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How Farmers Milk Cash From The Cow Gene Industry

Economy
How Farmers Milk Cash From The Cow Gene Industry

There’s money to be made in all areas of life – and buying and selling show cows is no stranger to cash and heavy competition. Farmers, breeders and investors have made a living from buying and selling cows. Before Silicon Valley incubators and software venture capitalists, some keen investors have kept their wallets close to the farming business, and for good reason: some show cows are worth over a million dollars.

We all know about horses and the monetary value they can bring to a breeder. We’ve heard of the dog shows and their cash prizes. But why cows, and specifically dairy cows? Yes, dairy cows produce milk and the residual value on milk production is profitable, but the real profit is in the buying and selling of cows and their embryos or semen.  Farmers can sell cow embryos or semen for $500-$1000 per sample. Some cows are worth more as embryo and semen producers than milk producers, and farmers typically keep these cows for breeding. When farmers want to sell a cow instead of its embryo or semen, then they can sell it on the market for as low as $2,000 or as high as $200,000.

Marketable Commodity

In the 70s and 80s, embryo transferring gained in popularity. Prior to the 70s, embryo transfers required surgery. Once non-surgical methods were discovered, embryo transferring in cattle became a full-fledged business. Using a methodical process, cow embryos (generally frozen) are classified on a four-grade scale and gently transferred. The process, when using experienced technicians, has a moderate-to-high success rate.

Cow_and_calf

When farmers buy or breed several cows, which are sometimes referred to as a program, they look for several factors including ease and probability of reproduction. Older cows or broken mouth cows (cows that are starting to lose their teeth), are often sold on the market for a few hundred dollars. These cows can no longer reproduce.

Building a Winner

The easiest way for a cow to attract the attention of other farmers or investors is to win a contest. These contests are generally typical barn contests held in local rodeo expos, but if a cow can string together a few wins, they can gain significant recognition among their local circles and national network  thus driving up their value from $1,000 to as high as $40,000.

At a glance, these contests all appear to be small time, square dancing farmer contests reminiscent of something out of a “Babe” movie. But behind the hay and apple pie is a stiff competition riddled with rules, testing, cheating, steroids, and a couple of thousand dollars to sweeten the deal.

But cash prizes are typically small, and a first place prize can barely cover entry expenses. Once a cow has won enough on the local circuit, the national and international big shows are next. Recognition is what is really at stake, because Supreme Champions are not just crowned internationally, they are also now so credible that they can sell their embryo and semen for 50 times more than they did prior to their win.

Top Contests

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There are thousands of expos, road shows, and local contests that award dairy cows champions – all of which generally evaluate the same criteria. Large shows, like the World Dairy Expo, are among the most sought after. Farmers, breeders, and investors from across North America attend, and the event attracts an average of 60,000 to 70,000 registered attendees plus big name sponsors such as John Deere.

The 2011 World Expo winner, named Missy from Ponoka, Alberta, is considered to be the world’s most valuable and famous cow. She was owned by Morris Thalen, two other investors, and Mark Butz, owner of a cattle genetics firm in the US. Missy has won over a dozen titles and to-date is worth over $1.2 million. Missy was recently sold to a Danish investor.

Judging

Holstein cows are the most popular at dairy contests. They are known for their famous white and black color, and are regarded as the world’s highest production dairy animal. Originally from the Netherlands, Dutch farmers artificially bred the cow using a thorough selection process that eventually led to a high-producing, black-and-white dairy cow. Holstein cows have been awarded the title of Supreme Champion more than any other type of cow.

Dairy cows are judged on several criteria, which include: appearance, cleanliness, grooming, clipping, condition, exhibitor, leading, posing, and even attitude – yes, attitude. There are strict rules that prevent breeders from enhancing the cow’s appearance, such as painting the cow or feeding it steroids prior to the show. However, breeders are always looking for an edge even if it means super gluing the cow’s teats to prevent leakage and keep the udder swollen.

Cows need to be milked every day, except for on show-days. On show-days, cows are intentionally not-milked to swell the udders. Swollen udders and equal sized teats score higher appearance points. Teats cannot be swelled using foreign substances. When the stakes are this high, gaining an edge can come at an interesting cost.

Farming is an industry, and like most industries, it has its own quirky nuances. However, despite the apparent oddness of the industry, the driver at the root of the business is still the same: people are looking for an edge to help themselves get rich. There is no industry or sector, even in health, environment, education, and farming, that is impervious to the evident manifestation of business savvy and opportunity.

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