Relative Net Income Research Articles

Agricultural and Forestry Land and Labor Use under Long-Term Climate Change in Chile

The appropriate design of land-use and rural employment policies depends upon the anticipated performance of the farm sector in the context of expected climate changes, especially with respect to land allocations to potential activities. Concerns over the possible net benefits of land-use changes are particularly acute in lower- and middle-income countries, where agriculture tends to be important in employment, income generation and foreign-exchange earnings. This paper presents an analysis of the expected impacts on land use in Chile of projected climate-change scenarios in 2040 and 2070. We developed a farmland allocation model with associated labor employment at the municipal level driven by expected relative net incomes per hectare, constructed from local average per-hectare yields, regional average output prices and per-hectare production cost estimates. The sensitivities of cropland allocations to relative net-income changes were estimated using historical land allocations at the municipal level derived from the last two Chilean Agricultural Censuses. The results show that the impacts of climate changes will be mitigated by land-use adaptation, the main export-earning crops tending to move south; in aggregate, agricultural employment will decrease in all the climate-change scenarios; forestry and agriculture would likely suffer a loss in net-income generation under severe climate-change scenarios.

ECONOMIC EFFICIENCY OF IRRIGATION AND MINERAL NUTRITION IN WHITE HEAD CABBAGE SEED PRODUCTION IN CENTRAL CHERNOZEM REGION

The combined use of fertilizers and irrigation allowed us to obtain maximum seed yield of white head cabbage up to 1,01 – 1,18 t/ha. The best results were obtained when N120P180K120 was applied after one watering after planting. In this case, the relative net income was 1357 rubles/ha and the level of profitability reached 64.8%.

Optimum Model for Analyzing Lifetime Profitability of Holstein Cows

This study was on the relative net income (RNI) for 18,286 Iranian Holstein cows from 799 herds, with first freshening between 1991 and 2000. Two kinds of production system, which differed mainly in milk pricing system and feed cost, were considered. Four different models adopted from the literature were examined to find the optimum model. They differed by the cost of rearing and growth after first calving and they needed different amounts of economic data at the farm level. Results showed that four measures of RNI were highly correlated (>0.96) and could be used equally to measure lifetime profitability of cows. Therefore, in herds without a regular system for recording economic and management data, use of the simplest model is recommended. Multiple regression analysis revealed that RNI was affected by age at first freshening, milk yield and days of productive life (DPL), regardless of production system, and a similar breeding goal could be defined for the two systems. Multiple regression analysis of RNI showed that in order to obtain an unbiased estimate of economic value for DPL, the per day milk yield, not total lifetime milk yield, should be included in the regression model along with DPL. Regression analysis suggested that it is possible to predict RNI using information on age at first freshening along with the length of first lactation and per day milk yield with a coefficient of determination ranging from 0.44 to 0.47.

Evaluating Sire Selection Practices Using Lifetime Net Income Functions

Dairy farmers do not take full advantage of opportunities available for genetic improvement through use of artificial insemination, perhaps because economic advantages of good sire selection may not be fully recognized or understood. This study was undertaken to document differences between use of AI and non-AI bulls and to develop prediction equations to compare lifetime economic merit of future progeny from alternative sire selection policies. We describe the use of two methods of measuring lifetime economic merit, with and without adjustment for opportunity cost of a postponed replacement. Comparison of lifetime relative net income adjusted for opportunity cost on groups of cows sired by different kinds of bulls showed that daughters of proven AI bulls generated $148 and $120 more lifetime net income under fluid and manufactured milk market conditions than daughters of non-AI bulls. Daughters of proven AI bulls produced $60 more than daughters of AI young sires in progeny testing programs at the time of daughter conception. We developed prediction equations from combinations of genetic evaluations for production, productive life, SCS, and linear type traits on sires to predict lifetime relative net income of progeny produced from alternative sire selection strategies. Prediction equations explained 14 to 18% of variation in relative net income (not adjusted for opportunity cost), but herd and year of first freshening accounted for considerably more variation than did genetic evaluations on the sire of the cow. Finally, two independent data sets were used to develop and test predictions of lifetime relative net income adjusted for opportunity cost using genetic evaluations based on the eight traits included in the Merit indexes for the sire of each cow. Prediction equations from odd numbered herds were used to predict lifetime economic merit in even numbered herds and vice versa. Coefficients of determination ranged from 0.088 to 0.103 and averaged 0.004 higher than prediction equations with Net or Fluid Merit. Accuracy of predictions showed that Net and Fluid Merit were robust and useful indexes that accurately identified bulls whose daughters generated highest lifetime economic merit.

Relationships of Sire Predicted Transmitting Ability for Somatic Cell Score with Measures of Daughter Performance

The relationship between sire predicted transmitting ability (PTA) for somatic cell score (SCS) and occurrence of mastitis in daughters was characterized with 304 Holsteins first freshening since 1991 in the Virginia Tech dairy herd. No direct sire selection for PTA SCS was practiced in the herd. Linear regressions of first lactation average SCS (1.3), number of cases of mastitis (0.80), days clinical (7.0), and number of treatments for mastitis (2.0) on PTA SCS were significant. Linear regression coefficients for second and third lactations were generally positive, but like quadratic and cubic coefficients in this study, were not significant. Relationship of sire PTA SCS and measures of lifetime (84 mo opportunity) performance were determined for 2,494,195 Holsteins born between 1979 and 1987. Linear coefficients from regression on PTA SCS for number of lactations (−0.31), days of productive life (−87.0), total days in milk (−72.2), lifetime milk (−1609.1), fat (−80.7), and protein (−48.2) production, relative net income adjusted for opportunity cost for fluid markets (+13.47), first lactation average SCS (+1.00), and first lactation mature equivalent milk (+429.9) were different from zero. Partial regressions holding PTA milk or PTA protein constant were substantially larger than linear coefficients. When PTA productive life was held constant, the relationship between PTA SCS and measures of herd life and lifetime yield became positive, and relative net income adjusted for opportunity cost variables became moderately positive. One of the major expenses associated with higher susceptibility (higher PTA SCS) may be shorter herd life.

The Effects of Inbreeding on the Lifetime Performance of Dairy Cattle

The effects of inbreeding on the lifetime performance of dairy cattle were examined using data for production, somatic cell score, and linear type for all Holstein cows that were scored between 1983 and 1993. The results of fixed and mixed animal models differed. Relative net income adjusted for opportunity cost for the 2,610,123 cows with an 84-mo opportunity for herdlife was depressed by $14.79 for fluid market pricing and by $12.40 for manufacturing pricing per 1% increase in inbreeding. Mixed model estimates of depression per 1% of increase in inbreeding were +0.55 d for age at first calving, –6 d for days of productive life, and –4.8 for days in milk. Inbreeding decreased the mature equivalent production of milk, fat, and protein during first lactation by 27, 0.9, and 0.8kg and the lifetime production of milk, fat, and protein by 177, 6.0, and 5.5kg, respectively, per 1% increase in inbreeding. Inbreeding had little effect on conformation traits. The effects of inbreeding were cumulative, and effects on lifetime profit functions were relatively larger than the effects on lactation traits. Registered cows had higher levels of inbreeding and larger standard deviations than did grade cows. Inbreeding in registered cows depressed relative net income adjusted for opportunity cost for fluid and manufacturing prices by $24.43 and $21.78, respectively; income was depressed $9.43 and $9.02, respectively, for grade cows. The difference between registered and grade cattle is likely due to the incomplete pedigree information in grade animals. Inbreeding among cows in this study was not high on average, but economic losses represented a significant cost to the producer.

Phenotypic Relationship of Yield and Type Scores from First Lactation with Herd Life and Profitability

Milk records from Ayrshire, Brown Swiss, Guernsey, Jersey, and Milking Shorthorn cows that first calved between 18 and 35 mo were combined with scores for linear type traits collected before 43 mo during first lactation to study herd life and lifetime profitability. Profitability (discounted relative net income) was the value of milk, calves, and cow salvage minus fixed costs, operating costs, and cow depreciation costs. Cows were included if they appeared only in a single herd and if the herd remained on test for 72 mo after birth date of the cow. Phenotypic correlations were computed for milk and fat yields and for 14 type traits during first lactation with nine variables for lifetime performance from 3895 Ayrshire, 7997 Brown Swiss, 20,179 Guernsey, 71,731 Jersey, and 628 Milking Shorthorn cows. Multiple correlations for predicting discounted relative net income for the four breeds with the most data were 0.43 to 0.46 from milk and fat yields (linear and quadratic effects) during first lactation, 0.11 to 0.29 from final score, and 0.21 to 0.33 from all type traits. Type scores had considerably less predictive ability than yield during first lactation for predicting profitability and had limited predictability after yield was included. Final score increased multiple correlations only 0.00 to 0.02 above that for yield for the same four breeds. Final score plus 13 type traits (linear, quadratic, and interaction effects) increased multiple correlations only 0.02 to 0.04 above that for yield. Because of the limited value of some of the linear type traits, an effort should be initiated to eliminate them from programs of breed associations.

Multiple-Trait Prediction of Transmitting Abilities for Herd Life and Estimation of Economic Weights Using Relative Net Income Adjusted for Opportunity Cost

Genetic and phenotypic (co)variances among linear type traits, final score, first lactation milk and fat yield, and 84-mo totals for longevity, relative net income, and relative net income adjusted for opportunity cost of postponed replacement were estimated with a multiple-trait sire model. Data were from 433,116 cows in herds participating in the classification program for conformation traits of the Holstein Association of America. Yield information from all cows in classified herds indicated that classified cows are not a random sample.Heritability of net income adjusted for opportunity cost was higher, .17, than unadjusted net income, .12, but the genetic correlation between the estimates of net income was high, .97. Adjusted net income also had high genetic correlations with first lactation milk yield, .80; fat yield, .60; and dairy form, .48. Heritability of longevity (months in milk to 84 mo) was .06. Adjustment of net income for opportunity cost lowered the genetic correlation with longevity from .84 to .70.Evaluation of lifetime merit using traits measured during first lactation with economic weights developed using adjusted net income was more accurate than indirect prediction of longevity; the approximate reliability of a first-crop AI sire for lifetime merit was .65 compared with .42 for longevity.

Correlations between measured performance and lifetime income in simulated dairy herds

A previously developed model of a dairy herd was utilized to simulate information on performance of 14 893 cows in 28 herds. Measures of performance were correlated with cumulative and daily net income from birth and first freshening after discounting 0, 5 and 10% annually. Correlations of present values of cumulative lifetime income with: first lactation production ranged from 0·52 to 0·59; lifetime milk ranged from 0·77 to 0·84; and relative net income ranged from 0·88 to 0·93. Correlations of lifetime daily net income with: first lactation production ranged from 0·65 to 0·67; milk per day of life was 0·83; and relative net income per day ranged from 0·78 to 0·79. These correlations were similar to the limited number of correlations reported for empirical data. Daughter milk per day would probably be best for sire evaluations on profitability. Milk per day is more highly correlated with present values of income per day than first lactation yield, even at high discount rates. Milk per day is also as highly correlated with income per day as relative to net income per day, which includes information in addition to milk yield.

Influence of Herd-Life Opportunity and Characteristics of Cows and Herds on Different Net Income Functions

A sample of one-third of all Holstein records available for national sire evaluations in January 1989 formed the data. Cows were included with opportunity for calving through 48, 60, and 72 mo of age. Net income functions examined were relative net income, discounted relative net income, and relative net income adjusted for opportunity cost of a postponed replacement. Means and standard deviations of net income functions increased with longer herd-life opportunity but less for the function adjusted for opportunity cost. Correlations between different herd-life opportunities within net income function were from .80 to .95 and were highest (>.94) between 60- and 72-mo herd-life opportunities. Correlations across net income function for the same herd-life opportunity were >.95. Relative net income adjusted for opportunity cost was less correlated with days of productive life than with the other two net income functions and was less accurately predicted by length of productive life, first lactation milk production, and age at frrst freshening. Within-herd management practices, except first lactation production, were nearly unrelated to relative net income adjusted for opportunity cost. For mixed herds, registered cows had higher net incomes by $9 to $28 each, depending on herd-life opportunity. Adjustment for opportunity cost could affect conclusions of studies based on net income functions.

Relationships Between Net Income, Days of Productive Life, Production, and Linear Type Traits in Grade and Registered Holsteins

Relationships between production, linear type traits, relative net income (with opportunity for calving through 60 mo of age), relative net income adjusted for opportunity cost, and days of productive life were examined in Holsteins. Records were available for 7479 grade and 64,245 registered cows. Correlations between relative net income adjusted for opportunity cost and first lactation product value were .55 and .59 for grade or registered cows, .21 and .23 between relative net income adjusted for opportunity cost and dairy form, and .16 and .20 between relative net income adjusted for opportunity cost and final score. Partial correlations (adjusted for first lactation product value) were lower than simple correlations for dairy form and final score but were higher for fore udder attachment and udder depth in both grade and registered cows. Prediction of relative net income, relative net income adjusted for opportunity cost, and days of productive life with first lactation product value and an additional type trait showed very little increase in R2 over use of first lactation product value alone. The increase in R2 was greater for days of productive life than for the two net income functions. The most profitable cows were high producers. Physical characteristics of the cow did not enable prediction of lifetime profit with appreciably greater accuracy than production alone.

Relationships Between Sire Evaluations for Linear Type Traits and Lifetime Relative Net Income from Grade or Registered Daughters

Relationships between sire evaluations for linear type traits and discounted relative net income were examined in Holsteins. Sire evaluations for income were determined separately for grade and registered cows, and resulting evaluations were merged with sire evaluations for linear type traits. Removal of sires with accuracies of evaluations for income, production, or type below .70 left 137 bulls with evaluations from grade and 79 with evaluations from registered daughters. Simple correlations between income and PD Dollars were .69 and .77 based on grade or registered daughters; those between income and angularity were .37 and .61, respectively. Partial correlations, adjusted for PD Dollars, were generally larger than simple correlations, positive for udder characteristics, but dissimilar for grades and registered for body traits. Prediction of income with PD Dollars and an additional type trait showed fore udder attachment, udder depth, and teat placement, each with positive regression, to be most useful in both grade and registered cows. Significant negative regressions for stature, strength, and body depth were found in grades only, and significant, positive regressions for PD Type and angularity were seen for registered cows only. Linear type traits contributed some useful information to prediction of lifetime profit after PD Dollars. However, with the exception of udder traits, traits of importance and signs of regression coefficients were not consistent between grade and registered cows.

Relationships of Lifetime Profit to Sire Evaluations from First, All, and Later Records

Sire evaluations from first, all, and later lactations for PD milk, fat, and dollars on 338 sires were used to predict deviated relative net income of individual daughters on a per day and lifetime basis. Eleven different relative net incomes, deviated from contemporaries, were calculated on 176,902 cows. Variation in individual daughter relative net income accounted for by sire evaluation was statistically significant but small (R2 = .001 to .005). Progeny group average estimates of deviated relative net income could be predicted with reasonable accuracy (R2 = .097 to .360). Models using PD dollars from first and later lactation evaluations had larger coefficients of determination for both per day and lifetime deviated relative net income measures than did models using milk and fat evaluations. Ability to predict progeny group averages for lifetime relative net income was superior (R2 = .199 to .360) to the ability to predict progeny group averages for relative net income per day. Later lactation sire evaluations were more useful than evaluations based on first lactations in the prediction of total lifetime profit. Profit per day of productive life was predicted more accurately from first lactation evaluations than evaluations based on later lactations.

Prediction of Lifetime Relative Net Income from First Lactation Production and Individual Type Traits in Holstein Cows ,

Official type classification data and Dairy Herd Improvement Registry production records of Holstein cows calving between January 1, 1967, and June 1, 1976, were used to estimate contributions of individual descriptive type traits evaluated in first lactation to lifetime profitability as measured by a profit function, relative net income. Relative net income estimated total profit from variables available through Dairy Herd Improvement. Contributions of individual type components to profitability were estimated from least squares constants adjusted for all descriptive type traits and for linear and quadratic effects of final score, first lactation production, age at first calving, herdlife opportunity, stage of lactation, and age when classified.For the model to predict total profit, regressions were most significant for udder traits. Significant positive regressions were for plain or coarse head; firmly attached high and wide rear udder; and desirable teat size and placement. Significant negative regressions were for narrow and pinched, loose or broken rear udder; lack of defined udder support; and winged shoulders.Differences in total profit for body, feet, and hind legs were relatively unimportant as compared with alternative codes for udder traits. Codes considered conformationally most desirable for rear udder, udder support, and teats were also most desirable for total profit.

Use of Dairy Herd Improvement Variables to Predict Lifetime Profitability ,

This study was to determine if relative profitability of cows could be predicted accurately from variables available through Dairy Herd Improvement. Lifetime income was calculated from sales of milk and fat, calves produced, and salvage value; lifetime expenses were initial value of the animal, feed, mastitis treatment, breeding, and fixed costs. Methods to estimate total profit and profit per day were relative net income function, calculated from lifetime milk and fat production, age at first calving, number of freshenings, and days of herd life; and best fit regression models with one to four variables. The best fit regression models with one to four variables for predicting total profit from relative net income function variables had squared multiple correlations .76, .94, .95, and .96 compared to .95 for relative net income. The best fit regression models of one to three variables for predicting profit per day yielded .69, .83, and .86 compared to .85 for relative net income per day. The relative net income function was successful for accounting for most differences among cows for profit but was less successful for predicting profit per day. The relative net income function appears to be useful for estimating lifetime profitability for establishing the relative importance of traits measured early in the animal's lifetime.