Estimating total economic merit for the Portuguese Holstein cattle population under new economic conditions

The objective of this study was to develop a total economic merit index that identifies more profitable animals using Portugal as a case study to illustrate the recent economic changes in milk production. Economic values were estimated following future global prices and EU policy, and taking into consideration the priorities of the Portuguese dairy sector. Economic values were derived using an objective system analysis with a positive approach, that involved the comparison of several alternatives, using real technical and economic data from national dairy farms. The estimated relative economic values revealed a high importance of production traits, low for morphological traits and a value of zero for somatic cell score. According to several future market expectations, three scenarios for milk production were defined: a realistic, a pessimistic and an optimistic setting, each with projected future economic values. Responses to selection and efficiency of selection of the indices were compared to a fourth scenario that represents the current selection situation in Portugal, based on individual estimated breeding values for milk yield. Although profit resulting from sale of milk per average lactation in the optimistic scenario was higher than in the realistic scenario, the volatility of future economic conditions and uncertainty about the future milk pricing system should be considered. Due to this market instability, genetic improvement programs require new definitions of profit functions for the near future. Effective genetic progress direction must be verified so that total economic merit formulae can be adjusted and selection criteria redirected to the newly defined target goals. © J.B.M. Almeida et al., 2013.