When a group of farmers recently got together to buy a Holstein cow for a record-breaking $1.925 million, they weren’t just buying any ordinary cow.
“We bought the factory. Now we’re going to start building things out of a factory,” raves Tim Abbott, of Enosburg Falls, Vt., one of the partners who recently bought a piece of S-S-I Doc Have Not 8784-ET during an auction at Duckett Holsteins in Rudolph, Wis.
And by factory, he means a cow that will mother a long line of high-performing offspring for other farmers.
“I look at it as an entire business,” Abbott says. “With the cow, a fair number of potential offspring, it’s a foundation for her own company.”
If you’re familiar with genetic selection and other things that are designed to give insight into a cow’s future potential — and that of its offspring — here are some things that might be of interest:
According to a recent article in Hoards Dairyman, “Doc” scored Excellent 96 in the udder, which is considered very high for a young cow — she’s almost 4.5 years old.
The cow has a Genomic Total Performance Index (GTPI) value of +2742 and a predicted transmitting ability (PTA) of +2.93 for type, according to Hoards, and the cow has produced three offspring with good genetic traits.
But still, why would a cow fetch nearly $2 million? Well, for one thing, it wasn’t just the cow that sold. The high price tag also came with 40 embryos that are being carried by recipient cows.
In-vitro fertilization — the process of harvesting unfertilized eggs from a cow and fertilizing them in a petri dish — has improved to the point that an elite cow can easily mother dozens of calves in a year. Couple that with the increasing accuracy of genetic selection, and it has become easier than ever for a dairy producer to pick and choose the traits they want in their dairy herd.
Bottom line, Abbott and his partners didn’t just buy Doc for her own production potential. They’re banking on her children to be big producers, too, and bring big money.
Winning the bid
Abbott and his wife, Sharon, co-own The Dairy Sales Alliance — a partnership of their Borderview Genetics business and MD Hillbrook in Thurmont, Md. — which runs dairy cattle sales across the country.
The company oversaw the Summer Selections auction at Duckett Holsteins — which brought an average of $33,000 per cow — in early June, although Abbott was not the actual bid caller.
When the auction for Doc started, the opening bid was $400,000. It quickly became competitive, he says, as the bids increased to $800,000, and then crossed the $1 million mark. “The interesting thing was, I think there were five to six different entities that bid over a million dollars, and I have never seen that before,” he says.
The bids continued — “It went on forever,” Abbott says — until the winning $1.925 million bid was announced. The winning bidders were the Abbotts and their partners AOT Holsteins and Kings-Ransom Farm, both of New York, and Mike and Julie Duckett of Wisconsin.
Abbott knows his investment is big, but the number of elite dairy cows he’s seen fetching $250,000 or more is higher than it’s ever been.
“Most investors are still dairy farmers with big operations,” he says. “The dairy industry is strong right now; milk price is strong, and that is another thing driving it.”
Banking on a return
When the bids settled at just under $2 million, Jeff King, co-owner of Kings-Ransom Farm, says he cringed at the high price tag. But genetic selection has become a bigger part of his farm’s breeding operation over the years, and he’s confident that the predictions made for Doc and her potential offspring will come true.
“We really believe that the marketing potential of the cow and her offspring are virtually unlimited,” King says. “We wouldn’t have gotten into a purchase like this if we didn’t believe that.”
A big reason he likes Doc is that she not only looks good and can potentially compete in the show ring, but she also has proven offspring that have also produced, which he says is a combination that’s hard to find.
One of the beauties of the partnership, he says, is that people with varying expertise came together to invest in Doc. Kings-Ransom and AOT Holsteins specialize in cattle breeding, while the Abbotts are well-known for their dairy sales experience. The Ducketts, who sold Doc but wanted to keep a piece of her as an investment, have a big part in it, too.
“The Ducketts are world-class caretakers of cattle,” King says. “They will continue to house her, and they will continue to make embryos and these embryos can ship anywhere, including to my farm where I can use animals as surrogates.”
Now, the hard work begins. Doc’s embryos will be harvested every couple of weeks with the goal of producing between 50 and 70 offspring a year for at least the next three years, Abbott says.
The group is banking on getting back its investment and then some.
“The goal as a group, and I’m not overstating it, is to make four or five times our money in the next five years, generate $5 million to $10 million in the next five to 10 years,” Abbott says. “We didn’t buy a $2 million cow to break even.”
“With a purchase this large, it has to justify itself as an investment,” King says. “And we believe it is a good one.”