New DNA breeding technology is being launched overseas as demand from Kiwi farmers outstrips expectation, says listed animal and farm improvement co-operative LIC.
Speaking at the annual meeting yesterday, chairman Stuart Bay said the company had achieved the greatest revolution since artificial breeding was introduced in the 1950s.
"The cumulative effect to the dairy industry will be measured in the billions of dollars in years to come."
LIC's (Livestock Improvement) genomic selection process picks bulls based on their DNA, compared with a conventional method of mating the animal to several cows and then production-testing the daughters when they come into milk.
Current selection systems could return an increase of 1.3 per cent in milk production from a cow in a year but LIC expected the new DNA process to improve that result by at least half.
Chief executive Mark Dewdney said the initial estimate for DNA-proven genetic sales in the first year was about 300,000 inseminations but LIC was holding orders for about 700,000 straws.
"We wouldn't be surprised if we received a lot more," Dewdney said.
"What that shows is the New Zealand dairy farmers' desire to increase the genetic merit of their animals as fast as they can."
The company was road-showing the DNA process in Britain and Ireland and expected to sell products there in the first quarter of next year.
LIC had not been able to export semen to the European Union for the past few years and in March last year the EU banned all imports of germplasm from New Zealand, with stringent new requirements before restrictions would be removed.
LIC modified its Awahuri site, which had been approved by MAF and was waiting final EU approval, which it hoped to have in the next few weeks.
"Once we have this we will be in a position to collect and ship semen from our DNA proven bulls to the UK and Ireland, and capture the growth that exists in both markets for our genetics," Dewdney said.
Revenue for the year ending May 31 increased 18 per cent to $132 million and net profit fell 18 per cent to $15.6 million.
Less than 10 per cent of revenue came from overseas.
The company said earnings before interest and tax rose 45 per cent, while underlying net earnings, without the impact of a revaluation of elite breeding bull and stag teams, rose 30 per cent to 8.7 million.
LIC was expecting further growth in the current year.
