Sexed dairy semen and beef semen sales boomed in 2022, as dairy farmers looked to cash in on different markets for surplus calves.
Sexed semen sales were up 29 per cent on 2021 from 518,644 doses to 671,348, the National Herd Improvement Association of Australia annual semen survey revealed.
Sales of conventional semen fell 16pc.
NHIA director and World Wide Sires Australia general manager Geoff Wood said this trend was set to continue, as farmers looked to reduce the number of bobby calves born.
"Sexed semen has gone from just 10pc of the dairy semen market in 2018 to today's 38pc," he said.
"The main factors driving this are clear, animal welfare issues, primarily the need to reduce the number of bobby calves born and farmers reducing the cost of doing business.
"Over the last seven years the reliability of sexed semen has increased markedly to the point where dairy breeders know that introducing it into their business will result in greater value for every pregnancy and calf born on farm."
Mr Wood said the continuing strength of the live dairy export market was also driving the change.
Many farmers were breeding animals to take advantage of what had become a reliable income stream for surplus heifers in the past four years.
In that time, sexed semen sales have almost quadrupled.
Domestic beef semen sales have also soared.
Mr Wood said the driving force behind the 39pc rise in domestic beef semen sales was the dairy sector, with imported beef on dairy and sexed semen and domestic beef on dairy increasing by 23pc.
"We are also seeing a consistent trend in the beef market, the drivers being economic," he said.
"While beef prices and demand remain high, there will be a premium paid at market for young dairy beef cross animals.
"Food trends come and go, but there is also growing consumer demand for dairy beef with ex-dairy cows having more intermuscular fat and so more marbling, resulting in a rich depth of flavour."
The trend was being driven by the ability of farmers to genomically test their animals and make joining decisions based on those results.
"For breeders, using sexed semen on the top portion of the herd to increase the proportion of heifers from the best females and beef semen on the bottom portion reduces the overall cost of doing business," Mr Wood said.
Beef on beef sales increased 11pc year-on-year, from 263,689 to 293,667 doses, making up around 60pc of the total beef market.
But the bright news in those two categories was overshadowed by a decline in overall semen sales and a big drop in export sales.
Dairy semen sales fell by 109,000 last year, with almost half of this decrease attributable to fewer units exported.
NHIA chair and Genetics Australia CEO Anthony Shelly said the dairy semen market performed better than the top-line figure suggested.
"If you factor in the 31,000 unit increase in beef on dairy sales, the reduction in units sold into dairy in Australia is only 26,000 units, or 1pc," he said.
"Depressed export sales will remain a factor in the years ahead.
"China, historically our biggest market, is still closed off to Australian producers, but the current Australian government is taking steps to improve this relationship.
"It might be some years off but hopefully trade will resume as a result."
Mr Shelly said the industry was taking steps to develop new markets.
"I've recently returned from a 'team Australia' trip to Pakistan, globally the fourth largest dairy market, with Holstein Australia and Jersey Australia," he said.
"We've worked hard to develop this market over the last two years and demand for Australian dairy genetics is increasing, but it's a slow process."
Genomic semen sales continued the strong growth of recent years, making up over 60pc of all dairy semen sales (imported, domestic and export sales).
Over the same period sales of daughter-proven semen declined by a 26pc, making up 29pc of the total market.
Mr Wood genomic sales were outpacing sales of daughter-proven semen.
"Genomic sales overtook daughter proven for the first time during 2017/18 reporting year and since then the gap between the two has continued to grow," he said
"While every breeder will have slightly different breeding objectives, the reality is the numbers don't lie.
"Many breeders are now choosing genomic ... as opposed to waiting for the slightly higher daughter-proven bulls in three years' time.
"An increasing number of farmers now milk genomic daughters, seeing improved health and production traits and increased volumes through the generations.
"If genetic progress continues to accelerate as predicted, this trend will only continue."
The National Herd Improvement Association of Australia Semen Survey is conducted annually with data drawn from Australia's leading genetics companies.
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