Fort Collins biotechnology firm is on the verge of making British dairy farmers forget all about mad cow disease.

Scientists at XY Inc. have discovered a way to sort animal sperm into either male- or femaleproducing cells, allowing livestock producers to pre-select the gender of their calves, colts and other animals.

After five years of research, XY recently accomplished the first sale of its "sexed sperm" technology to an English breeding company created by the Duke of Westminster.

The sperm-sorting technique is considered to be of "momentous importance in the history of cattle breeding," a British livestock executive said after its introduction last month.

That's because British dairy farmers can ensure that their cows produce virtually nothing but female offspring.

While that capability would be useful for any dairy producer, the issue is especially important in Britain because mad cow disease, also known as bovine spongiform encephalopathy, or BSE, has dropped the bottom out of the British beef market.

Male calves born to dairy cows normally would be sold for veal or beef, but mad cow disease has made the bull calves unsellable.

Britain's Farming News said interest from United Kingdom dairy farmers in sexed semen has been "colossal," with thousands of inquiries since the technology was introduced at a recent trade show.

In Fort Collins, officials said they are pleased that years of research finally are generating a payday.

"It's important to have the commercial validation," said Mervyn Jacobson, chief executive officer and president of XY Inc.

"Now we're not just something that a mad professor designed in his garage." XY was formed in 1996 as a joint venture of the Colorado State University Research Foundation and Cytomation Inc., a Fort Collins company that builds computerized machinery that speeds the spermsorting process.

XY uses technology developed by the U.S. Department of Agriculture to separate sperm cells that carry the X chromosome to produce females, from those cells with male-producing Y chromosomes.

Using artificial insemination to insert sorted sperm in a female mammal, the technology has a 90 percent success rate in producing an offspring of pre-determined gender, assuming that the insemination results in conception.

Great Britain was an obvious choice for XY's first commercial license sale because of mad cow disease, said George Seidel, a physiology professor in CSU's veterinary school and a longtime researcher in sexed sperm.

"BSE created a situation in Britain where male calves from dairy cows are worthless, economically," Seidel said. "The disease really isn't there anymore, but there's still the perception of a problem." Bull calves in the dairy industry also create a problem in countries such as England with a strong animal-rights movement because of the likelihood that the male calves will be raised for veal, which activists say is inhumane.

"The farmers are having to slaughter the bull calves on their own farms," Jacobson said. "It's been horrible. There's been a lot of stress and emotion, and some (farmers) are even suicidal." Jacobson said dairy producers would pay $55 for a straw of highquality sexed bull semen in place of $30 for a non-sexed straw.

He estimates that the increased economic efficiency of using sexed sperm in the cattle and pig industries could reach $6 billion a year.

XY also has used the technology on horses, although it has sold no licenses so far in the equine sector.

Depending on the species, breeders might use the process to produce either male of female offspring.

Breeders of polo ponies, for example, prefer mares, while stallions are considered better jumping horses. For cattle, males are better for beef production; dairy farmers obviously place a high premium on having guaranteed female calves.

XY plans to roll the technology out worldwide and is working with researchers and breeders in Argentina, Japan and Switzerland.

"Commercialization of sperm sexing will revolutionize herd management," Jacobson said. "This truly is a world breakthrough."