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Embryo Biopsy Investment Analysis

The numbers used in this investment analysis were derived from a stochastic simulation model developed to assess the economic risk of embryo transfer programs, in which variables of interest are randomly drawn from an assigned distribution, rather than a fixed value (Aherin, 2017). The results shown represent the median values (middle value in a string of numbers, more resistant to outliers and skewed data than an arithmetic average) from 100,000 simulation runs of an example scenario comparing the transfer of non-biopsied, frozen IVD (in vivo derived, conventional embryos) embryos vs biopsied, frozen IVD embryos. The analysis is represented on both a cash-flow and revenue-expense basis. The comparison between non-biopsied and biopsied scenarios only accounts for variable expenses, assuming fixed operation expenses are identical, regardless of biopsy decision. Embryos undergoing biopsy are assumed to have a 10% reduction in pregnancy rate from the 54% average pregnancy rate of non-biopsied, frozen IVD embryos. The model accounts for cattle purchase and marketing values, embryo biopsy and transfer expense, genotyping expense, feed costs, health program costs, etc. (see Aherin (2017) for full model specifications).

Within the scenario, 50 embryos with a 50% probability of carrying an undesirable trait (e.g. DD) are acquired at $200.00 per embryo (variability of donor embryo production is excluded). Recipients are purchased as open and fertile at $1,200.00 per head. In the non-biopsy scenario all embryos are transferred and carrier status is determined from live calf DNA samples. In the biopsy scenario, carrier status is determined before transfer and only non-carrier embryos are transferred to recipients. Carrier embryos are marketed for $50.00 per embryo. Two rounds of embryo transfer are allowed within the model in order to account for variability in recipient response to synchronization. Following transfer, recipients are exposed to a natural service sire(s) valued at $6,000.00 per head. Non-carrier, ET bulls and ET heifers have the potential to be marketed as ready-to-breed seedstock for an average value of $7,500.00 and $5,000.00, respectively (a 20% cull rate is applied). Carrier progeny and all natural-service progeny are marketed as preconditioned feeder cattle according to weight and an applied price slide. After the first calving season, former recipients are exposed to a natural service sire and marketed as bred commercial cows at $2,000.00 per head. Natural service sires are then sold for $1,500.00 per head. Following either breeding season, open females are marketed at $1,000.00 per head. 

For the given scenario, the return on investment (ROI) advantage of the embryo biopsy scenario compared to the non-biopsy scenario stems from a more efficient use of resources, as shown in the “Median Gross Margin per Recipient” metric. Recipient management plays a crucial role in ET program profitability (Beltrame et al., 2010). Thus, by implementing embryo biopsy to only create pregnancies with potential market premiums, resources are not being wasted on the gestation and development of ET progeny destined for value at or slightly above base market value. Of particular interest is the opportunity to generate greater ROI through substantially decreased input expense in the embryo biopsy scenario. If ample embryos were available to biopsy and transfer an equal number of non-carrier as carrier embryos, the biopsied scenario would surpass the non-biopsied scenario in “Median Gross Margin”, not only “Median Gross Margin per Recipient.” Although this scenario only focuses on carrier status of an undesirable trait, the underlying evidence strongly signals that if the value gap in selection criteria (EPDs, sex, etc.) is wide enough, embryo biopsy is a viable option to increase production efficiency.

This investment analysis does not consider rate of genetic change; however, the potential exists to use embryo biopsy and subsequent genetic information to improve both selection intensity and generation interval when resource availability dictates that only a fraction of available embryos can be transferred. Furthermore, one could surmise that a pregnant recipient gestating a fetus with known genotype could garner a market premium and alleviate some buyer risk compared to a recipient gestating a fetus of unknown genetic merit.

References

Aherin, D.G. 2017. Systems approach to economic risk analysis of Bos taurus beef embryo transfer programs through stochastic simulation. M.S. Thesis. Kansas State Univ., Manhattan, KS.

Beltrame, R.T., C.R. Quirino, L.G. Barioni, V.F.M. Hossepian Lima. 2010. Simulation and economic analysis of in vivo and in vitro production of embryos in cattle. Pesq. Agropec. Bras. 45: 1513-1520.


Dustin G. Aherin, M.S.
Beef Cattle Institute
Kansas State University
Ph.D. Student
dgaherin@vet.k-state.edu

 
 
 
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A primary motive for using technology in seedstock production is the impact on rate of genetic progress. The factors affecting rate of genetic change are selection accuracy, intensity of selection, trait variation and generation interval. In recent years, two new technologies, genomic enhanced EPDs and embryo biopsy, have enabled the potential to greatly accelerate genetic progress for seedstock producers and their commercial customers.  

 The accompanying chart demonstrates this potential. The red line represents progress from ten years of selection for $B using natural mating (NAT) in combination with traditional EPDs. The predicted potential rate of change is 3.9 per year. Adding artificial insemination (AI) and genomic-enhanced EPDs (GE-EPDs) increases the rate of change to 6.5 per year. Including embryo transfer (ET) with AI and NAT increases the rate of change to 9.2 per year. A calf crop resulting from equal use of NAT, AI, ET and ET with embryo biopsy (BET) increases the potential rate of change to 11 per year. And finally, increasing the percentage of calves resulting from ET and BET can potentially increase the annual rate of change to almost 15, nearly a four-fold increase over NAT with EPDs.

 Please keep in mind that this is merely an example using proven animal breeding principles. Actual results for the trait or index of interest will vary depending on several factors including intensity of selection, variation, selection accuracy, and generation interval.

Jim Gibb, PhD