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Net Returns from Using Genetically Superior Sires

Department of Dairy Science, Virginia Polytechnic Institute and State University, Blacksburg 24061

ABSTRACT

The net present value of a unit of semen from a genetically superior sire is compared with the net present value of a unit from a sire with predicted difference milk of zero. The method includes all ensuing female progeny and lactations in as many future generations as desired. Variables include conception rate for the initial unit of semen, probabilities of survival of cows to various ages, predicted difference milk and fat for the sire, price of milk, mature equivalent production factors to convert to actual yield, probability of female calves, age at first calving, calving interval, costs of extra feed and health care for daughters of superior sires, minimum attractive annual rate of return, years to recover investment, and the base price of a unit of semen from an average bull with predicted difference of zero.

For a fixed set of parameters, the net present value varies linearly with the predicted difference for dollar value (PD$) of the bull. In a typical example with milk selling for $22.05/100 kg, the net present value for semen from a bull with PD of +454 kg compared with an average bull is .39 PD$, .25 PD$, .05 PD$ for years of investment recovery 20, 10, and 4, the latter representing one lactation from the initial daughter. Returns are from milk only. Semen from genetically average bulls with high rates of conception is as valuable as semen from high PD bulls with average conception. Conception rate influences whole lactations in addition to genetic superiority.