Making business decisions driven by objectives
MLA & AWI July 19, 2024
Knowing where a business wants to go drives the decision-making process. In a breeding enterprise, this is best written down as a ‘breeding objective’, which can be referred to when making decisions to help ensure the business stays on track. A breeding objective lists the key production goals for traits that are important to a business’ profit drivers and the timeframe in which they can be achieved.
Breeding decisions are long term. A written objective helps maintain direction and prevents business operators getting distracted by fads or wandering in their intention, allows progress to be monitored against goals and supports the sharing of the business’ vision with others (e.g. business partners, employees, agent and broker, classer, etc.).
Build a breeding objective
A breeding objective is a statement that describes the desired mid–long-term direction of the flock, listing the key production goals for traits that are important to a business’ profit drivers and the timeframe by which they aim to be achieved. A breeding objective helps producers stay on track by defining the type of animal that is fit for purpose in light of their profit drivers, that is best suited to their target market and operating environment, and how they manage this animal throughout its life.
Documenting, monitoring and revisiting the breeding objective is the best way to clarify thoughts about what a business is seeking to achieve in an enterprise and what a producer wants their 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 an enterprise’s performance
- helps guide decision making about which traits to focus on to achieve these targets and guides the approach to assessment, classing, selecting and joining each year
- provides a basis to monitor and review progress toward targets and improvements within the breeding program
- provides a basis for information sharing so everyone within the business can work together to achieve common goals. This may include business partners, staff, suppliers, classers and ram breeders. When stakeholders understand the overarching goal, they can better support producers to achieve that goal.
Consider the SMART concept
A breeding objective should be SMART in its construction — specific, measurable, achievable, relevant and timebound.
- Specific means it clearly identifies the challenge or opportunity.
- Having defined targets for future performance means goals are measurable. It is important to know or be able to measure current performance to know where the starting line is.
- Make sure targets are achievable in order to prevent failure from the outset.
- Ensure the breeding objective is relevant by aligning it to the business’ targets, profit drivers and purpose.
- Assigning timeframes to targets will help ensure they do not drift and are achieved.
Source: MLA BredWell FedWell
Avoid including too may traits and targets in a breeding objective as this can reduce 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. Revisit the breeding objective regularly and modify it as required. Take care not to chop and change too much or chase extremes and follow fads.
Identify the traits important to the business
While there is a large range of ASBVs currently available, it is important to focus on the key traits in the breeding objective and directly assess as many of these traits as is economically possible. Consider the business’ profit drivers and what constitutes fit for purpose 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 what the market wants, in other words that they are ‘fit for market’, will help optimise the price received for that saleable product.
Source: MLA BredWell FedWell
One approach is to identify the traits of interest into those that are fit for market and those fit for farm. This can help highlight the traits to select for that make animals fit for purpose.
Key fit-for-market traits that can be selected for using visual assessments or breeding values include 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.
There may not be ASBVs available for all the traits important to a business, so visual assessment can be important for certain traits, such as colour, structure and conformation.
Determine the current status for important traits
After identifying which traits are important, based on a business’ profit drivers, farm and markets, it’s important to understand the current status. Establishing a starting point with respect to the traits of interest is important as it helps:
- set achievable targets for important traits
- make more informed buying decisions
- monitor progress over time.
Monitor environmental considerations and adjust management to optimise these and make the most out of the investment in breeding and genetics.
After confirming the current position, producers can:
- identify and buy better rams.
- confidently compare the impact one ram may have over another in the flock.
Without establishing the current position, it can be hard to identify with confidence the rams that will take the business forward.
Use different methods to work out the current position
There are different ways to assess both the current business performance and the genetic position with respect to ASBVs. These include:
- financial and enterprise benchmarking
- ram team benchmarking
- flock profiling (DNA testing)
- percentile band tables and industry averages.
Financial and enterprise benchmarking
Independent consultants can provide benchmarking services which compare a farm’s financial performance against other, similar livestock businesses. This can help identify what drives profit in an individual business and similar businesses. It can help identify areas where a business is performing well as well areas where there is room for improvement relative to others in the industry.
Module 1 Plan for Success provides more information about business and production benchmarking.
Ram team benchmarking
If the rams in a flock have ASBVs, use this information to calculate an average genetic position for the flock.
When using a ram team average to work out the current ASBV position:
- include all the rams used for joining this year
- use the most recent ASBVs for the rams, remembering these are updated every two weeks (rams purchased, even recently, may have more up-to-date ASBVs than those published when they were purchased because data is constantly being added to the database as more is collected)
- consider the traits important to the breeding objective.
To find the most recent ASBVs for specific rams, search the Sheep Genetics database, or ask the ram supplier for recent ASBVs. Even if ASBVs haven’t been used to select rams, it’s wise to check with the ram supplier as they may have ASBVs available.
The RAMSELECT website can help 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 help find the best ram for a flock by listing rams for sale and providing a ranking service against a breeding objective, which the user can customise.
Flock profiling (DNA testing)
If rams do not have ASBVs flock profiling can be used to establish a flock’s position in ASBV terms.
Sheep Genetics offers a flock profiling service for Merino flocks, where a DNA test is carried out on 20 randomly selected ewe lambs to benchmark the flock against the industry average. Results for a flock are provided as ASBVs.
Flock profiling requires bloodlines to be well linked in the ASBV database to generate accurate results.
Percentile band tables
When working with ASBVs, the most current percentile band tables are needed, which are updated every two weeks by Sheep Genetics.
Percentile band tables show the performance of the current drop of lambs for a trait so the performance of a flock and individual animals can be compared.
If an animal is in the 20th percentile band for a trait it means it is genetically in the top 20% of the analysis for that trait, remembering 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) helps compare an individual to the average of all animals born that same year. For example, if an animal has an ASBV for Yearling Weight (YWT) that is 7.0 and the current average is 5.93, the animal has a breeding value more than a kilogram higher than the average of all the animals in that year’s drop.
It is important to know what the ASBV range is for the trait of interest as this shows the range of performance for that trait and the amount of potential progress. This also helps set achievable targets and select appropriate animals.
Knowing the average ASBV for a given sheep ‘type’ can support a more focused and balanced assessment of the animals available. This helps select the high performers from the current sheep available to purchase.
It’s unlikely to find an animal in a particular percentile band for all the traits. They will be in different percentile bands for different traits.
Remember the top percentiles are not necessarily the best and a positive value is not always desirable. We generally want to push the ASBV in the same direction as we want to move the trait, meaning a more negative ASBV can sometimes be desirable. For example, if we want breed for finer wool, we need to lower fibre diameter, which means focussing on a negative ASBV value. Similarly, we may be seeking to breed sheep with a moderate liveweight meaning those within the highest percentile bands are unlikely to suit our breeding objective. Other examples of a negative ASBV being a desirable trait are shear force (SF5, a measure of the tenderness of meat) and worm egg count (WEC).
Although we can compare the differences between animals and percentile bands using ASBVs, it is important to remember this difference will not necessarily be the exact difference seen in the 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.
Access the most up-to-date percentile bands from the Sheep Genetics website for Terminal, Maternal, Merino and Dohne analyses.
Establishing targets for important traits
After determining what is possible by exploring the range of values within the percentile bands for the traits of interest and calculating a flock’s position, we can establish targets for the traits of most importance.
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 targets at a realistic level in consideration of the budget.
Also consider phenotype and set targets using visual assessment. Remember, we don’t have to aim for the top. Aiming for anything better than the current status and targeting incremental change is progress. A producer may even wish to reduce the focus on some traits while concentrating more on improving others.
Prioritise traits
Not all traits can be valued equally and balanced selection is important.
Focus on no more than five traits when considering which to include in a breeding objective. Too many traits will limit the effectiveness of the breeding program and slow the rate of progress.
When determining which traits to focus on, think about both the importance of the trait to profit and the emphasis required to make progress.
When prioritising the traits on which to focus:
- Consider the impact improving that trait have on the overall enterprise. Will it increase income, decrease the cost of production, or reduce future risk more than other traits on the list?
- Think about the management implications of the correlations associated with the trait in question and other traits on the list.
- Determine the starting position and desired change of the trait, including whether there is an optimum instead of an ‘extreme’.
- Consider the timeframe associated with desired changes for each trait. Some things may be important to achieve quickly while others might have a longer time horizon. It may not be possible to achieve some changes within a desired timeframe due to unintended consequences associated with rapid change. For example, a rapid reduction in wrinkle can affect fibre diameter.
- Consider whether there is a breeding value that directly improves the trait that selection can be made on or whether indirect selection methods are required.
Source: MLA BredWell FedWell
Achieving the right balance when prioritising traits and documenting this in the breeding objective can help the business stay on track. We 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.