New Zealand Animal Evaluation has completed its annual update of Economic Values (EVs) as part of the December 2025 Animal Evaluation run, ensuring the Breeding Worth (BW) index continues to reflect current farm conditions and milk payment structures.
Each year, the EVs that underpin BW are reviewed to ensure they capture the latest on-farm costs and returns New Zealand dairy farmers face. The updates, which go live on 5 December, help maintain the accuracy and relevance of BW – the index used to rank cows and bulls on their ability to breed efficient and profitable replacements.
NZ Animal Evaluation Manager Andrew Fear says the annual update process keeps BW aligned with changing market realities.
“Breeding Worth is a vital tool for farmers, providing an independent measure of genetic merit that links directly to farm profit. These annual updates ensure it remains current and robust, helping farmers make confident, future-focused breeding decisions,” says Fear.
“For farmers, these updates ensure that the BW rankings they use to guide breeding are grounded in the most up-to-date economic conditions and milk payment structures. This helps with herd profitability, resilience and efficiency, as the market evolves."
This year’s update includes three key changes:
- Annual Economic Value update: EVs have been refreshed using the latest five-year averages for key on-farm costs and income streams.
- Inclusion of lactose: Lactose value has been incorporated into BW primarily through an adjustment to the milk volume EV. This follows the decision by Fonterra to add a lactose-based payment alongside fat and protein from the 2026/27 season. Farmers will not see a separate lactose trait; instead, its value is reflected primarily within milk volume EV, given the strong correlation between lactose and volume.
- Review of the National Breeding Objective model: DairyNZ have reviewed the model’s data sources to ensure they reflect New Zealand’s pasture-based systems and are future-fit. Key updates include revised rearing costs and an improved method for calculating milk energy requirements based on New Zealand data.
Fear says these refinements are part of DairyNZ’s ongoing commitment to continuing to improve the quality of information we provide to farmers.
“Farmers can expect to see some shifts in BW values and bull rankings, but these reflect the updated economic values – not changes in the underlying genetics of animals,” he says.
Fonterra strategic advisor Malcolm Ellis says the co-operative’s decision to add lactose into the framework that’s used to distribute the Farmgate Milk Price is about recognition of value.
“The value assigned to each component of milk is largely driven by supply and demand dynamics, with fat and protein continuing to contribute the vast majority of a farmer’s milk revenue,” says Ellis.
“Lactose also has a value, and Fonterra is fine tuning its parameters from the 2026/27 season to reflect this – where milk price payments will start to be split into fat, protein and lactose. For most farms, there will only be a small impact or no impact from this change due to the limited variability of lactose across milk profiles.
“NZ Animal Evaluation’s decision to recognise lactose within Breeding Worth helps ensure farmers have the most relevant breeding information ahead of the change that will come in from 1 June 2026,” adds Ellis.
For more information on Economic Values, Breeding Worth and the National Breeding Objective, visit www.dairynz.co.nz/ev and www.dairynz.co.nz/breeding-worth.
Media contact
Jacob Quinn
Acting Corporate Communications & Media Manager
p: 027 716 4197
e: jacob.quinn@dairynz.co.nz
