Impact of genetic progress on the profits of dairy farmers.

Is genetic progress really improving profits on dairy farms? This question was addressed by authors Roibas and Alvarez in a Spanish study which was published in the Journal of Dairy Science, Volume 93 of 2010, pages 4366 to 4373. The title of the paper is: Impact of genetic progress on the profits of dairy farmers.

It is widely recognized that genetic progress in dairy cattle in recent times has been close to spectacular. The progress is mainly due to the domestic and global availability of genetically superior sires, the widespread adoption of artificial insemination and the introduction of comparatively new technologies such as embryo transfer. However, evaluation of whether this progress manifests in increased profits has been less well documented, primarily because of variation in breed, environmental influences and managerial circumstances that often mask the genetic response.                                                                                                      

 In the present study data of Holstein-Friesians from 83 dairy farms in Northern Spain with similar environmental conditions were available. The datasets included farm management records, production levels, inputs and genetic indices of production and non-production traits. What, furthermore, makes this contribution unique in comparison to previous studies is that a milk production function was developed with adjustment for differences in genetic levels of cows across farms and making provision for increasing feed intake of cows as an adjunct to increasing genetic improvement; a fact which has often been ignored in economic analysis studies.

The results show that the increase in profits due to the genetic progress during the study period of records between 1999 and 2004, was equivalent to a 5% increase in income from milk sales. However, the managerial ability played an important role in exploiting the genetic progress. On farms with optimal management the increase in return on genetic progress was 22% higher than on farms with average management.

Bottom line: Genetic progress will increase profits but dairy farmers should realize that they will only reap the benefits if their level of management and observation is optimal.