Welcome to the Select Sires Podcast talking Your Success, Our Passion, starting in 3-2-1.
Joel Penhorwood
Thanks for tuning in. Today we're listening into a great conversation on the power and importance of genetics. It's a chat with Justin Stewart of Arizona Dairy Company. He and his family have made considerable strides in the way of genetic investment
on their farm in recent years. Lyle Kruse, vice president of U.S. market development at Select Sires will help take us further in depth with that discussion. Justin is a member of the NxGEN program at Select Sires, and he'll tell us a bit
more about his experience with that later on. First though, let's hear a quick overview of NxGEN in today's highlight of the podcast with Jordan Siemers. Jordan?
Jordan Siemers
Hello, this is Jordan Siemers, Holstein sire analyst here with Select Sires, excited to share with you about our exciting NxGEN program. Here in the last high ranking TPI female report, March 2022, nine of the top 10 TPI females in the breed,
were sired by NxGEN semen. So far, so good. We're very excited about the future of the program. And we thank those members who have joined and have used the program to the greatest success.
Joel Penhorwood
Thanks, Jordan. More on the exciting NxGEN lineup, and details on the program, online at www.selectsires.com. Today we're discussing genetic investment, and to help tell that story, I'm happy to welcome Lyle Kruse to the podcast. Lyle's going
to introduce today's esteemed guest. Lyle, it's all yours.
Lyle Kruse
Yeah, thank you, Joel, and I just want to give you a little background. I've had the opportunity of working with Justin Stewart and his team there at Arizona Dairy Company now for probably six or seven years. Since I've moved to Arizona, I've
gotten to work closer with them. Just a tremendous family, tremendous operation, and I love the story of how Justin came to really emphasize genetics more in their operation. And dairying in every region is different, but the bottom line is
there's opportunity genetically for everybody to put more focus on what they're doing to make more profitable cows. And Justin I think has got a pretty unique story, but just some background on the dairy, maybe the history of the dairy, and
then your involvement as well.
Justin Stewart
Sure, Lyle, thanks for that nice introduction. Well, just me Justin Stewart. I'm technically a first generation dairy farmer. But my family and my father-in-law built our dairy company back in 1973, and with his brother, has been in business since
then, I guess next year, if we're still in business, and we're lucky enough, we'll have our 50th anniversary. But they started out relatively small like most dairies do and grew the company. Built it up to about a herd, let's see, once I came
on board, I pushed it a little bit more, and then about 15 years ago, but we grew the herd to about 7,000 cows, and about another six to 7,000 replacements on site. So we peaked out around that 14,000 head mark and quickly realized we didn't
have enough room, so we just downsized a little bit more. And actually currently we are in a much bigger downsizing phase and moving the entire operation. So we're going to go from currently about 6,000 cows to 3,200 cows and relocate about
85 miles west of here where we're at, because the city has rapidly encroached on us, and we can't really dairy in the city, no place to go with your manure and don't have any place to grow your feed. So that's basically it. I am lucky enough
to dairy farm with my family. And my wife's two sons, Dustin and Denton, help me tremendously on a day-to-day basis. So, we all basically meet once or twice a week with our wives, the six of us continue to kind of check all the boxes and look
over everything.
Lyle Kruse
Just to give the audience a little perspective, you're located basically in the middle of Mesa right now, which is, you know, in the greater Phoenix area, and one of the more populated metropolitan areas now in the country. So it's pretty amazing
when you drive into Mesa and find where your current dairies located, and just how much development’s occurred around you. So I certainly get the move and commend you guys for your new operation you’re going to have out at Gila
Bend.
Justin Stewart
Yeah, the old farm, the old dairy here, we used to be surrounded by farms, about 5,500 acres and, and milk about, you know, 5,000 cows in the late 80s. And that's kind of what grew up to where it was at and then obviously growth and everything
in town. Houses started encroaching. You can't stop growth. So we decided early on we better start planning to move out of town, and we purchased a farm out near the location. So we currently farm 2,700 acres now, and out near the new location,
so that'll help to get the cows closer to the feed, which is always more efficient.
Lyle Kruse
I also marvel at the genetic development in your operation, especially today with where your herd's at, and maybe where you've come from. Can you talk about that evolution since you've been involved? Last 40 years, 30 years?
Justin Stewart
Sure. A long, long time ago, we used to do a lot of genetic stuff before me, but they got out of it through attrition and through change of management here on the dairy. And when I came on board, after I married my wife 26 years ago, and started
slowly creeping into the agricultural side of our family operation. We used to brag, and I was pretty proud of it back then too, but we used to brag about, you know, paying so little for semen. And honestly, at a large dairy, we are all able
to whittle down that price because of bulk purchases. And we whittled down our price to about $3.50 per straw of semen. And I just remember bragging about that, oh, well, I only pay $4. You probably pay another five you other big dairymen
out here. We were all proud of that. After I really started being on site day to day, I realized, and looking at all the numbers, and most western dairy managers are good number people, and we started to do the calculations. I quickly realized
our numbers weren't as good as they should have been. Our cows weren't producing enough milk. They were getting pregnant, and so I attributed that to DPR. But we weren't putting the milk in the bulk tank. So that was kind of an eye opener
for me. We were feeding a lot of cows, and we were making a lot of manure, but we weren't getting the paycheck I felt like we should be getting. And so we went down the genetic path. Kind of an interesting quick story there on that, I wanted
to change, we all wanted to change, my family and I wanted to change the genetics and my vet, our consultants are on site with us so often, as you are Lyle, and my vet said to me one day, why do you want to spend more money for semen? You're
not getting the genetic potential out of your current animals on site. I was like, ouch. That hurt. I was like well, okay, you may be right, but there's something different about our cows that stand out. So I did some math over the next couple
of weeks, and that sort of still was stinging that comment. And I said, well, I took the top 10 percent of every single lactation of our cows. And I said, well, why do these 10 percent these girls here milking, first lactation, second, third,
fourth, fifth, all the way up to the 10th 11th lactation. Why did they stand out? Why are they better? Mr. Dr. Vet, boy, why? I said the only thing we can point back because they had the same treatment, the same milkers, the same feed, the
same heat that we get out here, the same cooling, everything, but these particular animals stand out. And so it was an eye opener for me and for him. And the only thing left to point to was, it's their genetics, they're genetically superior
than the rest of the herd. So something went right with their DNA. And I had an epiphany back then, and we all felt like wow, this is interesting, because we want more of those girls. Those are the ones that we want to replace, not the ones
that aren't milking. So we kind of dove in headfirst with the genetic game then, and I convinced my vet to agree with us. Of course, he didn't have too much say in it, but I wanted him on board. And we quickly got away from spending $3.50
for semen, and started going, instead of the back page, we started purchasing the front-page bulls. And the best combination of bulls that we felt like we needed and where we lacked and how do we know what we needed? Well, we also started
purchasing and doing DNA testing and doing genomics. And so when we dove in headfirst that started getting a year behind us, we quickly realized what we lacked. And I'll be darned if the thing that most stood out to us was we had a tremendous
average, high average, of DPR - Daughter Pregnancy Rate. So well the opposite correlation of DPR is what, Lyle?
Lyle Kruse
Low milk.
Justin Stewart
And that rang true to us, and so that kind of helped us point the ship in the right direction of ah, okay, more milk, we need less DPR, and maybe our girls will milk a little bit better, maybe we'll put a little bit more milk in the bulk tank.
And yeah, they'll still get pregnant. And yeah, we still want that reproduction possibilities, but let's not give up DPR but let's get more milk. And so through about 25,000 DNA tests we've started to kind of pull on that and look through
what we wanted to breed and those bulls and clearly what happened was Select Sires came to the top. They said, hey, you know what, there's some really good bulls over here, and everyone kind of pointed us to Select Sires' direction honestly
because we were with some competitors out there that I won't name. So we quickly switched over, so it was it was quite nice. I can go on on that topic, at the same time not only did we start DNA testing, a couple years later, we decided to
go ahead and build our own on-site IVF (in vitro fertilization) lab and in fact, do OPU's (ovum pick-up) on site and do our own IVF, our own fertilization on site. We had purchased some embryos and that genetic change, and started to see the
results of those animals, because as you well know Lyle, once you make the decision to purchase an embryo or purchase that straw of semen, a month later comes by and you've finally implanted that semen or that embryo and the timing is right,
and then nine months after that the calf is born, and by golly, you're two years later till you see that first drop of milk back. So we're basically three years in until we see the first drop of milk back, and then you get to see the results
of that calf and that decision and even get into the second lactation, well you so now you're four years out. So we really wanted to step on that gas pedal quick, and we felt like doing IVF on site, and implanting fresh embryos was the best
way.
Lyle Kruse
Justin, that was great information, and I know that you've been using the IVF program to some degree since I've worked with you probably the last five years, probably at some extent or another. I'm curious today, based on pregnancies in the last
year, do you have an estimate of how many embryo calves you've had born?
Justin Stewart
No, I don't have it off the top of my head. But I would guess it's in the range of about two to 3,000, maybe.
Lyle Kruse
Yeah, I was thinking it could be 10 to 15 percent of your calves born each year, now, maybe more. So that's a pretty impressive number, and basically what we're using genomic data for is to determine which animals are recipients and which ones
are donors, correct?
Justin Stewart
That's correct.
Lyle Kruse
It's primarily heifers that you're doing both with.
Justin Stewart
Yes, primarily heifers. And when we got the IVF lab going and got it tuned up, it was quite an investment, number one, but today, obviously we've seen the results. And when you walk those two-year-old pens, and you see those girls just come in
their lactation, you know, 60, 90 days, it's extremely impressive to me, because they don't look like our girls from yesterday. They don't look like the girls from 10 years ago, and we just have much better feet and legs. We have much better
udders and the front end capacity's much better and bigger and they're more robust, and quite frankly, they milk better and their butterfat is higher and the protein's better. I mean, it's everything. And so once we got to see a little taste
of that we decided to step on the gas pedal a little harder. And we run about 40 donors a week through our IVF Lab, which for a large dairy, that's probably just on the edge of really what we need to do, and based on embryo production, and
you know those heifers production, it's about right.
Lyle Kruse
Yeah so your current strategy, I've heard you use the term uterus real estate. And so I think that's a lot more where we're seeing the industry potentially go is a more strategic purpose for every pregnancy with the focus of most profitable option
with each pregnancy. So you've probably been doing that a little bit ahead of the industry in reality, but you do a fair bit of strategic planning with embryo sexed semen, conventional semen and beef.
Justin Stewart
That's correct, yep, we use a little bit of all of that in our herd and some of those embryos, those fresh embryos - we've seen the conception results throughout our hot summers here in Arizona, that just beat the socks off of regular conventional
semen or sexed semen in our cows. And I'm not talking just our heifers. The heifers are pretty consistent throughout the year, as most would think and know, but when you start stepping up and putting embryos in cows, then that's a little different
ballgame and when we can see it year over year or summer over summer outweigh the sexed semen or the conventional semen, that's impressive. That means those embryos are good. How much is a pregnancy worth in the summer?
Lyle Kruse
Well I wanted to just circle back to your observations on the genetic investment you've had, and a payback, if you will. I know we've done some data analysis on that front. What were your impressions of some of that?
Justin Stewart
Well, it once again, it comes back down to where we used to be and where we are today, and that really boils down into milk. And obviously, we can't forget we're a dairy, so our main income is focused on milk flow, and butterfat and protein. And
so that's where I'm going to point back to again, that's the easy one. But what comes with these better genetics and what we see is how long that cow lasts and how good does she look, and how youthful is that udder in her third and fourth
lactation. That's what we are starting to enjoy and see.
Lyle Kruse
And I was specifically thinking about some of the quartile analysis looking at GTPI rank for the individuals and the survival level of the second and third lactation cows that rank higher versus lower, it was pretty amazing.
Justin Stewart
There's a huge difference right there when you put it on paper, and you see that genetic difference in the lower quartile of genetics and compared to the higher quartile of genetics on every category.
Lyle Kruse
Well, you know, one other thing that you were first in line, if you will, or one of the first herds, was our NxGEN program. A bit about that decision to be part of that and what you're seeing with some of the early success from that program.
Justin Stewart
NxGEN allowed us to have the first bite at the apple, if you will, or at least be in line to have the first bite at the apple on those early release bulls. And to try to prove them out and to see what they're going to look like as milking daughters.
So that's the benefit of NxGEN, and obviously using the team that surrounds NxGEN has been very beneficial to us, and the advice that comes with that. Obviously, because everybody in the NxGEN program wants to make the next neat daughter,
high daughter, or high bull, and so if you get to have access to that early semen, then you kind of have first crack at it, which is kind of nice.
Lyle Kruse
I know some of your early daughters are milking now from NxGEN. Have you noticed anything specific about those groups that you like?
Justin Stewart
Yeah, it's the udders, they're high, they're wide. I like to paraphrase a quote, they're higher than Willie Nelson, you know. I think I heard that quote at Madison one year, and I just I've never forgotten it. The cows are long as a train and
the udders are wide and they're perfect. You know, the NxGEN kind of helps us get that step in the right direction for early stuff, right? And so like I can think off the top of my head. 14HO15223 CONWAY is a fabulous NxGEN bull that we used
a lot of and, you know, I think some of our highest TPI daughters. We mostly use TPI as a guideline, not necessarily Net Merit. We're more Type focused, I would say, getting away from some of the other components. I think they're all kind
of merging a little bit, but we use primarily TPI, and so when you are lucky enough to hit the lottery, which I feel like we have, and have something over 3,000, or, you know the 7HO15167 GAMEDAY daughters, the CONWAY daughters, the heads,
they're just absolutely gorgeous. Even when they hit the ground and you see them at days, you know, 30 or 40 or 50. You're like, oh, yeah, okay, that's what they look like. And then they develop and get them pregnant again, and they're getting
pregnant for the first time and see them milking, that's quite impressive.
Lyle Kruse
Thank you, Justin, I have a couple more questions, and then we'll let you get back to your very busy day I'm sure. I probably should have started earlier with this question, but just to help us get a vision for what you view as the perfect cow,
what are some things you're looking for in your next generation or as you try to refine your genetic development?
Justin Stewart
Yeah - longevity. We all want that. Those good feet and legs. I think we have a little bit of work to do there on better feet and legs. But what my perfect cow is that perfect udder, that high, wide, youthful udder with good center support, and
with a good frame in front of that, and obviously our pay is solely based on the milk flow, and of course the butterfat and the protein. The protein is hard - we're in a market out here in Arizona, where Coca-Cola and Fairlife have built a
plant out here and so they're focused on protein. And so we always like to breed for those cows with that higher protein level, so my perfect cow is high butterfat and protein, good feet and legs and a spectacular udder that lasts a long time.
That seems sort of like a generic answer, but honestly, it's the truth. And then when they can get into that third and fourth and fifth lactation and beyond, then to me, that's just that perfect cow.
Lyle Kruse
Well, I'm headed down the path - we already talked about NxGEN and some of the early successes, we talked about your perfect cow, Justin, and I ask you about how much feed efficiency might factor into your decisions in the future at all, as we
get more and more information in that, and feed costs continue to be a challenge.
Justin Stewart
Yeah, feed costs and feed efficiency is certainly on the forefront of what we want to breed for and make that next step towards that perfect cow, especially with feed costs doing what they've been doing lately, it's almost paramount that that's
a big deal in our breeding proforma and what we picked for bulls. We don't measure the feed exactly per cow, so it's really hard to tell, but I'm sure those feed efficient cows, you know, they can be real big, but not eat as much, right? So
we would definitely be breeding for that when it comes.
Lyle Kruse
And frankly, it's in the TPI formula already, so you're probably utilizing it to some degree with that.
Justin Stewart
Oh, absolutely. Absolutely.
Lyle Kruse
So you know, you work closely with Steve Faber from COBA/Select Sires. Just a little bit about your Select Sires team you work with and what they do and provide that you see value in?
Justin Stewart
Well, Steve Faber is bar none one of the best guys I've ever met in my life. He's become a good friend, he's become a trusted resource for us. And just a gem of a person, a prince of a man, I would say, and all that led to, you know, opening the
door to Select Sires, for me, as having that trusted source there. And then obviously, that led to you Lyle and Kevin Jorgensen and the rest of the Select Sires teams over there. There's a lot of data that you guys study, I'm not privileged
to, or don't have the time to look at, and to have the Select Sires team do that for me and maybe bring something to light or put it in front of me and say, hey, you might want to look at this and try this or that. It's impressive, it's good
to know that they're on the team for us collectively as a functioning business and that they're not just out for that almighty dollar, but to work together with us. And so not only they're a good team, but when you can pick them as your friends,
and you can do something later with them outside of the dairy because the dairy is a grind, as we all know, and it's day-to-day, every day. And when you get an hour, you don't mind having, breaking bread with that person. So that's been the
nice part about my team and the team closest to me, is they're really good people. And obviously Lyle that includes you. I'm honored to be around you.
Lyle Kruse
Well thank you, that's very complimentary. And I'll pass along to Steve, that you didn't say any disparaging words about him.
Justin Stewart
Well you can if you want to, it's always good.
Lyle Kruse
So a little bit about the goals of your operation in your new facility. What are some things you're going to be monitoring close in the next year?
Justin Stewart
Yeah, we'll be monitoring, obviously, the milk flow. The facility's a gorgeous facility built about 12 years ago. So by virtue of it being a better cooling facility for the cows, more comfort, we'll be able to really care for those animals, but
looking for obviously higher milk flow throughout the summer, and better reproduction throughout the summer. We'd always like to pick up a percent or two or five or 10 when we can and I think this facility should lend itself to that quite
well. And then would really like to increase that protein and butterfat. You know, right now I think we basically average around a 3.7 to 3.8 butterfat with a 3.3 to a 3.4 protein, when that protein side's harder to feed for as some dairymen
know. And it's mostly in the genetics. I'm a Holstein guy and will probably always be a Holstein guy, and some of the herds out here like to blend that milk with some of the Jerseys and higher butterfat and protein, and that's a good thing
too, but I'm going to stick with all black and whites or red and white Holsteins for sure.
Lyle Kruse
You've got a very good perspective on the business. You talk to a lot of people. You go to some things across the country. I'm just curious if you have some thoughts on industry trends you're starting to see surface that we should be considering
keeping in front of us.
Justin Stewart
Things we should keep in front of us, probably, you know, in Arizona, I would love to see that heat tolerant gene coming. Would always be neat to see something that can tolerate a little bit more higher temperatures in these warmer climates. And
I think they're studying that, but I think that'd be a nice thing to see coming in the future. You know, Florida and New Mexico and Arizona, Southern California, we get hot. And if you have some of that bred into your cows, maybe it wouldn't
be so drastic and hard on them if they had less hair.
Lyle Kruse
I think we're going wrap it up here, Justin. I really thank you very much again for your time today.
Justin Stewart
Oh, you're very welcome Lyle and Joel. It's nice to meet you. And yes, if I ever get to Ohio and get a break off the dairy from this big move, I'll make sure I look you up.
Joel Penhorwood
I just want to say what a pleasure it was just to be a fly on the wall for this conversation. Both of you, thank you so much for what you guys do and thanks for having this great back and forth that was a great experiential learning time
here just to hear from what you guys have done, and what exciting things are ahead for the future. So we'll stay tuned for more from Justin Stewart of Arizona Dairy Company and that's Lyle Kruse, vice president of U.S. market development for
Select Sires Inc. I'm Joel Penhorwood on the Select Sires Podcast. Thanks for tuning in.