CDN Board of Directors Executive Summary – March 2017

The CDN Board of Directors held its regular quarterly meeting on February 28th and March 1st, 2017 at the office of Dairy Farmers of Canada in Montreal, Québec. The following is a summary of actions, recommendations and decisions stemming from these meetings.

 The Board of Directors received a presentation to demonstrate the new CDN Global web site, which will soon be released and targets international users speaking German and Spanish. The full web site at remains the optimal tool available for Canadian dairy producers for all breeds.  The Board of Directors participated in a process aimed at identifying various risks to which CDN may have some degree of exposure, and identified those of highest combination of likelihood and impact. The Board of Directors will continue this risk assessment process and develop an appropriate action plan going forward.  An important area of discussion by the Board of Directors is an opportunity for CDN and other industry partners, to collaborate with Dairy Farmers of Canada (DFC) in establishing a national traceability system for dairy cattle in Canada. Given the targeted timelines for implementation of the traceability module of the proAction initiative, DFC is assessing various options available for the dairy sector and seeking the most beneficial solution for Canadian dairy producers.  CDN management provided an update on three key issues related to genetic evaluation services:  There is a growing need in Canada for adopting the use of “Single Step” methodology for calculating genomic evaluations, instead of the two-step procedures currently being used. This is particularly important for the development of evaluations for new traits for which there is less phenotypic data in terms of herds and time period. To address this need the CDN Board of Directors approved a proposal from management to pursue a licensing agreement for access to software available internationally that would allow CDN to implement single step genomic evaluations as soon as possible.  Given the recent availability of hoof health data at CDN, the Board of Directors agreed that the development of genetic and genomic evaluations for Digital Dermatitis (DD) in Holsteins is a high priority with targeted implementation no later than April 2018.  Based on presentations at recent international meetings organized by Interbull, as well as preliminary analysis at CDN, the Board of Directors agreed that measures should be taken as soon as possible to eliminate the downward bias of bull proofs that is expected from the pre-selection of young bulls prior to entry into AI based on their genomic evaluations.  The CDN Board considered all correspondence received from industry partners regarding the proposal from the Industry Standards Committee outlining an alternative approach for labelling lactation records. Given the favourable support received from breed associations, the Industry Standards Committee will continue to discuss details associated with the proposed strategy and prepare an implementation plan for presentation to the CDN Board of Directors at its next meeting in May.

 The Board of Directors received an update on the collaboration between CDN and Holstein Canada towards the development of a genetics decision software for Canadian dairy producers. The software specifications have been defined and a formal Request for Proposal (RFP) was issued to four targeted companies. Once the software development company has been identified, more detail about the functionality of the software and the technical calculations based on sound scientific principles will be defined.  The Board of Directors also received a management report on a patent that was recently granted by the Canadian Intellectual Property Office (No. 2673174). The claims of the patent, which is owned by Agriculture Victoria Services Pty Limited (AVS) in Australia, essentially include (a) the imputation of SNP genotypes, (b) the calculation of genomic evaluations using the imputed genotypes, and (c) the use of such genomic evaluations for selective breeding. After considering various possible options, the Board of Directors agreed on a strategy and action plan.  Based on 10 months of activity within the current fiscal year, projected total revenue is well above budget (+7.9%), mainly due to an unbudgeted cash contribution from Zoetis for the development of the genetics decision software. Operational expenses are projected to be 3.3% above budget, mainly due to increased expenses associated with the Board of Directors and a higher level of compensation to the Canadian DHI partners for the collection of data used to provide genetic evaluations for various functional and health traits. Overall, without considering the unbudgeted extra revenue from Zoetis, the year-end result is expected to be a slight net surplus of revenue over expenses, similar to the approved budget for the year.  For the 2017-2018 budget, revenue received from Zoetis during 2016-2017 is expected to be fully allocated to the development of the new genetics decision software so this budgeted cost does not affect service fees to member organizations. With this in mind, the Board of Directors approved a budget that balances revenue and operational expenses, excluding the software development project, which leads to a 1.5% increase in the level of service fees for member organizations compared to last year. This magnitude of increase is directly related to the budgeted cost for licensing software required to implement single step genomic evaluations. At year end, Members’ Equity is budgeted to be near $245K, which is the same level as it was at the end of 2015-2016. For activities related to the DairyGen Council, the combination of expenses for ongoing and new projects is expected to maintain the level of carry-over reserves at approximately $500K.  As usual at this time of year, CDN has circulated the call for nominations for the 2017 Dairy Cattle Improvement Industry Distinction Award. All industry organizations are encouraged to identify quality candidates and submit the nomination form for consideration by the CDN Board of Directors at its next meeting in May.  The Board also reviewed the schedule of events associated with the 2017 Dairy Cattle Improvement Industry Forum, which will be held at the Deerhurst Resort, Huntsville, Ontario. Meetings involving various industry boards of directors will take place on Monday, September 18th and Tuesday, September 19th with the Forum on Wednesday the 20th and the 22nd Annual General Meeting of CDN will take place during the morning of September 21st.  The next CDN Board of Directors meeting will be held in Guelph on May 30-31, 2017.

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