Effects of Planning Horizon and Conception Rate on Profit-Maximizing Selection of Artificial Insemination Sires

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Abstract
Net present values of semen were calculated for alternative generations of descendants in the planning horizon, conception rate to first service, and selection policy for milk income and type score for retail semen prices and real interest 3%. Data were active Holstein and Jersey artificial insemination sires whose semen was available for purchase after the January 1984 USDA Sire Summary. Objectives were to determine effects of length to planning horizon and conception rate on rankings of sires for profit. Two generations (daughter and granddaughter) for Holstein and one generation of descendants for Jersey sires were sufficiently long planning periods, because sires ranked nearly the same (rank correlation .gtoreq. .99) with longer horizons. Misspecification of conception rate (largest cost), planning horizon, or both reduced profitability of sire selection by .4 to 1.2 standard deviations of net present value. Because of modest semen prices of most profitable sires, the largest cost of inefficient sire selection by inaccurate specification of conception rate and planning horizon is the opportunity loss of future net income. Interaction of optimal sire selection with herd management is analogous to interaction of genotype by environment for profit.