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ARS Home » Northeast Area » Beltsville, Maryland (BARC) » Beltsville Agricultural Research Center » Animal Genomics and Improvement Laboratory » Research » Publications at this Location » Publication #351508

Research Project: Improving Dairy Animals by Increasing Accuracy of Genomic Prediction, Evaluating New Traits, and Redefining Selection Goals

Location: Animal Genomics and Improvement Laboratory

Title: Lifetime Net Merit vs. annualized net present value as measures of profitability of selection

item SCHMITT, M - University Of Florida
item Vanraden, Paul
item DE VRIES, ALBERT - University Of Florida

Submitted to: American Dairy Science Association Proceedings
Publication Type: Abstract Only
Publication Acceptance Date: 3/8/2018
Publication Date: 6/24/2018
Citation: Schmitt, M.R., Van Raden, P.M., De Vries, A. 2018. Lifetime Net Merit vs. annualized net present value as measures of profitability of selection. Journal of Dairy Science. 101 (Suppl. 2):182(abstr. 173).

Interpretive Summary:

Technical Abstract: Current USDA linear selection indexes such as Lifetime Net Merit (NM$) estimate lifetime profit given a combination of 13 traits. In these indexes, every animal gets credit for 2.78 lactations of the traits expressed per lactation, independent of its productive life (PL). Selection among animals with different PL is an example of investment in mutually exclusive projects which have unequal duration. Such projects are best compared with the annualized net present value (ANPV) technique. The objective of this study was to compare the ranking and value differences between NM$ and ANPV for the top 1539 Holstein sires for NM$ available in the December 2017 genetic evaluation from the Council on Dairy Cattle Breeding. To calculate the ANPV, economic weights from USDA estimates were multiplied by the PTAs of single event traits. Heifer conception rate was recognized at first calving and livability at the end of life. The economic weight of PL was converted from a marginal value of $21 per lactating month depreciated over the standard length of 2.78 lactations, to a replacement cost (-$1500) at the beginning and a salvage value ($800) at the end of life. All other traits were considered lactation dependent, and the economic weights were multiplied by the number of expected lactations (2.78 + PTA for PL/10). The values for all 13 traits were discounted and converted to ANPV to compare animals with different investment horizons on the same common horizon. Correlation and rank correlation between NM$ and ANPV was 0.993 for the group of 1539 bulls. However, 32% of bulls had NM$ deviations greater than $9.90 with the same ANPV value. Within the highest 300 NM$ bulls, correlation and rank correlation between NM$ and ANPV was .964 and .943, respectively, and the largest changes in ANPV rank from NM$ rank were -96 and +117. Bulls with a combination of low lactation income and high PL resulted in a decrease of ANPV rank compared to NM$ rank. In conclusion, the re-ranking of bulls based on two different measures of profitability suggests that further discussion is warranted about construction of selection indexes for genetic selection.