Net Present Value and Economic Merit of Sexed Semen and Splitting Units of Semen for Australian Holsteins

Net present value of an artificial insemination sire was expected profit per semen unit due to genetic improvement for daughter lifetime milk production. Net present values were calculated for top 40 milk evaluation Australian Holstein sires from 4 studs by varying one of conception or survival rates, feed cost, herd production, herd genetic merit, age at first calving or discount rate, holding remaining parameters at population average. Sire transmitting values for mature equivalent milk ranged 62 to 549 L and semen price $3.50 to $20. Average of cow transmitting values for mature equivalent milk was -97 L. By region, milk was priced $.13 or $.23/L. Selection policy was top 5 sires for net present value with equal semen purchases. As probability of female embryo increased from 50 to 100% at no additional semen cost, average net present value per unit of 5 highest ranked sires increased from $3.41 to $13.43 and from $20.58 to $48.76 for $.13 and $.23/L milk. This represents a scale effect with identical sires selected for $.23/L milk. However, average semen price of selected sires increased from $4,50 to $7.60 for $.13/L milk due to sire reranking. Assuming halves semen price and a .1 decrease in conception rate affecting both net present value and semen requirement, dairy farmers could afford to pay at least an additional $2.19 per whole unit of semen for milk priced $.13/L and $3.50 per whole unit for $.23/L milk if that unit were to be split.