Comparison of cows on their potential for income production or cash flow over multiple calving intervals has been utilized for culling. The reliability of income projections several years in the future may be questioned when the economic environment is uncertain. The problem would be apparent when cull candidates differ in age since a mature cow would be selected for immediate productivity whereas the immature cow would be selected for her long-term potential. When an uncertain change in the economic environment (e.g., milk price) results in a difference in ranking of two cull candidates, the Bayes criterion of selecting the animal with the highest expected value for income can be utilized. A sensitivity analysis can then determine the dependence of the decision on variation in milk price or other states of nature. The value of perfect information would assess the financial risk associated with the decision. In an example analyzed with a probable 5% decline in milk prices, information that would reduce the variability in predicting animal performance had more effect on the payoff of the culling decision than more accurate predictions of future milk prices.
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W.R. Congleton (1988) studied this question.