Genetics company refuses to cover defective calves

Last updated 09:26 07/08/2012
Hairy calves
HAIRY AND HOT: Many farmers want compensation for mutant calves.

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A Waikato farmer is demanding compensation after a genetic mutation in a commercial breeding bull created unusually hairy calves that are getting into water troughs to cool off.

The organisation that provided the bull semen, Hamilton-based dairy genetics company Livestock Improvement (LIC), said it would not pay compensation as the genetic mutation is ''naturally occurring'', meaning it did not result from anything LIC did.

If it was liable and did pay compensation, LIC says it could be exposed for nearly $2 million.

South Waikato farmer Craig Littin is one of about 900 affected farmers nationwide, including about 400 farmers in the Waikato. About 1500 calves, all heifers, are understood to be affected, as carriers of the genetic mutation.

Littin said he had 10 defective calves bred from semen bought from LIC.

The defective semen is from a holstein-friesian bull called Matrix, by a holstein-friesian sire called Halcyon.

"The Matrix calves have come out really funny. They are extremely hairy and are doing really strange things, like sitting in water troughs to try and control their body temperature," Littin said.

The Lichfield dairy farmer, who runs a cross-bred herd, said LIC should pay him full compensation for the defective animals.

LIC confirmed there was a genetic mutation in Matrix, inherited from its sire, which has affected about half the female calves bred from the Matrix semen.

LIC also confirmed the traits from the mutation, which include excessive hairiness and a lack of heat tolerance. It has received about 40 complaints from farmers.

LIC said if it was to provide compensation, it could be exposed for up to $1.95m, calculated at $1300 for each of the 1500 affected calves.

But the farmer-owned co-operative said it would not compensate farmers as the genetic mutation was naturally occurring and the co-operative did not know about the mutation when it sold the semen.

"Most farmers recognise that these rare mutations are naturally occurring and simply a fact of life," LIC genetics general manager Peter Gatley said.

The company said it was no longer selling genetic material from Matrix and had never sold semen from Halcyon.

Littin said each calf had cost him about $1200, including grazing for the past six months. He could not simply sell them, as that would just be passing the problem on to other farmers.

"I'm 10 animals down on what I need. LIC should pay me full compensation.

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''Our business puts a huge amount of money through LIC every year - about $50,000 a year," Littin said.

LIC said Matrix was used for just over 12,000 inseminations, with about 1500 heifer calves expected to be carriers of the genetic mutation.

The co-operative company is offering farmers free genetic tests to identify Matrix calves with the mutation.

It is recommending farmers humanely cull any found to be carriers, or use them as beef animals, as they will not add value to a milking herd. Non-carriers could be kept, as they would milk and mate normally, and would not transmit the condition, LIC said.

But Littin is refusing to take the issue lying down, saying LIC had a moral obligation to refund affected farmers.

"For a co-operative, LIC is being very unco-operative over this issue.

''When Fonterra farmers have to dump milk or can't get their milk picked up, the whole co-op comes to the party and it seems as though LIC doesn't have the same values."

Littin said he figured out the problem for himself after the calves were born last spring.

"We DNA-test all our calves so we know the sire and parentage 100 per cent. In about November, LIC sent us a letter saying we might notice some of these cows are hairy, and that was basically the extent of the letter.

"I kicked up a stink with LIC, and they DNA-tested my calves themselves. Then we received another letter from LIC basically saying get rid of the calves.

"They were running on the assumption we'd just get rid of them and the issue would go away. But I'm not prepared to go out there and just put a bullet in them."

Gatley said the LIC board had met to consider the matter and decided not to compensate, after considering a recommendation from its farmer-member shareholder committee.

The decision was made on the basis that the mutation was naturally occurring and was not discovered until after the inseminations were provided.

"It was noted that no genetics company in the world has been known to compensate in similar circumstances.

''LIC's focus has been on equipping farmers with the information to identify and remove affected animals to avoid further cost, and to rid the industry of the genetic defect for good."

About 240 farmers had accepted the offer of free genetics testing.

"LIC is responsible for about 4 million inseminations each year, so we're dealing with about 0.3 per cent in relation to this issue."

If LIC were to have paid compensation, Gatley said suggestions for compensation included:
Refunding the insemination fee for the 1500 affected calves which, at $20 per insemination, would equate to $30,000.
Paying the full market price of a high breeding worth heifer estimated at $1600 each less disposal value (with beef rearers paying about $300 each for the affected calves). For the 1500 affected animals, this would equate to $1.95m.

Information from LIC shows:
- Matrix semen was offered in spring 2010 and used in 12,345 inseminations.
- The problems were first identified in spring 2011, when Matrix's sisters (sired by the same bull as Matrix, the holstein-friesian bull Halcyon) calved for the first time. About half these calves were abnormally hairy and failed to produce milk normally.
- Matrix calves born in 2011 were then examined by LIC and the trait appeared to have been transmitted to about half his daughters.
- Matrix had 3052 heifer calves recorded, and therefore there are probably about 1500 carriers nationwide, LIC genetics general manager Peter Gatley said.
- By early 2012, analysis of the data indicated the mutation occurred spontaneously in Halcyon and was passed to his son, Matrix.
- Early in March 2012, farmers who had used Matrix in 2010 were notified and advised to humanely cull any offspring with unusually hairy coats.
- Farmers with Matrix calves due this year had also been notified, Gatley said.
- "By this point we had devised a DNA genotyping test to identify carriers and non-carriers, and this test was offered to the farmers at no charge."
- Halcyon inseminations had not been used commercially. He was used in progeny-testing and produced a couple of sons (one being Matrix, the other was a non-carrier of the mutation), LIC said.

In a letter to affected farmers in June, LIC says features of calves with the genetic mutation include:
- Rough coats, with most carriers presenting a particularly hairy coat.
- Animals are stocky and more of a beef breed type.
- A lack of heat tolerance - some animals will seek to cool themselves through shade or by bathing in troughs and puddles (often muddy as a result).
- Some animals display a respiratory issue, including faster breathing/panting.
- Daughters not milking well or have calved down completely dry.


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