Presentation on proposed Net Merit 2014 made at the Council on Dairy Cattle Breeding's Open Industry Meeting in Maryland on August 5, 2014.

1. John B. Cole* and Paul M. VanRaden
Animal Genomics and Improvement Laboratory
Agricultural Research Service, USDA
Beltsville, MD 20705-2350
john.cole@ars.usda.gov
2014
An updated version of lifetime
net merit incorporating additional
fertility traits and new economic
values

2. CDCB Open Industry Meeting, Linthicum Heights, MD, August 5, 2014 (2) Cole and VanRaden
Introduction
 Lifetime net merit (NM$) is a selection
index for commercial dairy producers
 Cheese-, fluid, and grazing-merit
indices accommodate alternative
marketing & production scenarios
 The goal is to produce cattle that will
be profitable under market conditions
in 3 to 5 years.

3. CDCB Open Industry Meeting, Linthicum Heights, MD, August 5, 2014 (3) Cole and VanRaden
Why do we need to update NM$?
 New traits can better describe the
biology of the cow.
 Production economics change in
response to market demands and policy
decisions.
 Changes in evaluation methodology or
trait definitions can affect calculations.

4. CDCB Open Industry Meeting, Linthicum Heights, MD, August 5, 2014 (4) Cole and VanRaden
Trait
Relative emphasis on traits in index (%)
PD$
1971
MFP$
1976
CY$
1984
NM$
1994
NM$
2000
NM$
2003
NM$
2006
NM$
2010
Milk 52 27 –2 6 5 0 0 0
Fat 48 46 45 25 21 22 23 19
Protein … 27 53 43 36 33 23 16
PL … … … 20 14 11 17 22
SCS … … … –6 –9 –9 –9 –10
UDC … … … … 7 7 6 7
FLC … … … … 4 4 3 4
BDC … … … … –4 –3 –4 –6
DPR … … … … … 7 9 11
SCE … … … … … –2 … …
DCE … … … … … –2 … …
CA$ … … … … … … 6 5
Our indices have changed over time

5. CDCB Open Industry Meeting, Linthicum Heights, MD, August 5, 2014 (5) Cole and VanRaden
The economic situation has changed
 Milk prices are higher than predicted in 2010,
driven largely by a strong export market,
which increases the value of production.
 Replacement prices are lower and beef prices
higher than in 2010, which decreases the
value of longevity.
 Replacement prices have been volatile.
 Beef futures are forecast to remain high.

6. CDCB Open Industry Meeting, Linthicum Heights, MD, August 5, 2014 (6) Cole and VanRaden
Some economic drivers
 Forecast base milk price was $14.93 in 2010,
revised to $16.00 last fall, and revised to
$18.00 in July.
 Forecast replacement heifer price was
$1,910 in 2010, revised to $1,440 last fall,
and revised to $1,700 in July.
 Forecast cull cow price was $0.54/pound in
2010, revised to $0.65 last fall, and revised
to $0.75 in July.
 Forecast feed costs were revised up by about
15% in July.

7. CDCB Open Industry Meeting, Linthicum Heights, MD, August 5, 2014 (7) Cole and VanRaden
We have more traits to describe fertility
 Daughter pregnancy rate from lactation
data (1960s to present).
 Heifer and cow conception rates from
fertility data (2003 to present).
 Fertility traits benefit from multi-trait
processing.
 Genetic correlations
are high and many
observations are
missing.
DPR HCR CCR
DPR 0.04 0.41 0.87
HCR 0.10 0.02 0.54
CCR 0.70 0.10 0.03
Heritabilities (diagonal) and genetic
(above) and phenotypic (below)
correlations.

8. CDCB Open Industry Meeting, Linthicum Heights, MD, August 5, 2014 (8) Cole and VanRaden
Graziers face different challenges
 Graziers face different economic
pressures
 Notably, more fertility and less
longevity
 GM$ 2014 does not include dairy form,
as proposed by Gay et al. (2014).
 We’re working with the traits we
have.

9. CDCB Open Industry Meeting, Linthicum Heights, MD, August 5, 2014 (9) Cole and VanRaden
Trait
Relative emphasis on traits in index (%)
NM$
2010
CM$
2014
FM$
2014
GM$
2014
NM$
2014
Milk 0 -8 24 7 7
Fat 19 20 24 22 24
Protein 16 25 0 13 15
PL 22 16 19 11 19
SCS –10 -8 -5 -6 –7
UDC 7 6 7 8 7
FLC 4 3 4 4 4
BDC –6 -4 -4 -4 –4
DPR 11 4 4 14 5
HCR … 1 2 5 2
CCR … 1 2 3 2
CA$ 5 4 5 5 5
Where are we going?
More yield
(44%)
Less fertility,
more traits
(9%)
Less PL
(19%)

10. CDCB Open Industry Meeting, Linthicum Heights, MD, August 5, 2014 (10) Cole and VanRaden
Including recessive tests
• There are currently 20 recessives
tracked in US dairy cattle.
• Not all are undesirable (e.g., polled).
• Gene dosages are needed in order to
include haplotype or SNP tests in NM$.
• Could follow after Gengler et al. (2007) or
Van Doormaal and Kistemaker (2008).
• Estimating associated economic values
will be challenging.

11. CDCB Open Industry Meeting, Linthicum Heights, MD, August 5, 2014 (11) Cole and VanRaden
Feed costs are problematic
• New data for calculating the feed costs
for fat and protein are arriving.
• The current model says protein costs
more to make than fat.
• Intake data indicate even higher protein
costs, which seems counterintuitive.
• Phenotypic and genetic correlations
may differ, as with SCS.

12. CDCB Open Industry Meeting, Linthicum Heights, MD, August 5, 2014 (12) Cole and VanRaden
Subindices may aid interpretation
• Calving ease and stillbirth are combined
into a calving ability subindex, CA$.
• This idea could be extended to other
trait groups, such as yield and fertility.
• Emphasizes the economic value of the
group over individual traits.
• Traits can be added without changing
the interpretation of the subindex.

13. CDCB Open Industry Meeting, Linthicum Heights, MD, August 5, 2014 (13) Cole and VanRaden
Conclusions
• More emphasis on yield and less on
fertility & longevity in Dec. 2014 NM$.
• NM$ 2014 is correlated by 0.965 with NM$
2010, and by 0.991 with 2006 NM$.
• Increased genetic progress worth $8
million/year is expected if all breeders
select on NM$.
• The addition of GM$ provides a new
selection tool for graziers.

14. CDCB Open Industry Meeting, Linthicum Heights, MD, August 5, 2014 (14) Cole and VanRaden
Acknowledgments
• The members of SCC084, “Genetic
selection and mating strategies to
improve the well-being and efficiency
of dairy cattle”.
• Investigators on AFRI Integrated Project
2011-68004-30340, “Genomic Selection
and Herd Management for Improved
Feed Efficiency of the Dairy Industry”.

15. CDCB Open Industry Meeting, Linthicum Heights, MD, August 5, 2014 (15) Cole and VanRaden
Questions?
http://gigaom.com/2012/05/31/t-mobile-pits-its-math-against-verizons-the-loser-common-sense/shutterstock_76826245/