Breeding Worth is the industry index which ranks cows and bulls on their ability to breed profitable and efficient replacement dairy heifers.

How economic values (EVs) are calculated and why they change.

EV’s represent the value of different traits to New Zealand dairy farmers.

The economic values are applied on a ‘profit per unit’ basis. For example, one additional kg of protein creates $6 of additional profit for a dairy farmer.

Calculations account for milk production, historical, current and forecast milk prices, income from culls, surplus cows and bobbies, the cost of generating replacements and general dairy farm expenses.

Economic values are updated every year to reflect changes in these values, ensuring Breeding Worth remains relevant in an ever changing market environment.

February 2018: Economic Value Update

Effective emphasis on the individual traits within Breeding Worth.

In February 2018, the Economic Values used to calculate Breeding Worth will be updated. The table below shows the new economic values.

Key outcomes of the 2018 economic value update

• Economic value for milk protein will decrease, economic value for milk fat will increase

  The economic values for fat and protein are calculated by partitioning the milk price into a value for fat and protein, and then accounting for the cost of producing each component.

  The value of fat relative to protein has been increasing for the past three seasons, and this trend is forecasted to continue in 2017/18 season.

  This will result in a higher economic value for fat, and a lower value for protein following the February 2018 update.

• Value Component Ratio (VCR) method adjustment

  The method of calculating the VCR has been modified. The VCR value previously used was a 5 year rolling average of the Fonterra supplied VCR, going forward this will become a three year rolling average. The VCR supplied by Fonterra is a three year average in its own right, therefore this change aligns the VCR data with the appropriate milk price.

• Small shifts in the economic values for the remaining Breeding Worth traits

  The economic values for Liveweight, Residual Survival, Somatic Cell Score, Fertility, and Body Condition Score have experienced small shifts largely due to the flow on effect of a changing milk price.

• Liveweight economic value review

  From the update, several potential improvements to the Liveweight Economic Value were identified. NZAEL will review these in 2018 and aim to implement in the 2019 Economic Value update.

• How will this impact the BW of AE enrolled bulls?

  On average, Ayrshires sires will decrease by the most, with an average shift of (-) $6.8. Friesian, Cross, and Jersey bulls have shifts of (-) $0.2, (+) $4.9 and (+) $4, respectively.

  Of the bulls born after the year 2000, and with a Breeding Worth Reliability of greater than 75% the majority will move no more than plus or minus $10.

  

  

  

Key assumptions

Economic values are calculated assuming industry averages for animal production, feed requirements and farm systems. The following table is a list of the key averages which are incorporated into the Economic value calculations.

• Click here for key assumptions table

  Milk volume (litres/cow)	3,764
  Milkfat (kg/cow)	180
  Protein (kg/cow)	143
  Milksolids (kg/cow)	323
  Milkfat (%)	4.82
  Protein (%)	3.82
  Liveweight (kg/cow)	453
  Replacement rate (%)	21
  Total metabolisable energy requirements per lactating cow (MJME/cow)	55,517
  Total dry matter requirements per lactating cow (t DM/cow)	5.05

Economic Values explained