Qualities that are in demand at major Wagyu sales

This paper is a review of Wagyu auctions that have been held in 2019 and posted price lists. Sales results are analysed against information provided in sales catalogues and predicted breeding values. Value is determined by many different factors which each potential buyer has to consider before and during the auction. The balance is between the physical attributes - conformation, size, weight for age, growth rate, semen counts etc etc - the phenotype, pedigree and breeding values - the genotype.

Sales that have been reviewed are three auctions in Australia, and the Wagyu Gala and semen price lists in Germany.

Australia

Premier auction is Australia is the Elite Wagyu Auction that is held at the conclusion of the Australian Wagyu Association conference in May each year. This year it was held in Adelaide in South Australia. Records, not only for Wagyu, but also for all-breeds were broken. Despite this, several lots were passed in. While supply is exceeding demand, the value for each animal at auction is taken to be the highest bid placed.

From modest beginnings in Australia, the Wagyu breed has shown phenomenol growth. The Wagyu industry in Australia is production driven with 90% of beef of Wagyu and Wagyu-cross being exported. In most operations efficiency of finishing is determined by achieving marbling grade for value and carcass weight for turnover within a designated feeding period for either Fullblood or F1 feeders. Variability in measuring carcass quality has been largely overcome through the use of digital imaging and genomically enhanced estimated breeding values are available from single step BLUP. Carcass quality drives the Australian Wagyu industry. Instead of competing for ribbons in the show ring, rivalry is confined to where it really counts - beef quality eating competitions at the Sydney, Brisbane and Melbourne Shows; and the AWA Branded Beef Competition at the annual conference. The demand for genetics excelling in carcass quality is pronounced at Wagyu auctions even though the importance of novel genetics which are crucial to ensure sustainability of the breed through the Wagyu Fullblood Rotation must never be overlooked.

The association between Bid value/Sales price and any factors is undertaken to search for the drivers that are influential in driving demand for Wagyu at auction in Australia.

Elite Wagyu sale in Australia, 10th May 2019

Records were smashed during the Australian 2019 Elite Wagyu National Sale held during the closing stages of the annual conference in Adelaide on 10th May 2019. Sales prices by category at Australian Wagyu Association elite sale on 10th May 2019 in Adelaide posted by Wagyu InternationalGenetics on offer was required to be within the Top 5% in breeding merit in Australia. An analysis has been made from Bids that were placed to identify the drivers that were behind buying decisions. Fullblood females peaked at a new Australian all-breeds female record price of $280,000, while embryos sold to a new national record of $10,200 each.
Three females in the sale exceeded the previous Wagyu female record of $95,000 set at the auction in 2017.
Some passed-in lots were negotiated after the sale, but the published results indicated that 15 of 17 Fullblood females offered had been sold, for an unprecedented average of $69,000. Within the bull offering, 13 of 23 lots were sold, averaging $26,577. The sale represented a truly international exchange of genetics, with vendors and buyers active from across Australia as well as South Africa, the United States, Wales, Canada and New Zealand.
Prior to 2016, sales at Elite Wagyu auctions were local but in that year a UK breeder chased high marbling semen to an unprecedented price of $3,050 per straw. This was followed by a South African in 2018 with a bid of $185,000 for a heterozygous polled Purebred bull, and $280,000 was been paid this year for a Fullblood heifer by an American syndicate.

This 17 month old heifer is an October 2017 Fullblood calf and was offered from Scott de Bruin’s Mayura Wagyu from Millicent, South Australia. Surpassing the previous all-breeds beef cattle record of $190,000 held by an Angus heifer, she was knocked down for a record $280,000 to Brian Stamps from Oklahoma in the USA. Second highest Wagyu heifer price also exceeded the Angus record and went to Trent Bridge K0034, a September 2014-born cow, sold in calf, from Armidale, NSW and bought for $200,000 by GeneFlow, a recently-launched IVF company based out of Tocumwal in southern NSW. The Trent Bridge cow has the highest marbling score (+2.4) of all registered Wagyu females recorded on BREEDPLAN and is from parents bred by the Perry family.

The Elite Wagyu Genetics Sale turned over $1.74 million in 2019 from 101 Lots. Despite the record prices, some excellent genetics didn’t get a bid as buyers were spoilt with options. Demand for Polled genetics appeared to be waning but many Fullblood purchases were driven by the need to increase marbling in polled Wagyu herds.

The record breakers have been mentioned. Charts have been complied to illustrate trends that were expressed between EBVs with bids.

Chart showing association of bid price at Australian Wagyu Association Elite sale in Adelaide on 10th May 2019 with $Indexes and Wagyu International indicatorsChart showing association of bid price at Australian Wagyu Association Elite sale in Adelaide on 10th May 2019 with Maternal Traits from Australian Wagyu BREEDPLANChart showing association of bid price at Australian Wagyu Association Elite sale in Adelaide on 10th May 2019 with Carcass Traits from Australian Wagyu BREEDPLAN

 

AWA recently improved the Fullblood Terminal $Index and introduced another two. The association between $Indexes and Bid prices for Fullbloods in the recent 2019 auction are generally weakly positive overall with the strongest found for F1 Terminal $Index. Wagyu International uses different weightings for traits that are considered to be of economic significance and these are expressed as a Carcass Indicator (wiCI) and a Maternal Indicator (wiMI).  wiCI has incorporated Marble fineness since it was first reported in BREEDPLAN and Subcutaneous fat thickness is negative in the Indicator - as it is in Yield Score in Japan. The analysis of the statistics reveals that the correlation between Fullblood Terminal Index for Fullblood bulls with Bid Price of + 0.72 was the highest. Second highest was + 0.68 for F1 Terminal $Index for bulls. Correlations between bids and $Indexes for embryos were low but the overall association across all lots was for Wagyu International Carcass Indicator (wiCI). The wiCI is the weighted ranking of economic carcass traits and this had a closer fit to demand on the day amongst the Indices. The implications are that the weightings used by Wagyu International for the Carcass Indicator are more closely aligned with those that were used by the highest Bidders for Fullblood semen, then F1TI$, and finally FT$I. Second was F1T$I and third was FTC$I. Maternal traits overall were not very influential because of the negative association with Wagyu Internal Maternal Indicator (wiMI). The influence of Maternal Traits from Wagyu BREEDPLAN - birth weight, growth rates, milk and scrotal size EBVs - in determining demand was negative - especially for semen and embryos.

The major individual EBVs in value were Marble Fineness, Marble Score and Eye Muscle Area EBVs. Carcass Weight and Retail Beef Yield EBVs were neutral so of no importance. Subcutaneous fat thickness EBV was strongly negative on value of semen.

Marble score and Carcas weight EBVs with Bid price for Polled bulls at Australian Wagyu Association elite auction in May 2019 in AdelaideThree out of eleven batches of Polled Purebred genetics were successfully sold, with 30 straws of semen selling for an average of $533; but all females, bulls and embryos were passed in. Despite the low numbers involved, strong associations were found with Bid prices for Polled Purebred bulls. However, bidders were not prepared to reach vendors’ expectations. Regression between bid prices was highest with wiMI (maternal traits) but the correlation was strongly negative (R = - 0.90). This confirms that there is no interest in growth or milk in the evolving Polled Wagyu herd and is exactly as expected as it is terminal. The second highest regression was with wiCI (R = + 0.83) and this was positive. Third was F1 Terminal Index, and finally Fullblood Terminal Index and Self Replacing Index had lowest bearing.
There was no premium offered for homozygous polled (PP) genetics over heterozygous polled (PH) genetics. Strongest associations of bid prices were with the following carcass traits: Marble score (R = +0.74), Marble fineness (R = +0.60) and EMA (R = +0.96).  Maternal traits were strongly negatively associated: 400 day weight (R = - 0.84) and Carcass weight (R = - 0.64). Associations of Bids for Polled bulls with $Indexes and Indicators is shown to the left above, and with Marble Score and Carcass Weight EBVs in the chart to the right.

In 2017, 12 out of 20 polled Purebred Wagyu bulls sold for an average of $9,077 with a top price of $15,000. The following year, Poll Wagyu Midnight had greatly improved carcass EBVs and exceeded expectations with the record price of $185,000. The breeding merit of some lots was higher in 2019 than the previous year, but, despite this, bids did not reach reserve price. Highest offer in 2019 reached $30,000 for Poll Wagyu Nightfall. His full brother, Poll Wagyu Midnight M0775, sold for $185,000 in 2018 and they are both heterozygous polled so half of their offspring from horned dams are expected to be polled. They both have genomic EBVs with similar EBVs but Nightfall has superior carcass traits. His Marble Score EBV is +1.7, which is 30% higher than that for his brother Midnight. Nightfall has an advantage of 35% of F1 Terminal $Index over Midnight, while Marble Fineness EBV is 47% higher and Eye Muscle Area is 64% higher. Despite this, buyers were not prepared to meet the vendors’ expectations on the day.

The charts showing the top carcass EBV polled bull in each year is shown below.
Chart of estimated breeding values for Poll Wagyu MN123 that was sold for $15,000 in 2017Chart of estimated breeding values for Poll Wagyu Midnight M775 heterozygous polled Wagyu bull sold for $185,000 in 2018Chart of estimated breeding values for Poll Wagyu Nightfall heterozygous plooed bull that didn't sell at auction in 2019
Midnight semen sold for $1,700 a straw last year and for $533 in 2019.

Wagyu Fullblood Sale, Elders, 30th August 2019

85 lots were on offer and this proved abundant for buyers on the day and breeding females were highest in demand. Nine out of the 39 heifers on offer were sold (23%) while a third of those on offer were passed in. A Sahara Park heifer was sold at highest price of $4,250 for a double Suzutani in her sire over a Hirashigetaysau dam, but highest bid of $4,500 for a Sunland Itoshigenami/Itozurudoi/Kitateruyasudoi heifer with strong EBVs deserved more so was passed in.

Six bulls (also 23% on offer) sold and another three were passed in. Top price of $6,000 went to a Delta bull from Ginjo Marbelmaxx out of a Bald Ridge dam and second highest was $4,500 for a Sunland Michifuku bull out of a Kitateruyasudoi cow.

No semen was sold but ten embryos in two lots from Sahara Park grossed $7,400.

Chart showing association of bid price at Wagyu Sale on 30th August 2019 with $Indexes and Wagyu International indicatorsChart showing association of bid price at Wagyu Sale on 30th August 2019 with Maternal TraitsChart showing association of bid price at Wagyu Sale on 30th August 2019 with Carcass Traits

The association between Bid Price was generally positive with Australian BREEDPLAN EBVs and $Indices - except for the strong negative association with Maternal Traits. Bulls, semen and embryos with high growth, milk and scrotal size were generally offered lower Bid Prices. Value was strongly driven by carcass traits and Bid Price was positively associated with AUS-MEAT Marble Score, Marble Fineness and Eye Muscle Area EBVs for all classes on auction.

Despite lower volumes, the identical trends that had been in effect at the record breaking auction in May were evident again in August.

Wagyu Premium Wagyu Sale, Ruralco, 17th September 2019.

132 lots were entered and 125 were presented on auction day. 31% of bulls on offer were sold for a total of $55,250. Highest price of $18,500 was paid for Macquarie Wagyu P1537. This sire is exceptional because the excellent carcass traits from Kitateruyasudoi are complemented by growth from Hirashigetayasu and both his Marble Score EBV and growth EBVs - including 200 day, 400 day and Carcass weight EBVs are all in the Top 10%. Second priced bull was Trent Bridge P141 with strong carcass traits from Itoshigenami and Kitateruysudoi together with some maternal traits from Haruki II so he sold for $10,500. 5 lots of sold semen for $5,800 with top price of $275 but no embryos received a bid. 5 Females sold for a total of $11,100 with highest price of $3,750.

Generally, animals with strong carcass traits were in higher demand. The association was positive with $Indexes and wiCI for all classes and the association with wiMI was negative for most classes. The association with bid values for most maternal traits was negative in most cases. The priority placed on Marble Score and Marble Fineness is emphasised in the chart showing association with bids and carcass traits.

Chart showing association of bid price at Premium Wagyu Sale on 17th September 2019 with $Indexes and Wagyu International indicatorsChart showing association of bid price at Premium Wagyu Sale on 17th September 2019 with Maternal TraitsChart showing association of bid price at Premium Wagyu Sale on 17th September 2019 with Carcass Traits

Germany

Beef production in Germany is reviewed in this report and compared within the European Union (EU) before the Wagyu market is evaluated in detail.

Germany is second amongst the six main beef producers within the union in terms of cattle numbers. There were 12.7 million head of cattle in Germany in 2017, 27.6 million pigs, 1.6 million sheep and 0.1 million goats. More than one third of cattle are dairy cows and one third of the 1.1 million tonnes beef produced in Germany is from cows.

Regulations of the European Union are enforceable as law in all member states. The rules for beef labelling are covered by EU regulations but control in Germany is shared between several authorities at state or federal levels.

The European Union (EU) produced 7.8 million tonnes of beef and veal in 2017, the same quantity as in 2016. This has been driven by the end of milk quotas on 31 March 2015 which led to increased cow slaughter, as some of the smallest farms abandoned dairy production. Before then, there had been a downward trend in beef production through to 2013.
Almost one half of all the EU's beef production came from three Member States - France (18.4 %), Germany (15.8 %) and the United Kingdom (13.2 %). Two-thirds of veal meat was produced in three Member States; these were Spain (25.1 %), the Netherlands (23.0 %) and France (19.3 %).

EU productionConsumption EU

Over the past twenty years subsidies have been paid under the Common Agricultural Policy to compensate for low farm meat prices. However, despite EU subsidies, income in specialised beef enterprises remains lower than those of other agricultural production systems. The average farm price for beef in the EU is 379 € per 100 kilogram.
The real-terms price for cattle was +2.2 % higher in 2017 than 2016 on average for the EU as a whole. Although this was still lower than the highs of 2012 and 2013, it was about 10 % higher than the average price in 2010. While livestock numbers and meat production have grown in most EU Member States over the past decade, the rate of growth will slow over the coming decade, because of environmental constraints and consumers’ changing attitudes towards animal husbandry. While aggregate meat domestic use is expected to increase over the period from 2014-16 to 2026, most of this growth is due to growth in demand for poultry meat, with sluggish if not negative growth in demand for other meat types.
The proportion of people not eating or limiting their intake of meat in the population, and especially among younger consumers, is increasing in most EU-15 Member States, while generally ageing societies will be reflected in lower demand for meats in general. In Germany and Italy, small increases in consumption per head are projected while in France and Spain, meat consumption per capita is expected to decline. In Germany, Spain and Italy, the dominant meat type is pork. Over five years to 2013 in Germany there was a decline of 4.3kg pork, which represents a decline of 11%. Fresh pork in particular has been under pressure with steady falls in household purchases but even processed products have struggled. Pig meat has been losing market share to both poultry meat and beef and with demand for the latter in particular showing some improvement in recent years. Health concerns surrounding pig meat in its various forms have been building up for example among older consumers, who are traditionally large pork consumers. Concerns about safety of beef in Europe following the BSE outbreaks and the horse scandal when it had been labelled as beef have also reduced per capita beef consumption. In Germany a domestic campaign was launched. ‘4D beef’ mean born, bred, slaughtered and processed in Germany (D for Deutschland. Beef consumption increased in Germany despite a decline over most of Europe. Muslim consumers comprise almost 6% of the population and their meat protein intake mainly revolves around beef and poultry. The ‘4D beef’ is also considered to be responsible for the increase in retail pricing of 27% for minced beef price rose up to 6.9 EUR/kg while roast beef rose up 28% to 9.33 EUR/kg between 2004 and 2013. This rise aligns with increased numbers that have been slaughtered.
price
Germany is an exporting country with regard to the balance of trade in live cattle and beef. As far as live animals are concerned, this is mainly due to the export of calves to the Netherlands, whereas imports of live animals concern older animals, mostly coming from the Netherlands. With regard to the trade in beef, German beef principally goes to the Netherlands, France and Italy and beef imports mostly come from the Netherlands, Austria and Poland within EU.
48.1% of beef production in Germany is from bulls aged 1 year or more, and cull cows comprise one third. 58.8% beef production in Netherlands is from calves and young animal aged not over 1 year.
Germany is an exporting country with regard to both the internal and external trade in live cattle and beef. 48.1% of beef production in Germany is from bulls aged 1 year or more, and cull cows comprise one third. 58.8% beef production in Netherlands is from calves and young animal aged not over 1 year. The UK produces 42.6% beef production from steers/bullocks aged 1 year or more. Turkey and Romania produce beef mainly from cows (76.8% and 52.8%, respectively). Average beef prices paid per carcass from the major beef producing countries is strongly positive for steer and heifer offtake and strongly negative from bulls and cull cows. The proportion of calf offtake (veal) is also negative on overall price. Highest average price for beef carcases was highest in UK and Ireland with a combined proportion of steers and heifers of 70% of the total production. Lowest prices were in France, Germany and Spain with cull cows, bulls and calves comprising 85% of total carcass weight. Generally the retailers are increasingly the major drivers of change and they are dictating characteristics of the animals they want to buy in terms of age, carcass weight and breeds. However, France has engaged Meat Standards Australia to improve the quality of beef production.
More than forty different cattle breeds are encountered. Fleckvieh (Simmental) and Braunvieh (Brown Swiss) are the main breeds in the south of Germany, whilst in the north, German Holsteins predominate (both black and white, and red and white). These three breeds make up 80% of the cattle population. The remaining 20% is made up from 30 beef breeds and eight local breeds. Beef production in southern Germany is more extensive than in the north, where it is more concentrated and integrated.

Wagyu cattle breed

The Wagyu cattle breed was introduced through the importation of frozen embryos in 2004. Five years later the German Wagyu Association was registered and it has progressively grown to have 180 members. The superior eating qualities unique to Wagyu are not of the standard of beef that is typically produced in Germany. Biggest carcass with lean beef has been favoured by the trade across much of Europe and Continental breeds are popular.
The Wagyu breed is in a growth phase in Germany so very little Wagyu beef that is sold is 100% Wagyu because most of it is crossed over local dams so it is most commonly 50% Wagyu content and known as F1. Most cattle in Germany are dairy together with continental breeds so are large in size. Other beef breeds only comprise 20% of the beef population. I have seen an Angus seedstock herd and the impressive cows were large. For F1 production in Germany, the Wagyu genetics in sires and semen that is used needs to have high carcass qualities because size and milk production comes from the dam. This is typical of the requirements from terminal Wagyu sires in most markets - except where highly marbled Angus dams are used. In order to ensure the sustainability of the Wagyu breed, the rotation using the strains with their unique genotypes and phenotypes will drive demand for seedstock breeding. Some niches are used but generally sires with carcass traits are used over cows with maternal traits, and sires with maternal traits are used over dams with carcass traits. After a few generations the demand for high quality maternal bulls should equal the demand for high quality carcass bulls for seedstock breeding. There should be diversity across the female breeding herd with either maternal or carcass traits, but both are required for sustainability. Bulls and females that have been record breakers at auctions in Australia, such as Mayura Itoshigetani Jnr, have resulted from carcass sires over carcass dams to produce terminal offspring with about 25% maternal lines.
The Wagyu breed comprises many strains. The content of genetics that has been offered at auction and advertised lists of semen over the last few years has been reviewed. Correlations between Price and all criteria that are presented are tested in order to be able to identify which drivers are behind demand.

German Gala Wagyu auctions 2015-19

The European Wagyu Gala auction has been held annually at Münster since 2015 by Dr Hubertus Diers. Live animals and embryos from German breeders and embryos from consignors in USA of embryos are offered. There is a high clearance rate.
Highest price was 27,500 € for a heifer, Ms Dai Da La from Dr Christian Niewöhner. She was approaching two years of age and raised as an embryo from the Americas. GeneSTAR Marbling + 0.66 and Palatability index 588 came from Itohana, Itoshigefuji, Kikuhana and Terutani in the sire and Hirashigetayasu, Michifuku and Fukutsuru in the dam. Second price of 21,000 € went to a Hirashigetayasu over WSI Misako cow with Genestar Marbling + 0.71 and Palatability 497 with an Itomoritaka sired calf at foot. 26 females averaged 14,238 € and five bulls averaged 4,920 €.
In 2016, top price heifer calf, Elisif 793, also consigned by Dr Christian Niewöhner and from ET, earned 29,000 € when approaching her first birthday. Her credentials were: SCD AA tenderness 7 from an Itomoritaka/Sanjirou sire with an Hirashigetayasu/WSI Misako dam. 29 females averaged eleven thousand euros. Four bulls averaged six thousand euros.
In 2018 top price went to a bull for 43,200 €. Mr Kiku Star was not a year old and was tested SCD AA tenderness 10 and BC from Exon 5 and C/C in all the Tenderness markers and was described in the catalogue “tested perfect in all markers”. The embryo from USA was sired by Kikuyasu 400 from a Sanjirou/Itomichi dam and the predicted BREEDPLAN EBVs are illustrated in the chart to the left, below:

Predicted estimated breeding values for Mr Kiku Star top priced bull at Wagyu Gala auction in Germany 2018Predicted estimated breeding values for Mr Kiku Star top priced bull at Wagyu Gala auction in Germany 2019
Predictions from his immediate ancestors rate his breeding merit being above 2017 born calves for short gestation length, light birth weight, light backfat thickness, high retail meat yield and high ribeye area.
This year, top price seven month old heifer calf earned 41,000 €. Ms Itosanji II from Marblelution Genetics is another ET birth, with SCD AA and some Australian BREEDPLAN EBVs from Itozurudoi semen over a Sanjirou/Itomichi dam. The predicted EBVs are illustrated to the right, above, and show that most traits are mostly quite close to average. Superior ribeye area is inevitable from maternal grand-sire Sanjirou and is topped up by her sire Itozurudoi. The first homozygous polled purebred Wagyu heifer was sold on auction in Germany and went for 12,000 € to Wagyu-Genetics/Steffan Schäfer. A total of 32 females sold for an average of 7,753 €.
A very informative catalogue is prepared for each Gala. The GeneSTAR MVPs for 88% of females on offer were published in the first catalogue. The association between GeneSTAR Marbling and predictions of Australian BREEDPLAN Marble Score EBVs was positive (r = + 0.19), but the following year Exon 5 results had virtually replaced GeneSTAR MVPs in the catalogue. SCD and tenderness test results have been presented in all years. The results of these tests in females are illustrated in charts and the proportion each year is also shown. In 2015, 47% of females had SCD results and this increased progressively to 96% this year despite a low correlation of auction price with SCD result (r = + 0.11 in 2019 which is down from + 0.18 in 2015). The correlation of Price with Tenderness is erratic having been strongly negative (r = - 0.31) last year to strongly positive (r = + 0.44) in 2019. This indicates that other factors have more influence on demand. The proportion of Exon 5 tests has increased to 81% in 2019 but there was no association with price (r = 0.00) after a positive trend the previous year.
Chart of GeneSTAR Marbling MVPs for Wagyu on offer at German Gala auctionChart of SCD test results for Wagyu on offer at German Gala auctionChart of tenderness test results for Wagyu on offer at German Gala auctionChart of Exon 5 test results for Wagyu on offer at German Gala auction
For the first time, a few carcass traits and $Indexes from Australian BREEDPLAN estimated breeding values (EBVs) from predictions were presented in a Gala catalogue in 2019.
The first animals in Germany have been evaluated genomically by Australian BREEDPLAN but no animals that were in this offering have genomic EBVs so the accuracies of the EBVs are low because they are only based on predictions. Data from two years (2018-19) were pooled and checked for correlations with Price, Prefectural composition, SCD, tenderness, Exon 5 and GeneSTAR marbling. The distribution of predicted EBVs for major economic traits is shown in the chart below and to the left.
EBVs from Wagyu on offer at German Gala 2018 to 2019EBVs from Prefecture amongst Wagyu on offer at Wagyu Gala auctions 2018 and 2019

The diversity is broad because the line from highest to lowest covers the spectrum from +50% to – 50% within the Wagyu BREEDPLAN database. The average of animals that had predictions that could be calculated from the 2018-19 auctions was within 10 to 20% above Midpoint for a light birthweight, a low backfat thickness and ribeye area. The average was within 10 to 20% below midpoint for all growth, milk, scrotal size, marble score and marble fineness.

Composition by Prefecture is reported for most animals in the catalogue so trends were observed from the top third in composition by Prefecture.

A summary of Prices and characteristics from Predicted EBVs is presented in the table below:

Prefecture name

Content in top ⅓  

Average Price (€)

wiMI

wiCI

Tajima

> 69%

9,538

- 25%

-   5%

Kedaka

> 15%

7,169

-   1%

-   4%

Fujiyoshi

> 13%

6,219

-   7%

-   4%

Okayama

> 10%

6,231

- 12%

-   4%

Live animals with higher Tajima and Kedaka content earned higher prices.
My understanding of the distribution of bovine Growth Hormone (bGH) within Japanese Black (Black Wagyu) by Prefectures in Japan is compared with trends from data preseneted in the catalogues. The Nakadoi-kei strain (we call it Tajima outside Japan) from Hyōgo is mainly ‘B’ and ‘C’ bGH. Fujiyoshi-kei from Okayama and Itozakura-kei from Shimane are predominantly A and C. Kedaka-kei from Tottori and Iwate-kei from Hiroshima are both largely ‘A’. Carcass weight is highest from the ‘A’ allele of bGH and marbling and ribeye area is highest from ‘C’ allele of bGH.
Animals with higher Kedaka and Fujiyoshi content had stronger predicted EBVs for economic maternal traits ( – 1 to – 7% wiMI in the table above, compared with – 25% for Tajima). Hiroshima is not quantified in the Gala catalogues but instead they are included with Others. The closeness of predicted carcass traits between Prefectural groups suggests that sires with highest marbling breeding values have not used within this population that has been sampled because there is no advantage shown by the Tajima group (all are between – 4 and – 5% in the table above).
The ‘B’ and ‘C’ alleles (from BB, BC and CC test results from Exon 5) are the preferred variants in the preamble in the catalogue. I agree that this should apply to selection of Group ‘B’ and ‘D’ sires in the Wagyu Rotation but I have concerns when it is used as a general statement. Apart from the marbling anomaly, the bGH genotypes and their EBV predictions from the Gala align with those from Japan. I believe that compliance with the Wagyu Rotation is very important and the use of genomic EBVs and/or Exon 5 test results will resolve borderline cases. To align classification into Group for the Wagyu Rotation by matching Prefectural with bGH composition, Tajima fall into Group B and D, Fujiyoshi (Shimane), Itozakura and Okayama are Group A; and Kedaka, Tottori and Hiroshima are Group C. This designation can usually be made without the use of an Exon 5 test.
The economic value of single test results as demonstrated by the variable association with Prices paid at recent auction appears to be waning. Benefits between 1 and 4% in fatty acid profile have been obtained from the preferred SCD gene in research in Japan but there was no response in the field. SCD is one of a few genes that contribute to fatty acid content but ultimately oleic acid composition is more related to flavour and needs to be tested and EBVs to be established from whole genome analysis and incorporation into Australian BREEDPLAN. Similarly, tenderness in Wagyu is of lower importance in highly marbled beef from grain finishing but when older animals are turned off grass it is more relevant. Pressures on sustainability may bring a shift in offtake so if shear force is not being tested in the studies at Kerwee it should be considered sooner than later. The value of genomic breeding values of traits of economic importance, including carcass, growth and milk, from BREEDPLAN is gaining traction in Germany and with the addition of a few missing traits, it could become the one-test complete evaluation of breeding merit as early as a hair sample can be taken.

Wagyu semen in Germany

Wagyu semen has been advertised in the European Wagyu Gala catalogue.
Semen with highest value was from Red Wagyu/Akaushi sires with highest growth, birth weight, milk and scrotal size estimated breeding values. Top price was 55 € for a son from Judo. Black Wagyu sires with high marble score (+1.3), marble fineness (+0.22), eye muscle area (+0.5) and yield EBVs were on the low price of 29 € while one with higher growth and lower carcass quality was priced at 35 €. All of this semen was imported from USA.
GeneSTAR Marbling, Palatability and Tenderness results, and SCD, tenderness and Exon 5 test results were reported in catalogues or the USA Wagyu Association database.
The following year, eight Black Wagyu averaged 49 € each and one locally bred Red Wagyu composite sire cost 50 € per straw.
In the first year, prices were positively associated with maternal traits with a correlation of +0.91 with Wagyu International Maternal Indicator (wiMI). The prices were negatively associated with carcass traits with a correlation of -0.77 with Wagyu International Carcass Indicator (wiCI). The highest priced Black Wagyu semen was from a sire with SCD VV so the trend was negative between Price and SCD, but it was positive for the next two years and then weakened. There was a strong positive trend between price and Tenderness for the first two years, and then it decreased but remained slightly positive (+ 0.18 and + 0.17). The trend was slightly negative for Exon 5 and this is probably due to the preference in the market for growth. This is typical of a beef industry that is favouring growth, size and a lean carcass so this is in unison with the rest of the beef industry in Germany.
Another breeder, Wagyu-Genetics, had also advertised Wagyu semen on the internet and those prices were analysed too. Associations between prices and genetic test results and breeding values are presented in a chart.
Association of Price of Wagyu semen with henetic test results and traits in GermanyChart showing corelation of Prices of Wagyu semen in germany with predicted breeding values by Year
Over this period, the trend away from pricing more heavily for maternal traits by Wagyu DE can be viewed on the chart above and to the left. Wagyu-Genetics offers semen from locally bred sires and imported semen from USA and Australia. The semen from Australia includes some highly marbled bulls with strong carcass qualities so are sold at a higher price. This has the effect of revealing contrasting behaviour in the charts between Wagyu DE which has been strongly maternal trait/SCD and tenderness test result driven and Wagyu-Genetics which has a higher price for carcass trait sires. More detail showing correlations of Price with major traits in BREEDPLAN are shown in the chart above, to the right.
Not all of the sires with semen for sale have published single test or EBVs displayed so the analyses have been based on low numbers but some trends have been revealed. The breeding merit from an analysis of a prediction of mid-parent EBVs in Australian BREEDPLAN is shown below. Trends are displayed within the offer from Wagyu DE over a few years in the bluish bars and Wagyu-Genetic predictions are in red:
Chart with EBVs of semen advertised in Germany by Wagyu DE from 2015 to 2019 and by Wagyu-Genetics in 2019
The Wagyu breed comprises several strains and there is usually a bias in each animal towards either maternal or carcass traits. In some cases characteristics may be around average for both but it is rare for strong maternal traits to be carried together with carcass traits, and vice versa. Purchasers of Wagyu genetics over time will require both carcass and maternal traits so a full spectrum in semen should be on offer. The distribution within the major predicted EBVs from the two sources that advertised in 2019 is shown in the charts below:
Distribution within EBVs for semen advertised by Wagyu DE in the Gala catalogue in 2019Distribution within EBVs for semen advertised by Wagyu-Genetics on their homepage in 2019

Conclusions and the way forward

The Wagyu herd in Germany has origins from the foundation exports from Japan that have subsequently been imported from USA, Australia and Canada. Selection of the genetics has been mainly influenced by the Americas and most of the genetics in the catalogues has been sourced from USA. Single gene tests are also similar to those that are routine in USA. The Wagyu herd is rapidly growing with constant growth in membership of the German Wagyu Association. Most herds are small in number and the shift to Wagyu is within a population of beef producers that have more experience in industrial type operations were the market is driven by size rather than quality.
The bulk of beef produced in Germany is from young bulls and one third is from culled cows.
Consumption of beef per capita is quite low and one third of the intake is imported. Consumption of beef per capita is quite low and one third of the intake is imported. The market for high quality marbled Wagyu beef in Germany may need some promotion to be stimulated. Even though German beef is not considered to be of the highest quality in Europe, the small top end luxury market should be supplied by German Wagyu producers from their own genetics.
In order for high quality F1 Wagyu beef to be produced there is a requirement for high quality carcass terminal sires to cross over the large dual-bred dams that are more abundant. Some Wagyu breeders have started to measure breeding merit of their herds genomically and this should result in the identification of the best home-grown elite bulls. It is hoped that whole genome sequencing of Wagyu will one day be able to evaluate net feed intake, tenderness and oleic acid (fatty acid) content. Field trials have been underway at Kerwee Feedlot in Australia so those EBVs should be available sooner than later. If, and when, measurements have been made of tenderness, oleic acid, omega-3 and omega-6 fatty acids, one test from a hair sample taken at a young age will provide a complete evaluation of breeding merit through Australian BREEDPLAN at a young age. BREEDPLAN already covers a large and valuable array of maternal and carcass traits but a few extra steps would make it the one-stop analysis. Tenderness and feed intake/efficiency are tested in other breeds.  In the Australian Wagyu industry where grain finishing is common palatability is not a constraint so it is rarely tested. However this could change if the period of feeding grain is reduced or the finishing off grass increases. Testing of fatty acids in Wagyu genomically has been underway in Japan for some time so for the benefit of selecting for taste and to counter health concerns about fatty profiles in beef this work should be prioritized while the sustainability of beef is increasingly coming under scrutiny.
There has been a strong adoption of Wagyu breed by German beef producers and they can make the quickest genetics gain by cherry picking from best practices around the world.

References

AuctionsPlus, 2019. Auction results, Elite Wagyu Sale, 10th May, 2019.

AuctionsPlus, 2019. Auction results, Wagyu Fullblood Sale, 30th August, 2019.

AuctionsPlus, 2019. Auction results, Wagyu Fullblood Sale, 17th September, 2019.

Australian Wagyu Association, 2019. Database search on internet.

European Commission, 2015. Evaluation of EU beef labelling laws. Luxembourg: Publications Office of the European Union, 2015.

eurostat, 2018. Agricultural production - livestock and meat. November 2018

PrismaGen, 2016. European Wagyu Gala. 9/10 September 2016.

Steve Bennett, 2019. Factors influencing, and selection for, eating quality in Wagyu beef. Wagyu International technical reports.

Wagyu DE GmbH, 2018. European Wagyu Gala. 9 September 2018.

Wagyu DE GmbH, 2019. European Wagyu Gala. 7 und 8 September 2019.

WWS Germany, 2015. European Wagyu Gala. 11/12 September 2015.

 

Date of posting: 11th October, 2019

The report on Beef production and selection for Wagyu beef in Germany can be downloaded by clicking on this link.