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Information Nucleus Program - best investment for genetic gain

On 27 November 2012, following questions at the Australian Wool Innovation (AWI) Annual General Meeting, AWI posted a document on their web site summarising reasons why it decided not to fund the continuation of the award-winning Information Nucleus program.

The CRC disagrees with many of the statements made by AWI and has documented these points below by responding to each of the reasons given by AWI for not supporting the Information Nucleus program.

AWI also made mention of a possible alternative program to the Information Nucleus. However, there are no details currently available to objectively assess the possible alternative approach. The CRC and its Participants are very confident that the design of the Information Nucleus program has been optimised to provide the most cost-effective method of delivering genomic information and products to the Australian sheep industry.  The possibility of developing a parallel project to the IN program appears to run the risk of duplication.

The Information Nucleus program has been outstandingly successful in delivering new genetic information and a range of genomic products to the sheep industry.  Industry and producer organisations are supporting a funding application to extend the life of the Sheep CRC, in order to capitalise on the foundation laid by the Information Nucleus program.  Genetic improvement is the best way of improving productivity gain and the information nucleus approach is proving to be an ideal design for cost-effective progress.


AWI Reason for not Funding INF2 - with comments from Sheep CRC in red

  • The project failed to adequately demonstrate a bridge to a commercial outcome.

The bridge to commercial delivery is through Sheep Genetics and these arrangements for commercialisation were established at the start of the CRC. All information on improved genetic parameters is provided to breeders quickly and effectively through Sheep Genetics.

  • There needs to be a consensus on the commercialisation of the outputs of the INF1 and acceptance of them by Industry before moving to immediately fund the INF2.

Pilot projects conducted in 2010, 2011 and 2012 provide an indication of growing industry consensus on the commercial value of the genomic information. The increasing acceptance of the technology by industry is demonstrated by the increasing number of rams genotyped in the pilot projects increasing from 480 in 2010, to 860 in 2011, and 3,000 in 2012.

  • The current cost of $150 per animal genotyped is too high and there is limited evidence that the cost will fall to $50 per animal as budgeted in the INF2 business case.

As predicted, the cost of genotyping has fallen and will be $50 per animal for 2013.

  • The company’s view is that to achieve widespread commercial success of this project the costs of genotyping would need to be in the order of $20.

We are not aware of the details of AWI’s benefit-cost analysis that indicates $20 as the breakeven cost point for genomic testing.
MLA has conducted a comprehensive analysis based on case studies with a range of leading ram breeders to determine the break even cost for using genomic technologies. In the Merino industry, the benefit-cost analysis indicated that breeders could afford to pay over $150 per test and still deliver benefits to breeders and producers.  At $50/test the benefits are clear-cut
New technologies are usually first adopted by leading breeders and the benefits are generally higher for the top breeders as they can sell more rams at a higher price. A lower genotyping cost would indeed lead to a further and more widespread adoption, extending to the multiplier level. Current trends and early results in cattle indicate that the price of genotyping will decrease further towards the $20 level over the next years.

  • The INF2 potential benefits and outcomes were considered heavily weighted towards meat orientated traits.

Analysis of potential benefits from using genomic technologies consistently points to far greater benefits for the Merino sector than for specialist meat breeds. The Merino benefits result from prediction of lifetime wool performance (fibre diameter and fleece weight), reproduction efficiency, resistance to parasites (WEC), breech wrinkle and other visual traits.

  • The adoption rate of ASBVs by the 760 active ram selling Merino Studs remains low (13-15%) and there are only moderate signs of this improving.

The number of Merino studs participating in MERINOSELECT may well be 13 to 15% of the total number of studs. However, it is estimated that these breeders sell around 30% of Merino rams and over 60% of Merino semen and their contribution to the future gene pool is therefore likely to be significant.

  • The adoption rates in the business case for the INF2 appear to be much higher than the recent past suggest are likely and thus also the benefits to industry.

The adoption rates for use of genomic technologies documented in the business case for INF2 already appear to be conservative given the genotyping of 3,000 rams in 2012 and all indications of this number increasing substantially in 2013.

  • Evidence that the adoption of the current genetic technologies will increase significantly is needed to give confidence that the estimates in the business case can be obtained. There are widespread beliefs among many Stud Merino Breeders that there will be limited additional benefits for the Ram Breeding Industry or Commercial Woolgrowers from the INF1’s genomic enhanced ASBVs, let alone from the planned INF2 project.

Evidence from the increasing use of genomics in all livestock industries and the rapid uptake of genomic testing through the Sheep CRC genomic pilot projects indicates that there is already a good understanding of its potential benefits.

  • The INF2 project is long and very expensive. The predictions of increased accuracies from genomic enhanced ASBVs from the current INF1 are yet to be independently peer reviewed and their Industry impact assessed.

There are numerous peer-reviewed publications on the Information Nucleus design (e.g. Animal Production Science, 2010, 50, 998–1003) and on the accuracy of genomic predictions, which is validated with progeny tested industry sires with highly accurate ASBVs. The CRC is willing to provide a list to AWI if required. 

  • On top of the request to fund the very long and expensive R&D INF2 project there are indications that the technology will also require even longer ongoing validation for the technology to remain relevant into the future. It is very unclear who will pay for this ongoing validation, how it will be managed, and the scientific and business need for it.

Maintenance of a reference population is an ongoing requirement for breeding programs using genomic technologies.  New models are required to refine the design of the resource flock and who pays for measurements in the longer term. But this is not different from ongoing sire evaluation schemes. Overall, the expense is easily outweighed by the benefit of genetic improvement of millions of sheep over many years.

  • The arguments for the ongoing validation at a stud level, is inconsistent with:
    • the logic of a single whole Merino genomic association analysis currently being conducted in the Pilot Project 2 and
    • the increased accuracies in the INF2 business case from a whole of Merino analysis. If ongoing validation is needed at the stud level then the logic suggests that there will need to be 4-5 or Merino genomic association analysis sub groups which reduces the numbers in each analysis and the trait accuracy predictions in the business case.

Ongoing validation is essential for any genetic improvement program and improvements need to be implemented where needed. INF2 covers a wide spectrum of available merino genetics and the CRC has analysed the data and planned the INF2 well aware of the variation within and across the various sub groups.

  • There has been almost no formal Industry assessment of the benefits of the INF1 and there has been almost no formal engagement with representatives of the Stud Merino Breeder Associations, yet the business case for the INF2 has ram breeders contributing $1.8M over the five years. There are few Industry champions for the benefits of the INF1 let alone the INF2.

As indicated above, MLA has conducted a formal assessment of benefits through a series of case studies with breeders using MERINOSELECT and LAMBPLAN showing good value for testing at current prices.
Industry assessment of benefits has been through the genomic Pilot Projects and the steady increase of uptake each year (480 -> 860 -> 3,000 rams tested per year) suggests that breeders are finding value in the tests.
The suggestion to have breeders pay for entering rams in the resource flock program has been dropped.

  • There is limited commercial evidence that those breeders using the additional information from Australian Sheep Breeding Values have more profitable sheep than those who do not.
    • there are studs that are not members of MERINOSELECT that rank highly on the dollar indexes in the Merino Bloodline Performance results.
    • the variation that exists between the Merino Bloodline Performance and MERINOSELECT indexes continues to send confused messages to breeders.

This point pertains to ASBVs and is not relevant to the Information Nucleus and its ability to support the development of new genomic products which will deliver productivity improvements to the Merino sector. The Information Nucleus assists in industry understanding the genetic variations and performances of different flocks. There is clear evidence from participating producers and the cost-benefit analysis by MLA that adoption of genomic technologies has delivered increased profitability at farm level. 

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