NBCEC Brown NBCEC Brown Bagger:Bagger:Economic Selection Economic Selection IndexIndex

Wade ShaferAmerican Simmental Association

Thou Shalt Select Superior Thou Shalt Select Superior Sires!Sires!

Second Second Commandment of Commandment of

Beef Cattle BreedingBeef Cattle Breeding

EPDsEPDs Anything ElseAnything Else

Use Use EPDs!EPDs!

11stst Step: Predicting Step: Predicting Genetic LevelGenetic Level

Where Do We Go From Where Do We Go From Here?Here?

MCE:4

CE:2

REA: .3

BKF: .01

MBL: .2

YG: .2

MW: 25

WBSF: -.12

STAY: 18

WW: 35

YW: 68

MLK: 10

TM: 27 CW:

20

BW: 3.2

Charting a Direction. . Charting a Direction. . . .

Typical Direction:Typical Direction:

0

20

40

60

80

100

120

1975 1980 1985 1990 1995 2000 2005 2010

OU

TPU

T

Output

More Desirable More Desirable Direction:Direction:

0

20

40

60

80

100

120

1975 1980 1985 1990 1995 2000 2005 2010

PRO

FIT

Profit

How Do We Select for Profit?How Do We Select for Profit?

Measure It!!!!

Profit = $Output - Profit = $Output - $Input$Input

Economic Selection Economic Selection IndexIndex

Lanoy Hazel, 1943

Measuring ProfitMeasuring ProfitProfit = $Output - $Input

(Output Traits)

(Input Traits)-=Replacement Rate

Cowherd IntakeFeedlot Intake

Calf SurvivalWeaning WeightCarcass WeightYield GradeMarblingSalvage Weight

(Prices)

(Costs)

Measuring ProfitMeasuring ProfitProfit = $Output - $Input

Price & Cost Assumptions:

Salvage price: $.45/lb Hay: $.0325/lb Pasture: $25/ac/yr Feed; fixed costs:• Phase 1: $.036/lb; $.51/d• Phase 2: $.039/lb; $.80/d• Phase 3: $.067/lb; $.80/d Carcass prices:• Base: $121/cwt• < 550 lb: - $15/cwt• > 950 lb: - $7/cwt• > 1000 lb: - $17.50/cwt• Prime: + $8.00/cwt• High Choice: + $3.50/cwt• Choice: + $1.50/cwt• Select: - $11.00/cwt• Standard: - $20.00/cwt• YG 1: + $4.00/cwt• YG 2: + $2.00/cwt• YG 3: $0.00/cwt• YG 4: - $15.00/cwt• YG 5: - $20.00/cwt

Biological AssumptionsWeaning weight: 550 lbFeedlot gain; intake:•Phase 1 (80 d): 2.51 lb/d; 26.86 lb/d•Phase 2 (50 d): 2.92 lb/d; 21.9 lb/d•Phase 3 (100 d): 3.81 lb/d;26.67 lb/dCow size: 1250 lbMilk production: 5283 lb/lactationPregnancy rate: 84%Dystocia heifers (direct): 20%Dystocia heifers (maternal): 20%Calf survival: 96%Harvest weight: 1277.8 lbDressing: 62.9%Carcass weight: 803.7 lbMarbling score: 5.14Yield grade: 2.8

MeasurinMeasuring Profitg Profit

High High YieldingYielding

YG3$121

YG2$123

YG2$123

YG3$121

YG4$106

YG4$106

YG5$101

YG5$101

Low Low YieldingYielding

YG4$106

YG1$125

YG1$125

Measuring Profit: Measuring Profit: Accounting for Biological x Accounting for Biological x Economic InteractionEconomic Interaction

All-Purpose Index (API)a

Terminal Index (TI)a

Bred to all-aged femalesRetain replacements

Bred to mature cowsNo replacements retained

aGeneral Assumptions: Sires mated to Angus cow herdIntegrated system selling on end product valuePrices/costs based on CattleFax prediction models

ASA’s Economic ASA’s Economic IndexesIndexes

5 Year 5 Year AssessmentAssessment

Indexes have been integrated more quickly than any technology we have ever introduced

Indexes have the potential to substantially increase the integration level of animal breeding technology

Indexes are Indexes are Highly Highly Marketable!Marketable!

sexyworksimple

Keys to Keys to MarketabilityMarketability

Prices and costs tend to maintain equilibrium over timeTend to be robust even when prices and costs not in equilibrium

Producer Producer Concerns:Concerns:Economic parameters are unpredictable:

Validated in other species Straightforward accounting process… methodology is

validated Bottom line… high probability of being more effective

than current “seat-of-the-pants” approach

One size fits all… doesn’t fit me:Population-wide indexes must necessarily cover entire production systemFew producers have data necessary to parameterize “customized” indexesStrong correlations between “customized” indexesCustomized indexes aren’t as marketable…reducing integration

Indexes aren’t “validated”: