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Dairy genetics and farm profitability: Investments and returns

Rebecca Weir

Summary

This Extension program takes academic research and provides meaningful transitways to disseminate research results to applicable audiences. The delivery plans include in-person presentations, a podcast recording, two popular press articles, and an online fact sheet. For the research component, we analyzed lifetime net merit (NM$), which is a genetic selection index based on the weighted average of economically relevant traits to the dairy cow. It is measured in dollars as the expected lifetime profitability of a cow. The objective was to evaluate the association between average sire net merit management decisions and farm profitability for Minnesota dairy farms from 2012-2018 using a unique herd-year dataset (n = 227) containing production data for dairy cows, sire NM$, and the respective financial information for the farm. We analyzed the net merit index and several of the traits. Ordinary least squares models were estimated for four profitability measures: operating profit margin (OPM), rate of return on assets (RROA), net farm income (NFI), and net farm income per cow (NFI per cow). Results indicated that herd sire net merit has a positive and statistically significant relationship with RROA, NFI, and NFI per cow. A few of the individual net merit traits held a significant relationship with profit, but most did not. The results from this study suggest that decisions related to genetic selection are valuable for a farm’s profit, and confirm that when selecting genetics, it is most effective to select sires based on an economic index, rather than specific traits.

Details

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