Invert, always invert.

Prime Future 180: the newsletter for innovators in livestock, meat, and dairy

“Invert, always invert.” - Charlie Munger

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If one topic has been in the beef & dairy air in 2023, it's enteric methane emissions in cattle. Much effort is focused on directly reducing enteric methane emissions. As you know, the challenges in most of these direct approaches are many:

With the GWP100 vs GWP* debate, there's the question of how big of an issue enteric emissions are.

With wild claims being thrown about by some methane cowboy companies of virtually eliminating methane emissions, there's the question of how much methane we can reduce without compromising performance and productivity.

With the discussion ramping up louder and louder, there's still the inevitable yet unanswered question: who is paying for these methane reduction initiatives?

And with all of that noise, some nuances often get overlooked; some nuances that suggest the need to invert the problem entirely.

Enter Charlie Munger’s admonishment to “invert, always invert”. And Vytelle.

I am delighted to present a Sponsored Deep Dive with Vytelle as we dig into some of the overlooked nuances around enteric methane, an inversion that creates a reliable path forward for producers, and a potential inversion for the entire industry.

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Vytelle is a global precision livestock company headquartered in Kansas, USA. They operate in 22 countries and are the fastest-growing IVF company with 16 global labs.

Vytelle is reshaping how cattle producers worldwide optimize their herds. Their solutions reduce uncertainty to help producers make their most important mating and reproduction decisions to ensure that meat and milk are viable proteins for generations to come.

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I spoke with Lisa Rumsfeld, VP of Business Strategy and Development at Vytelle, who spends her time embedded in these topics as she works with producers around the globe. Any quotes below are from Lisa.

Let's start with 3 considerations that are commonly - and mistakenly - overlooked in the enteric methane discussion.

(1) Individual animal variation.

"Not all animals are the same; there is a huge variation between low and high emitters. We know this from the past & current research being done to capture the data."

This is not surprising to anyone who works with livestock; animal-to-animal variation is natural and exists with any possible trait or measurement. But variation is not bad.

"With reference to methane emissions or any trait of interest, there will be a typical bell-shaped curve. Within a herd, we would see this variation with regard to methane emissions. It is this variation that creates the opportunity to identify and select for those desirable traits.

Once we identify and start selecting, genetic change is Permanent in the herd. With each generation interval, that impact will stack and Compound in the herd, creating a larger effect over time."

Of course, there is also variation within breeds and across breeds...within a production system and across production systems...within a country (or continent) and across a country (or continent). And so on.

The more variation exists, the more data is needed to understand the variation and reach sound conclusions. But....

(2) We lack the capability to cost-effectively accurately measure enteric methane emissions.

Currently, the only way to measure enteric methane emissions is through heavy infrastructure measurement units that a cow walks into. Because of the limited purpose of the units, the size, and the cost, these units are only found in research settings, which means there is a lack of data.

Lisa expanded on this:

"It's the Wild West when it comes to methane measurement. There's a lack of consistent protocols in how to measure; we need an aligned industry approach supported by research.

This is similar to the challenge ten years ago of a surprising lack of consistent protocols and inability to measure feed efficiency, which Vytelle has taken a leadership role in standard setting.

To make change at a genetic level, which is compounding and lasting, you need lots of standardized accurate data.

Based on the environment we work in and the tech available, this type of measuring is not easily scalable or affordable today.

And there's a concern that if we over-index for methane emissions, then we will compromise other traits that drive profitability and sustainability. How you measure methane does impact the heritability as different ways of measuring and recording methane are different traits (ie: methane recorded per visit or average methane produced per day).

To date, nothing antagonistic has been found to other performance traits, but this is why we need more and more records with other recorded traits."

Clearly, all of this matters because getting it wrong could actually set the industry back.

"The potential use of inaccurate, non-standardized data built into breeding programs is backfiring. It is just as easy to replicate good traits as bad. The use of proven correlated traits like feed efficiency is a responsible choice today while important research around enteric methane emissions is being done. We know feed efficiency has a .31 heritability of methane production (Donoghue et al, 2020), and we know that DMI (dry matter intake) has a high phenotypic and genetic correlation to methane production."

Btw this is not an issue that is unique to enteric methane, cost-effective & accurate measurement is also a limiting issue when it comes to carbon dioxide emissions and carbon sequestration in soil.

It also feels like a bottleneck-type problem that needs entrepreneurs and venture capital to go solve. We don't need another marketplace; we need tools that can accurately and cost-effectively measure methane, carbon, or any other GHG of importance.

If billions of dollars are going to be poured into reducing emissions, it should be predicated on high-fidelity measurements – not theoretical models.

(3) Ongoing need for alignment around definitions, standards, and protocols.

"Methane traits do not yet have a scientific globally agreed definition or agreed upon parameters. Is it methane production (g per day, t per year), yield (per feed unit), intensity (per product unit), or utilization (per $, per ha)? Is the trait heritable? Independent? How does it impact other important traits?

If we don’t have agreed-upon definitions and parameters, we will struggle to rally the industry behind a consensus, and most importantly, it will be a struggle to convince the consumer to pay for any improvements.

How do we create a consumer-facing “score’ to help tell the story to incentivize a decision where value also works its way back to the producers making changes?

Research institutes and private entities have all taken different approaches to measure and then select against GHGs as there has not been scientific agreement on how GHGs should properly be recorded and the information utilized."

How we measure matters because that impacts the quality of the data. And obviously, the quality of the data impacts the quality of any decision made from the data, whether the decision point is around genetic selection, generating carbon credits, or anything else.

Lisa added, "It creates uncertainty in the market, causes confusion in the industry, and we risk the potential of chasing the wrong trait at the cost of other important economic and production traits. Current emission estimates are based on the number of head and are calculated on averages. This disincentivizes producers to make changes."

Before we get to two major “so what”s about the above nuances, let’s anchor back to an idea from Prime Future 169: The impending pop of the climate bubble:

Here's my hypothesis: when the climate bubble pops and the funny money dries up, only things like this that make economic sense for producers will be left.

Only the and will remain, the products & practices that deliver independent ROI and are demonstrably climate-smart.

It will be high ROI solutions that demonstrably drive the high-climate impact levers like feed efficiency, reproduction efficiency, etc.

Everything else, alllllll of the solutions that only offer climate impact, not economic impact, will fade away outside of niche supply chains that will adopt those products and practices in order to position themselves as premium.

So, given all this squishiness around quantifying enteric methane emissions, here are two ideas Vytelle is locked in on:

(1) While we are collectively aligning around how to measure enteric methane emissions, capture more & better data, and turn that data into decisions that allow producers to make better genetic selections that reduce emissions without compromising performance, productivity, and profitability, there is another route.

The other route, while an indirect route to reduce emissions, is a known and established route to improve profitability and reduce enteric methane emissions.

That known route? Optimizing for feed efficiency.

"This chart below shows the compounding and permanent impact that measuring and selecting for feed efficiency has had in the Vytelle Database with our progressive breeders measuring and selecting. We have improved feed efficiency over the past 15 years 32% in our top herds and, indirectly, enteric methane emissions. This is a massive permanent and compounding impact."

The point is not that we ignore enteric methane emissions as a trait in genetic selection; the point is that while more research is being conducted and the industry's capabilities around data collection, protocol alignment, and genetic evaluation are converging, that we focus on what we know delivers increased profitability to the producer and reduces emissions.

(2) What if we treated methane emissions as a pre-competitive issue?

As a parallel, think of how the packers treat food safety. They work together to find solutions that can be shared across the industry. They do not differentiate around food safety. Food safety is seen as one of those topics that consumers expect to be handled as a basic condition of being in the business.

Food safety is one of those topics where if one packer gets a sneeze, the entire industry gets a cold.

An alternative path to the current chaos is for industry associations and organizations with research dollars to fund the build-out of industry standards that can drive alignment.

The interesting thing about this approach is that until true market incentives exist in a strong enough form to go all the way up the value chain, the decisions producers make, like genetic selection for feed efficiency which is high impact on profitability and a proxy for low methane emissions, will create an impact that is compounding, permanent, and cumulative.

And over time, as those genetic offspring work their way through the industry, more efficient cattle will further reduce emissions beyond the borders of any one packers' supply chain.

It will be an industry-wide benefit, eventually.

Which makes it a market-wide benefit, eventually.

The downside to genetic selection as the most effective way to reduce emissions is that it takes a long time, even more so in beef than dairy, because of industry structure and industry norms.

That's why Vytelle's commercial offering centers around accelerating genetic progress through the use of IVF and creating embryos that enable producers to make decisions that advance their herd profitably and sustainably….faster.

My takeaway from discussions with Vytelle is that while we don't want to wait to move on enteric methane emissions, we don't want to get ahead of our skis, aka moving ahead of sufficient data to base significant decisions.

But there's no reason we have to get ahead of our skis. Two paths can run in parallel:

1. Accelerate enteric methane research, measurement, data collection, protocol agreement, etc.

2. Double down on what we know can currently be easily quantified and selected for, that will deliver profit outcomes for producers and sustainability outcomes for the market: selecting for feed efficiency and using IVF to get there faster.

Meanwhile, there is an opportunity for the industry to think about growing the pie by making enteric methane emissions a table stakes issue that is pre-competitive, much like food safety.

The interesting thing is that genetics is a long game from the standpoint of leveling up the global cow herd, whether in feed efficiency or enteric methane emissions or any other trait. But it’s also a short-term game at the individual producer level from a profitability standpoint.

Genetic progress creates the rare scenario where short-term wins enable longer-term wins.

Here’s to inverting problems and finding the practical “AND solutions”.

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