Impact of genetic progress on the profits of dairy farmers

Abstract

This paper analyzes the role that genetic progress may play in improving profits of dairy farms. A novel data set of Spanish commercial dairy farms including management data and cow indices of genetic merit for production and nonproduction traits was used. In the empirical section, a frontier production function that included a farm genetic index for milk yield was estimated. To evaluate the full effect of genetics on farm profit it was necessary to consider the fact that feed intake increases with cows' genetic improvement. Results show that the increase in profits corresponding to the average genetic progress during the sample period is equivalent to a 5% increase in income from milk sales. Managerial ability plays an important role in exploiting genetics. Optimal management increases the return of genetics by 22% compared with farms with average management in the sample.

Valores econômicos para as características de produção, funcionais e de fertilidade em sistemas de produção de leite no Sul do Brasil

“…Selecting animals with better feed efficiency and the proper nutrition management, to reduce costs of diet components and their waste, causes reduction of costs, and consequently, increased income to the producer (Roibas and Alvarez, 2010).…”

Relationship between dairy cow genetic merit and profit on commercial spring calving dairy farms

“…The main disadvantage of such an approach is that the environments are less controlled; this can be somewhat negated, however, by accounting for confounding factors in the statistical model, where data are available. Nonetheless, few studies (Weersink et al, 1991;Steine et al, 2008;Roibas and Alvarez, 2010) have used data from commercial farms to quantify the association between genetic merit and performance. Two of the aforementioned studies were based on a limited number of herds and neither evaluated the association between a total merit index and profitability; 18 and 83 herds were included in the study of Weersink et al (1991) and Roibas and Alvarez (2010), respectively.…”

“…Nonetheless, few studies (Weersink et al, 1991;Steine et al, 2008;Roibas and Alvarez, 2010) have used data from commercial farms to quantify the association between genetic merit and performance. Two of the aforementioned studies were based on a limited number of herds and neither evaluated the association between a total merit index and profitability; 18 and 83 herds were included in the study of Weersink et al (1991) and Roibas and Alvarez (2010), respectively. Only one of the studies (Steine et al, 2008) used data from a large-scale field study in Norway.…”

Evaluating the double effect of land fragmentation on technology choice and dairy farm productivity: A latent class model approach

“…As in del Corral et al (2011), freestall housing is found to improve technical efficiency and the use of a milking parlor diminishes technical efficiency. On the other hand, the number of plots (z 1 ) reduces the technical efficiency of extensive 14 See Roibas and Alvarez (2010), Roibas and Alvarez (2012). 15 We will hereafter use the simple expectation of u to examine the determinants of farms' efficiency.…”