Ten years after it was last investigated, the real-life financial value of AHDB’s genetic index, £PLI, has been reassessed by Promar International.

A new study to investigate the financial value of AHDB’s genetic index Profitable Lifetime Index (£PLI) to dairy farmers has published its findings some 10 years after this was last assessed. The Promar research used financial data from 410 milk-recorded Holstein herds (over 104,000 cows) using their Farm Business Accounts (FBA) service.

Read more: Autumn Calving Index released for AHDB

The study concluded that across these herds, each point of £PLI was worth £1.58 in additional margin per cow. This equated to an extra annual margin of £30,099 for a 150-head, top 10% UK herd (average PLI £197) compared with the same sized herd of average genetic merit (PLI £70).

Promar consultant, Tim Harper, who undertook the AHDB-commissioned study, said the results corroborated two earlier studies carried out in 2008 and 2011. He said: “Assuming there is no relationship between genetics and any other costs, the extra margin will translate directly through to pre-tax profit.”

The study avoided distortion by excluding income and costs which are unrelated to genetics. It also involved using income from milk, calf and cull sales and deducting those costs of production most likely to be affected by genetics, including feed, forage, replacements, veterinary, and AI and semen costs. This allowed for the calculation of a reliable assessment, in the form of a Genetically Influenced Margin (GIM).

When herds in the study were grouped according to their £PLI, the top 25% realised a GIM of £1,818 per cow/year. This compared with average herds at £1,670 and the bottom 25% at £1,529.

The improved financial performance of the higher £PLI herds was in part due to the increased value of milk production at an extra £283 per cow/year. However, this was partially offset by their higher use of concentrates, costing an extra £121 per cow/year.

“The study gave a clear economic endorsement of £PLI, but it is important to recognise that there are factors other than genetics which also influence the bottom line,” said Mr Harper. “These included feed and forage quality, cow comfort and other aspects of good herd management – most importantly the capability of those who manage and work on the farm.

“Higher genetic merit herds also tend to be larger, which in turn can impact on buying power and milk price,” he added. “However, none of these factors alone can account for the superior financial performance of the higher genetic merit herds, which significantly benefit from the animals’ innate health and performance potential.

“The important part played by genetics is unambiguous in this study, which confirms that the formula for £PLI has kept pace with modern market demands,” he said. “And with 410 farms and more than 100,000 cows included in the analysis, it reinforced our confidence in the index.”

Marco Winters, head of animal genetics with AHDB, said £PLI has been fine-tuned over many years to reflect the market demand for higher milk solids, alongside society’s drive for high health and welfare. “The index has also been adapted as the cow population has changed, correcting undesirable trends such as for poorer fertility or increased cell counts, which worsened in the 1990s, before indexes were developed for these traits," he pointed out.

“We’ve always known that animals with better genetics have a significant impact on a farm’s bottom line, and this study clearly shows how modern dairy producers are benefitting from better breeding.

"Today, £PLI has an emphasis of 34% production and 66% health/efficiency, with the latter including lifespan, fertility, udder and leg health and calving ease. It is designed specifically for year-round calving herds, so is the most relevant breeding index for this group, most of which supply milk on a level profile," said Mr Winters.

“We hope this work by Promar provides dairy producers with endorsed reassurance that by using £PLI as their primary selection index, they are breeding cows which will boost their performance and their bottom line.

"It was particularly reassuring to see that, in their role of fine-tuning the index, the Genetics Advisory Forum – which includes farmers and processors, together with breed society, milk recording, RSPCA, AI company and veterinary representation – had continued to bring together the broader needs of the dairy farming industry and kept pace with long-term market outlooks as well as consumer and farmer demands.”

Farmers can benchmark their herd’s £PLI using AHDB’s Herd Genetic Report (ahdb.org.uk/herd-genetic-reports) which is available for all producers who are fully milk recording.

Profitable Lifetime Index (£PLI)

This is AHDB’s within breed genetic index designed for UK dairy farmers with all year-round calving herds and represents the additional profit a high £PLI bull is expected to return from each of its milking daughters over her lifetime compared to an average bull of £0 PLI.

It included all traits which have been proven to be most strongly linked to profitability. These include milk production itself – and in particular weight of fat and protein rather than milk volume – and a range of functional type, health and efficiency traits.

These are included in the approximate ratio of 34% production and 66% health and efficiency. Their inclusion in the index is outlined in the pie chart.

Dairy producers are advised to use £PLI as a primary screening tool when breeding replacement heifers. They can then choose secondary traits they wish to focus on in their own herd to fine-tune their breeding decisions.