have ASBVs you can establish your flock’s position in ASBV terms by flock profiling.
Flock Profile is a service offered by Sheep Genetics for Merino flocks where a DNA test is carried out on 20 randomly selected maiden ewes to benchmark the flock in ASBV terms against industry percentiles.
Results for your flock will be provided as ASBVs.
Flock Profile requires bloodlines to be well linked in the ASBV database to generate accurate results. If you are unsure if flock profiling will work for you, contact Sheep Genetics to discuss your options.
Percentile band tables
When you work with ASBVs, you’ll also need to use the most current Percentile band tables, which are updated every two weeks by Sheep Genetics as new data is reported and analysed.
Percentile band tables allow you to quickly and easily benchmark where an individual sheep sits compared to industry for traits and indexes. An example Sheep Genetics Percentile Band Table for the Merino Analysis is shown below.
Percentile bands are found on the Sheep Genetics search site and can be customised to show your traits of interest. When looking at percentile bands and comparing them to an animal’s ASBV, it is important to use the analysis type you’re interested in (e.g., Merino, Maternal, Terminal, etc.) and analysis date to make sure it’s the most recent version.
If an animal is in the 20th percentile band for a trait it means it is genetically in the top 20% of the current drop for that trait, remembering that this value may be positive or negative depending on what is being reported.
If an animal is in the 80th percentile band, then it is in the bottom 20% genetically meaning 80% of animals in the analysis have a better breeding value for that trait.
The average (50th percentile band marked in grey in the example above) helps you to compare an individual to the average of all animals born that same year. For example, if you have an animal with a Post Weaning Weight (PWT) ASBV of 6.5 and the current 50th percentile is PWT ASBV 5.25, the animal has a breeding value more than a kilogram higher than half of all the animals in that year’s drop.
It is important to know what the ASBV range is for the trait you are interested in as this shows the range of performance for that trait and how much progress you may be able to make. This also helps you set achievable targets and select appropriate animals.
Knowing the average ASBV for your sheep ‘type’ can help you make a more focused and balanced assessment of the animals available to you. This helps you to pick the high performers from the current sheep available to purchase.
On the Sheep Genetics search site animals that are in the top 5, 10 and 20% for the analysis for that trait are highlighted based on the Percentile table.
It’s unlikely you’ll find an animal that is in a particular percentile band for all the traits. They will be in different percentile bands for different traits, so it’s important to know which traits are important to your breeding objective.
Remember that the top percentiles are not necessarily the best and you don’t always want a positive value. You generally want to push the ASBV in the same direction as you want to move the trait, meaning a more negative ASBV can sometimes be good. For example, if you want breed for finer wool, you need to lower fibre diameter (FD) which means focussing on a negative ASBV value. Other examples of negative ASBVs being desirable traits are shear force (SF5, a measure of the tenderness of meat) and worm egg count (WEC).
Similarly, you may be seeking to breed sheep with a moderate liveweight meaning those within the highest percentile bands are unlikely to suit your breeding objective.
Although we can compare the differences between animals and percentile bands using ASBVs, it is important to remember that this difference will not necessarily be the exact difference you see in your flock. This is because of the non-genetic factors that also influence the expression of the trait such as birth type or nutrition, as well as the contribution of the ewes to the flock’s genetic performance.
Establish targets for important traits
Once you understand what is possible by familiarising yourself with the range of values within the percentile bands for the traits of interest to you and have calculated or assumed your flock’s position, you can establish targets for the traits of most importance to you.
You should also consider budget when setting targets. Rams in the higher percentile bands are likely to attract more competition and be more expensive than those with more moderate performance. Set your targets at a realistic level in consideration of your budget.
The phenotype also requires consideration and targets should be set using visual assessment. Remember, you don’t have to aim for the top. Aiming for anything better than where you are and targeting incremental change means you’re making progress. You may even wish to reduce the focus you put on some traits while concentrating more on improving others.
Prioritise traits
Not all traits can be valued equally and balanced selection is important.
When considering the traits you want to include in your breeding objective, it is recommended that you focus on no more than five traits. Too many traits will limit the effectiveness of what you are doing and slow the rate of progress.
When working out which traits to focus on, think about both the importance of the trait to your profit and the emphasis required to make progress.
Some considerations to help with prioritising which traits on your list to focus on can be:
- What impact will improving that trait have on your enterprise? Will it increase your income, decrease the cost of production, or reduce future risk more than other traits you have?
- How will you manage the correlations associated with the trait in question and other traits that are important to you?
- The starting position and desired change of the trait, including whether there is an optimum instead of an ‘extreme’.
- The timeframe associated with desired changes for each trait. Some things you may want to achieve quickly while others have a longer time horizon. You may not be able to achieve some changes within a desired timeframe due to unintended consequences associated with rapid change, for example, a rapid reduction in wrinkle may affect fibre diameter.
- Is there a breeding value that directly improves the trait that selection can be made on or are you having to rely on indirect selection methods?
Achieving the right balance when prioritising traits and documenting this in your breeding objective can help you stay on track. You may wish to maximise wool production or growth rates, for example, but this needs to be balanced with micron or lamb survival. Optimising, rather than maximising, production is about getting the balance right.
When investing in genetics, feeding and management must be appropriate to realise the potential of that investment.
SIGNPOSTS
This video discusses how genomic evaluation has been a game changer for the genetic evaluation of livestock.
Sheep Genetics is the genetic evaluation service of the Australian sheep industry. Sheep Genetics help you breed or buy animals using Australian Sheep Breeding Values (ASBVs) through LAMBPLAN and MERINOSELECT and produce tools and information to help you breed better animals.
A one-day workshop to increase skills and awareness in breeding for flystrike resistance.
A practical, one-day workshop highlighting the key production benefits of superior genetics, plus feed management for improved reproductive performance and livestock productivity.
