Adjustment of a Net Income Function for Opportunity Cost of Postponed Replacement on a Lactation Basis

Abstract

Opportunity cost of postponed replacement is the income forfeited by keeping a cow an additional lactation and is estimated by the income produced by an average replacement. We studied the effect of refining estimated net income by calculation of an opportunity cost for each lactation. After edits, the data consisted of records for 2,982,001 Holstein cows from herds classified between 1983 and 1992. Prediction factors were developed for net income and herd life so that opportunity cost could be estimated from cows with shorter herd-life opportunities. Within-herd correlations of net income estimated from 84 mo of opportunity for herd life compared with that predicted from cows alive at 36, 48, 60, and 72 mo were .46, .59, .72, and .76, respectively. Corresponding correlations for predicted herd life totals at the same ages were .28, .36, .41. and .47. Opportunity costs that were specific to lactation-herd-year were $35 higher than opportunity cost from first freshening to all lactations for 84 mo of opportunity. Higher costs reflect phenotypic trends of $31 more net income over 13 fewer d of herd life for cows with 84 mo of herd-life opportunity. Accurate adjustment of net income totals for opportunity cost is necessary when economic weights are developed for traits in the aggregate genotype. © 1995, American Dairy Science Association. All rights reserved.