Economic Appraisal of the Utilization of Genetic Markers in Dairy Cattle Breeding

Returns from the utilization of genetic markers in breeding programs have been computed in two ways. In the first approach, returns accrue from additionally improved milk yield that was due to marker utilization in selection. In the second approach, changes in returns from semen sales for a breeding organization operating in a competitive market are determined. The genetic effect of markers is taken to result from preselection of young bulls. Based on the literature, the increase in mean breeding value of young bulls as a result of marker-based preselection was taken to range from .15 to .45 additive genetic standard deviation. When additive genetic standard deviation is assumed at $67 with an interest rate of 5% and a time horizon of 25 yr, cumulative discounted returns from 1 yr of marker utilization ranged from $7 to $21 per cow for progeny testing and from $20 to $60 for an open nucleus. Additional discounted financial returns from increased semen sales range from $5.0million to $16.2million for a situation in which an AI firm utilizes markers during 20 yr and competitors do not follow. Lower costs are expected as technology improves, and improved statistical analysis should reduce the number of typings required. Thus, utilization of markers is expected to become financially justified.