Net Returns from Selection under Various Component Testing Plans and Milk Pricing Schemes

Expected economic returns of nine component testing plans under three milk pricing schemes were studied. Net return of a testing plan was value of genetic gain, through index selection, minus additional testing and feed costs over 25 yr. Feed cost was dependent on fat and protein content of milk. Annual net returns (annuities) were $43 to $65 per cow of which 3 to 6% was contributed by component testing. This was 6 to 12% when prices for protein or solids-not-fat were equal to price of fat. Under the price scheme with milk volume and fat, fat testing and fat with protein testing were economically acceptable. Fat testing was advised. Under the price scheme with milk, fat, and solids-not-fat, fat testing resulted in highest net return. Also fat with protein or fat with solids-not-fat testing provided a positive return. Fat with solids-not-fat testing became the most profitable plan with solids-not-fat: fat price ratio above .7 or with cost of solids-not-fat testing reduced by 50%. Under the price scheme with milk, fat, and protein, fat testing had highest return. Protein testing became acceptable with protein to fat price ratio above one. Component testing was not advised for nonofficial Dairy Herd Improvement. Changing feed prices, discount rate, and selection intensity did not alter choice of testing plans.