If you ask farm owners or managers whether they'd like to make more money, 99% of them are going to enthusiastically say yes. If you ask the buyer of a ram, bull, buck or stag about the drivers of their decision-making, they will invariably quote some sort of economic reference. They will claim, and most likely believe, that their purchasing decision was based on an improved economic outcome at some point in the future. The problem is, some of these same buyers will have accidentally or purposefully purchased animals that have below-average performance.

A fundamental truth in genetics is that the bell curve always exists. Half of the animals for sale have to be below the average. At some sales, some of the animals will be at the good end of the profitability bell curve, some at the bad end of that curve, and others somewhere in the middle. At any sale, there is also a range in profit potential for the animals available.

So the big and obvious question is, why do the least profitable ones still sell? There are a few answers I can think of and probably many that I can't:‍

1. One person's trash, another person's treasure

There is the fact that different sets of traits will maximise profitability for different production systems. There will be some animals that sit in the top half of profitability for one potential purchaser but the bottom half of profitability for another. One producer might be specifically selecting for worm resistance traits while a competing buyer from a different region doesn’t have this trait in their list of things they need. Both approaches can be right for their respective systems.‍

2. Budget constraints are real

There are plenty of people who've done all of the homework and have the necessary knowledge to identify the sires they'd like to purchase but end up being pushed down the catalogue by those who've put higher values in their budgets. This can be a particular challenge for larger businesses looking to secure a large number of sires. I'm definitely not suggesting that genetics aren't worth investing in, but budgets can only stretch so far. The reality is that a commercial operation needs to balance genetic investment against all the other inputs required to run a successful farming business. Sometimes, this means compromising on genetic merit to ensure the overall business remains viable.

3. Insufficient knowledge

There is a vastly different knowledge base and skill set amongst those who are picking the sires. Some buyers will have full knowledge of the breeding values available on the animals. Others will have limited or no knowledge, and may miss an obvious problem with an animal just through lack of knowledge rather than through intent. There are lots of buyers who simply don't know any better and, importantly, don't realise what they don't know.

At sales, I sometimes chat with buyers who proudly avoid animals with ‘all those numbers’ because they prefer to trust their eye. Interestingly, when you dig deeper into what traits they're selecting for, their list often includes attributes that directly align with several breeding values that would make their selection process far more accurate. ‍

4. Delegating decisions

Some people won't be involved in choosing their sires; they will get the stud breeder, their stock agent, their consultant or a mate to do the selection for them. Sometimes this works out really well for them. By delegating the job to someone who clearly understands their system and breeding direction - and has more knowledge of the animals and the data - it can be a great outcome.

However, sometimes this goes really poorly. The third party sometimes has their own priorities and incentives that aren't aligned with the client's profitability. Some of these third parties prioritise maintaining their own relationships with certain breeders, some have commissions that aren't always declared or some may be making the transaction in a rush. They may also be no more knowledgeable about the data than the farmer who has delegated the job to them. 

The best-delegated relationships involve clear communication about breeding objectives, regular reviews of outcomes and transparency around decision-making processes.‍

5. Operating in an information vacuum

In some cases, there simply isn't enough information available to usefully differentiate between animals. Some sale catalogues have such limited information in them that it is not possible to actually determine the difference in genetic merit between individuals.

It's still surprising to see sales where the only information provided is pedigree and some basic weight or fleece measurement data. In these scenarios, buyers are left with physical appearance alone to make a decision about this season’s genetic investment.

6. Tradition and aesthetics

Tradition and aesthetics often play a much larger role than many people are willing to admit. Some buyers (or their agents) continue to select animals based on physical characteristics that have perceived value but have dubious links to actual profitability. There is also a tendency to buy from the old and established rather than the up-and-coming.

This manifests in preferences for certain visual traits that may have minimal or even negative correlations with profit-driving characteristics. These decisions are often justified with anecdotes rather than data, and can be extraordinarily resistant to change.

7. The fear factor

Finally - and the reason for the title of this article - is the fear of what others may think. When their name gets called out as the buyer, or when the group of selected animals get penned together, buyers fear being judged poorly by their peers. They worry about what someone else might think. That someone else might be a family member at home, the stock agent who will see them in the paddock or the neighbours who drive past them every day.

Of course, the more logical concern is to worry about getting the best set of genetics within the budget rather than what other people might think. But we see people belonging to echo chambers where groupthink stops them from making better decisions, and it is such a waste of potential.

The fear of standing out or challenging conventional wisdom can be a powerful force that overrides economic rationality.

The bottom line

The most successful farmers we work with have the confidence to make genetic decisions based on their system's needs rather than external perceptions. They understand that genetic improvement compounds over time. So what's stopping you from buying the best genetics for your business? The bell curve of genetic merit will always exist. The question is: which side of it do you want your flock or herd to be on? And are you willing to make decisions that might raise eyebrows today but raise profits tomorrow?

I'd love to hear your experiences. What drives your genetic purchasing decisions? Have you ever made changes to the way you purchase genetics that have paid dividends in the long run? Drop me a line at mark@nextgenagri.com - I'm always keen to hear how farmers are navigating these complex decisions.

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