Bloomberg News

Illumina Bull Gene Tests Milk Cattle Industry for Profit

December 19, 2012

Bull Genes Mapped by Illumina Seen Doubling Milk Output

Illumnia’s bovine test is the result of a six-year effort by more than 300 researchers who sequenced and analyzed the 22,000 genes of the animals’ genetic code, which includes cell instructions for making milk and muscles. Photographer: Daniel Acker/Bloomberg

Genetic testing from Illumina Inc. (ILMN:US) and Life Technologies Corp. (LIFE:US) have spurred broad changes in the development of new medicines. Now, this research may also help farmers reduce the cost of producing milk.

Procedures from the companies are allowing dairymen such as Jonathan Lamb, with 4,000 milking cows at his family farm near Buffalo, New York, to find out in weeks, instead of years, which bulls will sire the best milking cows.

Breeders market bulls and semen based on the animal’s ability to produce proficient milkers. In the past, a bull’s performance couldn’t be assessed until it was raised, mated and its offspring were old enough to gauge their milking ability. Now, farmers are increasingly using DNA screens to find gene markers in young bulls that predict top production, said Tom Lawlor, a geneticist with the Holstein Association USA.

“I liken it to a scratch-off lotto ticket when I get the results every month,” Lamb said in a telephone interview. “Bull prices are minimum two times what they used to be.”

Lamb, owner of the Oakfield Corners Diary, said genetically superior milking cows now sell for $40,000, with the best getting as much as $125,000. Prior to the genetic tests, a good animal might fetch $15,000, he said. On the downside, livestock without great genetics are selling for far less than before.

The genetic tests, which may help double U.S. milk production in the next few years, debuted about four years ago and are being quickly adopted in the industry, Lamb said. Executives from Illumina, based in San Diego, and Life Technologies, of Carlsbad, California, say they are benefiting from the increased interest.

‘High-Growth’

“We’ve now developed a high-growth, recurring-revenue business in both the livestock and agricultural segments,” Illumina Chief Executive Officer Jay Flatley said during a February earnings call. Illumina has estimated that testing generates more than $100 million, Tristan Orpin, the company’s chief commercial officer, said in an e-mail.

Machines built by Illumina and Life Technologies are able to provide a blueprint of a person’s DNA, information used to compare genetic sequences as a way to find mutations. This process is used in people to diagnose rare illness, identify the risks of certain conditions, or to precisely target tiny physical changes with treatment.

Translating an entire human genome required more than a decade of research and billions of dollars by the government’s Human Genome Project, which completed the first sequence in 2003. Machines from Illumina, founded in 1998, can do the same work in weeks for thousands of dollars.

Lengthy Effort

Illumnia’s bovine test is the result of a six-year effort by more than 300 researchers who sequenced and analyzed the 22,000 genes of the animals’ genetic code, which includes cell instructions for making milk and muscles. The genetic data also revealed how the cow’s four-chambered stomach digests, changing grass forage into body tissues that make high-quality beef.

The test, called BovineSNP50, searches cattle DNA for 50,000 markers that indicate attributes such as good milk production, as well as marbled fat for beef cattle, according to the company.

“We’re seeing uptake of this at the level of hundreds of thousands of samples per year,” Christian Henry, Illumina’s general manager of life sciences, said at an analyst conference in May. “It’s also going not only from high-value crops like cattle, but also down to pigs and sheep, and then all of the fruits and vegetables that you can think of.”

Expanding Sales

The market for the tests is growing, said Nir Nimrodi, general manager of food safety and animal health at Life Technologies, with a sales potential that is much larger than just cattle breeders.

“For each breeder, there are thousands of farmers and dozens, or hundreds, of veterinary diagnostics labs that run test for these animals,” Nimrodi said in an interview.

While Nimrodi wouldn’t disclose what percentage of Life’s sales are in this industry, he said the market is worth $500 million and expanding from 7 percent to 10 percent a year.

Along with producing profits for genetic testing companies like Illumina and Life Technologies, the screening is making U.S. breeding livestock more efficient, said Lawlor, a Brattleboro, Vermont-based geneticist at the Holstein organization, in a telephone interview.

“It’s definitely allowing us to make rapid genetic improvement,” he said. Farmers are “scrambling to get a hold of those top genetics so that they can build their elite herds.”

American cows produced an average of 21,345 pounds of milk in 2011, the U.S. Department of Agriculture said. New Illumina tests may double that figure in a few years, Lawlor said.

Gains from the technology are just now being seen, said Kent Weigel, a dairy science professor at the University of Wisconsin in Madison, who estimated that as many as 20,000 animals a month are undergoing testing.

“We’re looking at a pretty staggering impact on the industry,” said Curtis Van Tassell, a geneticist at the U.S. Department of Agriculture. “We have not come near to exhausting the improvement we can make in the dairy cow.”

To contact the reporter on this story: Ryan Flinn in San Francisco at rflinn@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net


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Companies Mentioned

  • ILMN
    (Illumina Inc)
    • $158.7 USD
    • -5.22
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