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One size fits all? – The relationship between the value of genetic traits and the farm system

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  • Neal, Mark
  • Fulkerson, William

Abstract

The wide use of artificial insemination by dairy farmers has facilitated the development of a multi-billion dollar international market in animal genetics. In the major western dairy producing nations, each country has developed a single index to rank bulls, based on the value of traits they are expected to pass on to their offspring. One of the assumptions behind these indexes is that there is a positive linear relationship between profit (and welfare) with increases in a particular trait, regardless of the farm system. In this paper, it is shown, with examples, that the assumption of linearity is false. More importantly, it is shown that for a combination of reasons, including risk aversion, constraints and other issues, the optimal direction of genetic improvement for New Zealand dairy farmers on an individual and industry level could be quite different. Alternatives to the “one size fits all” index are described.

Suggested Citation

  • Neal, Mark & Fulkerson, William, 2006. "One size fits all? – The relationship between the value of genetic traits and the farm system," 2006 Conference (50th), February 8-10, 2006, Sydney, Australia 139884, Australian Agricultural and Resource Economics Society.
    • Handle: RePEc:ags:aare06:139884
    DOI: 10.22004/ag.econ.139884
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    References listed on IDEAS

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    2. David J. Pannell, 2006. "Flat Earth Economics: The Far-reaching Consequences of Flat Payoff Functions in Economic Decision Making," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 28(4), pages 553-566.
    3. Mark Neal, 2005. "The potential cost to New Zealand dairy farmers from the introduction of nitrate-based stocking rate restrictions," Murray-Darling Program Working Papers WP8M05, Risk and Sustainable Management Group, University of Queensland.
    4. Neal, Mark, 2005. "The potential cost to New Zealand dairy farmers from the introduction of nitrate-based stocking rate restrictions," Risk and Sustainable Management Group Working Papers 149854, University of Queensland, School of Economics.
    5. David J. Pannell & Steven G.M. Schilizzi (ed.), 2006. "Economics and the Future," Books, Edward Elgar Publishing, number 3349.
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