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Title: ECONOMIC RESPONSE AND RISK FROM USE OF SELECTED HOLSTEIN SIRES IN ITALY, MEXICO, THE NETHERLANDS AND USA

Author
item KEOWN, JEFFREY - UNIV. OF NEBRASKA-LINCOLN
item MONTALDO, H. - UNIV. OF NEW ENGLAND
item Van Vleck, Lloyd
item Van Tassell, Curtis - Curt

Submitted to: World Congress of Genetics Applied in Livestock Production
Publication Type: Proceedings
Publication Acceptance Date: 8/21/1997
Publication Date: N/A
Citation: N/A

Interpretive Summary: The economic return from purchase of a unit of dairy semen may depend on the country where that semen is used because of the economic scenario of the country. This study estimated economic responses using stochastic (Monte Carlo) simulation of dairy herds in Netherlands, Mexico, Italy, and United States using proven or young pedigree selected or random young Holstein bulls from the United States. Income and costs were discounted for planning periods of 10 and 20 years. Each scenario was randomly replicated 1,000 times. The results were economically evaluated with three levels of risk aversion: neutral, moderate, and high. Optimum selection decisions were found to be different for the different countries and for the different planning periods. For a 10 year planning period or for countries with less economic response, the use of randomly chosen young sires (untested but low cost) would be favored. For a 20 year planning period, use of either proven or young pedigree selected bulls was superior to randomly chosen young bulls for neutral and moderate risk aversion. More pedigre selected young bulls were needed per year than proven bulls with high risk aversion.

Technical Abstract: Economic responses were estimated from stochastically simulated dairy herds using genetic evaluations of proven or young US Holstein sires available in January of 1996. Conversion equations, economic indices, and genetic, economic and managerial parameters for milk, fat and protein production in Italy, The Netherlands and the United States, and for milk yield in Mexico were used in calculation of sire profit and response for each country. Discounted cumulative revenue and semen costs to planning horizons of 10 and 20 years from a continuous selection model were used to estimate pro- fit. Proven and young sires selected on profit or the option of using 20 randomly chosen young sires at low semen cost per dose were evaluated. Results were obtained from 1,000 replicates for combinations of type and number of sires selected per year and cow herd size in each country. Results were evaluated with three degrees of risk aversion; risk neutral (profit), moderate risk aversion (LCL95) (lower 95% confidence limit for profit), and high risk aversion (utility) (profit - .06*variance of profit). Use of a 10-year planning horizon, or selection in countries with lower absolute economic responses, would favor use of randomly chosen young sires. Use of selected proven and young sires was generally superior to use of randomly chosen young sires for profit and LCL95 at year 20 for all combinations studied, but was inferior for utility at year 10. Optimum decisions were different for different countries, planning horizons and economic and management conditions. Effect of herd size on the ranking of strategies was small.