Breeding for Profit Synergism Between Genetic Improvement and by hkksew3563rd


									Breeding for profit: synergism between genetic improvement and livestock production
                                     (a review)

                                D. L. Harris and S. Newman

                              J Anim Sci 1994. 72:2178-2200.

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   Breeding for Profit: Synergism Between Genetic Improvement and
                   Livestock Production (A Review)'

                                   Dewey L. Harris"92 and Scott Newman+

 "ARS, USDA, Roman L. Hruska U S . Meat Animal Research Center, Clay Center, NE 68933-0166
  and I A R S , USDA, Fort Keogh Livestock and Range Research Laboratory, Miles City MT 59301

ABSTRACT:         Fifty years of research in animal                     objectives are reviewed with attention to common
breeding and genetics are examined from four perspec-                   approaches. Where consensus is reached about a
tives: 1) genetic prediction, 2 ) animal testing and                    breeding objective ( i n economic form) for a class of
selection schemes, 3 ) dissemination of genetic im-                     livestock, this objective can be used in conjunction
provement, and 4 ) definition of breeding objectives in                 with genetic predictions to rank animals within a
economic form. Breeding in all classes of livestock has                 breeding population. Ranking without undue attention
moved from a purebred appearance orientation to a                       to herd of origin facilitates a pyramid-shaped hierar-
performance (either purebred or crossbred) orienta-                     chy of animals that can be fundamental to the
tion. Unfortunately, the evolution from a performance                   functioning of breeding enterprises contributing im-
orientation to an economic orientation is incomplete,                   provements to operations concerned with production.
especially for some livestock classes. Placing breeding                 Genetic improvements should flow from proven geneti-
objectives into a mathematical form on a sound                          cally superior animals to improved production sys-
economic basis is key to integrating modern develop-                    tems. The tiers of the pyramid need to be organized
ments in animal breeding into more purposeful                           relative to animals with differing levels of economic
industry programs. Procedures used to develop such                      evaluation.
        Key Words: Animal Breeding, Production Economics, Selection Index, Integrated Systems,
                                          Breeding Programs

                                                                                                J. h i m . Sci. 1994. 72:2178-2200

                       Introduction                                     developing his original ideas. His contributions to
                                                                        scientific knowledge and breeding methodology con-
  This paper is dedicated to the memory of Dr. Lanoy                    tinue to be pertinent and vital. With real insight, he
N. Hazel, one of those who, early in his professional                   stated the following in 1943:
career, initiated the sequences of research reviewed
here. Dr. Hazel died on October, 14, 1992, 50 yr after                      The idea of a yardstick or selection index for
                                                                            measuring the net merit of breeding animals is
                                                                            probably almost as old as the art of animal breeding
                                                                            itself. In practice several or many traits influence
                                                                            an animal's practical value, although they do so in
                                                                            varying degrees. The information regarding differ-
                                                                            ent traits may vary widely, some coming from an
                                                                            animal's relatives and some from the animal's own
   'Acknowledgment and appreciation are expressed to John E.                performance for traits which are expressed once or
Temple and Sharon Stark for manuscript preparation. Helpful                 repeatedly during its life. . . . These factors make
suggestions concerning a draft manuscript from Gary Bennett. Jim
Brinks, Gordon Dickerson, Bill Hohenboken, Kreg Leymaster, Mike
                                                                            wise selection a complicated and uncertain proce-
MacNeil, Chris Morris, Geoff Nicoll, Ra61 Ponzoni, Charles Smith,           dure; in addition fluctuating, vague, and sometimes
Terry Stewart, and Jim Wilton are acknowledged and appreciated.             erroneous ideals often cause the improvement
Also, stimulation from lively exchanges on the AGDG (Animal                 resulting from selection to be much less than could
Geneticists Discussion Group) electronic bulletin board is ac-              be achieved if these obstacles were overcome.
   2To whom reprint requests should be addressed: P.O. Box 166.
   Received June 18, 1993.                                                Despite considerable progress in the ensuing 50 yr,
   Accepted April 7, 1994.                                              these obstacles have not been fully overcome.


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                                            BREEDING FOR PROFIT                                                  2179

               In the 1940s, before electronic computers, young Lanoy Hazel performed calculations
            for his quantitative studies on a desk calculator.

                Foundation Papers                                 Hazel and Lush (1942) established the desirability
                                                               of a linear function of recorded traits as a basis for
   The primary purpose of this paper is to review              selection with greater expected response for an
several key publications, integrate ideas, and extend          objective than expected for other alternatives. Hazel
thought on industry application of economic breeding           (1943) developed such a linear function (selection
objectives following from Hazel’s (1943) concept of            index) of observations for specific animals, including
aggregate genotype. The aim is not only to compare             traits of these animals and of relatives to improve an
the approaches used across several livestock classes           “aggregate genotype.” The aggregate genotype was
and functions, but to elucidate common principles,             described t o “weight the gain made for each trait by
especially from the more integrated poultry and dairy          the relative economic value of that trait.” This
classes, so as to suggest future emphases in less              aggregate genotype represents a fundamental concept,
mature breeding industries. However, to provide                the breeding objective, that is seldom fully im-
supporting perspectives, we first briefly examine the          plemented in some livestock breeding industries.
development of statistical procedures for prediction of        Unknown to Hazel, Smith (1936) had presented a
genetic differences as follows from Lush (1947a,b).            similar approach for selection among plant varieties.
The design of livestock testing and selection following        Hazel’s paper was of landmark significance; it moti-
from Dickerson and Hazel (1944) is then considered.            vated and provided direction to many researchers
Following from Lush‘s ( 1946) “functional stratifica-
                                                               working with different classes of livestock for estimat-
tion,” we discuss how corporate breeders, artificial
                                                               ing genetic parameters and incorporating them into
insemination ( AI) studs, and organizations of breed-
ers have organized the production of improved genetic          indexes that could be used to effect genetic changes
products (frozen semen, chicks, crossbred gilts, bulls,        toward economic breeding goals. In spite of this,
boars, rams, etc.) to transfer and multiply genetic            industry implementation has been slow for some wool-
improvements in selected populations to improve                and meat-producing classes of livestock in the United
profitability of commercial livestock activities. The          States.
leverage of these functional arrangements is fun-                 Dickerson and Hazel (1944) studied the relative
damental t o implementation in industry of scientific          merits of performance testing and progeny testing as a
principles from the other lines of study being re-             basis for selection. These alternatives had evoked
viewed. Conversely, the implications of necessary              many subjective opinions about their relative merits.
industry structures should be recognized to orient             In addition to clarifying when each alternative is most
further development of scientific breeding principles.         effective and when they should be used sequentially,

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2180                                           HARRIS AND NEWMAN

this paper was the first inquiry on the design of                                         Genetic Prediction
genetic improvement systems to achieve greater
responses.                                                           Because of imperfect genetic control of the pheno-
   While reviewing the impact of the structure of                 type and because related individuals tend to have
purebred livestock industries on genetic change, Lush             similar genotypes, observations on members of the
( 1946) noted a ‘‘functional stratification” of breed             same family can be used t o increase accuracy of
organizations with “multipliers’ herds” intermediate              predicted genetic differences as shown by Lush
between a few “breeders’ herds” and the many “grade               (1947a,b). The limitation of Lush’s (1947a,b) ap-
herds.’’ A pyramid-shaped functional structure of                 proach was that it presumed equal family sizes and
breed societies is implied and the flow of genetic                did not consider other effects, such as herds or years.
improvement to producers has been an area of concern                 An early method for adjusting for non-genetic
to some breeding organizations. Practical implementa-             effects on performance data was the herd-mate
tions have occurred in commercial breeding with little            deviation procedure of Henderson et al. (1954). This
scientific study. With limited scientific documentation,          was used in dairy evaluations prior to more accurate
our review will involve considerable subjective obser-            procedures accounting for differing amounts of data
vation.                                                           contributing to deviations. Robertson ( 1955) sug-
   Lush (1947a,b) developed formulae extending the                gested a procedure for combining information from
concept of using observations on relatives, as in Hazel           predictions of genetic differences from different
(19431, to increase the accuracy of predicting genetic            sources. In a major step, applied to poultry breeding,
differences, but with a single trait and a one-way                Osborne (1957a,b) extended Lush‘s (1947a,b) formu-
classification structure of families of equal size. This          lae to family structures with both full-sibs and half-
initiated considerable activity in statistical prediction         sibs. But Osborne’s formulae also presumed equal-size
of genetic differences. Acknowledged for having                   families and some applications of his formulae were
provided advice on several of these papers, Cochran               not strictly correct. Henderson et al. (1959) first
( 1951) reviewed the statistical theory behind them,
                                                                  presented mixed-model equations for simultaneous
thus placing later studies on a firm statistical                  estimation of fixed effects and prediction of random
foundation.                                                       genetic effects but elaborated the principles through
   This review will include four subject areas: 1)
                                                                  several subsequent papers. Searle ( 1964) reviewed
genetic prediction, 2 ) animal testing and selection
                                                                  similarities and differences of herd-mate deviation
schemes, 3 dissemination of genetic improvement,
                                                                  procedures at use in New Zealand, Great Britain, and
and 4 ) definition of breeding objectives in economic
                                                                  New York.
form. Although largely studied separately, in applica-
                                                                     Henderson (1963) noted that, in Hazel’s (1943)
tion, interrelationships need to be recognized, and
                                                                  approach, optimum selection toward a breeding objec-
thus all four areas are reviewed in this paper. We will
                                                                  tive of a simple linear form
intentionally not review several pertinent aspects of
breeding research, specifically, experimental and field
data analyses contributing to genetic and phenotypic                                       H =    :
                                                                                                 t a;       PD;
parameter estimates and evaluation of selection re-
sponse, development of statistical procedures other
                                                                  requires selection on an index or criterion
than those involved in genetic prediction, and cross-
breeding systems and use of breed resources except for
their implications for breeding objectives for compo-                                      I =           a; EPDi
nent breeds.
   An earlier review by Dickerson and Willham
(1983) focused on basic knowledge accrued from                    in which H is the breeding objective, the sum of the
research to facilitate “quantitative genetic engineer-            products of the progeny difference ( PD) for each trait
ing” of livestock species. One of their projected future          and its linear economic value (sometimes termed
advances was the clarification of breeding objectives,            economic weight, ai), and I is the optimum index, the
especially in beef cattle and sheep. Our review will              sum of expected progeny differences ( E P D ) for each of
focus on breeding objectives and their utilization,               the same economic traits weighted by the same
which has received renewed attention in the past                  economic values and summed over the same traits.
decade. This focus requires attention to the other                Two problems exist in applying the selection index of
three areas as well, back to the 1940s, as well as                Hazel (1943). First, profit functions often are more
integration into industry programs mutually benefi-               complex than this additive and linear breeding
cial to both breeders and producers.                              objective, and second, complete profit functions often
   The pragmatic question of our review concerns how              include some economic traits for which EPD are not
genetic improvement programs of breeders can syner-               readily available.
gistically affect economic concerns of livestock                     Wilton et al. (1968) and Wilton and Van Vleck
producers.                                                        (1968, 1969) extended this substitution principle to

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                                                       BREEDING FOR PROFIT                                                   2181
non-linear (quadratic) functions (including squares                        predict sire, dam, and progeny genetic differences,
or products). Thus, for a breeding objective of the form                   even for animals without recorded data and for several
                                                                           traits (Schaeffer and Kennedy, 1986; Misztal and
                                                                           Gianola, 1987; Westell and Van Vleck, 1987; Wiggans
                                                                           and Misztal, 1987; Wiggans et al., 1988; Berger et al.,
                                                                           1989; Groeneveld and Kovac, 1990). This group of
                                                                           programs all calculate EPD (sometimes called ETA
                                                                           for estimated transmitting ability) or estimated
the appropriate index is                                                   breeding values ( EBV). We will discuss EPD al-
                                                                           though all principles also apply to EBV, which are
                I =         ai ( p i   +   EPDi)                           twice the corresponding EPD.
                      i                                                       Harris (1964), Sales and Hill (1976a,b), and
       +        Aij ( p i   +   EPDi) ( p j   +    EPDj)                   Foulley and Ollivier (19861, among others, stressed
           'J                                                              the importance of accurate estimates of genetic
                                                                           parameters t o maximize response to index selection.
with Aij being the relative economic value of squared                      Increased accuracy of genetic evaluation procedures is
or product terms. ( p i + PDi) is the mean plus PD for
                                                                           preceded by estimation of variance and covariance
each trait and ( p j + EPDj) is the mean plus EPD for
                                                                           components. Henderson ( 19531 described three
each trait. However, Ronningen ( 197 1) demonstrated
                                                                           methods of variance component estimation that are
that simple substitution did not extend to cubic
                                                                           still in use today. Methodologies using all genetic
functions. Difficulties arise due to the occurrence of
                                                                           relationships and advanced numerical procedures
higher-order moments of the multivariate distribu-
                                                                           have enhanced the accuracy of variance component
tions in the expected covariance between indexes and
objectives.                                                                estimation procedures (Henderson, 1987; Graser et
   Henderson ( 1966) proposed statistical methodology                      al., 1987; Meyer, 1989; Boldman and Van Vleck,
for evaluating dairy sires from performance data                           1991). Estimation of variance and covariance compo-
collected under DHIA programs. Harris ( 196 6 ) devel-                     nents for a wide array of economically important traits
oped formulae for simultaneously evaluating sires,                         is fundamental to the development of genetic improve-
dams, and progeny within each contemporary group                           ment programs and is well reported in the literature
allowing for unequal family sizes, overcoming the                          but will not be further discussed in this paper.
limitation of Osborne's (1957a,b) procedure for poul-                         Modern statistical and computer capabilities allow
try. Later, Henderson (1973) presented a thorough                          simultaneous prediction of EPD for several important
statistical basis for mixed-model equations to simul-                      performance traits involving many flocks or herds over
taneously provide best linear unbiased estimates                           years and generations. These EPD predict differences
(BLUE) of nongenetic fixed effects and best linear                         between animals, but, for practical utility, must be
unbiased predictions (BLUP) of genetic effects. As                         used in conjunction with a testing and selection
computer capabilities increased, procedures were ex-                       scheme that accomplishes improvement (directed
panded to facilitate more accurate predictions for more                    change) and transmits that improvement to the herds
complex models and data sets. Henderson (1976)                             and flocks of commercial producers of livestock
proposed an indirect procedure for generating the                          products in a mutually beneficial manner.
inverse of the numerator relationship matrix, which is                        Efforts to collect and process performance data and
needed to fully use the information from relatives.                        publish results incur expense. In a free enterprise
Quaas (1976) developed a modified algorithm for                            situation, such effort will be undertaken only if there
calculating this inverse.                                                  is an expectation for profit to the breeders or
   Henderson and Quaas (1976) extended BLUP                                organizations that are incurring those costs.
methodology to include simultaneous prediction of
genetic differences for several correlated traits. Hayes
and Hill (1980) described the use of canonical                                                 Testing and Selection
transformations for multivariate genetic data, and
Arnason (1982) described the use of this transforma-                         Progeny tests, especially with large numbers of
tion for developing multiple-trait selection indexes.                     offspring, should be considerably more accurate than
This transformation reduced computing requirements                        performance tests of individual animals. Dickerson
but required some restrictive assumptions about                           and Hazel ( 1944) developed formulae for predicting
correlations. Another procedure for reducing comput-                      the rate of expected response to selection and com-
ing requirements is the reduced animal model ( RAM)                       pared alternative schemes. In addition to selection
of Quaas and Pollak (19801, which evaluates sires,                        accuracy, these formulae indicated that the influence
dams, and progeny deviations as separate model                            of selection intensity and generation interval on the
elements. Several researchers have developed al-                          effectiveness of selection often more than offset the
gorithms for using animal models to simultaneously                        influence of accuracy. Many studies followed that

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2182                                          HARRIS AND NEWMAN

detailed pertinent performance traits for each class of          pedigree sires to the remainder of the breed.
livestock and explored alternative schemes.                      Hagedoorn was primarily concerned with poultry, but
   Rendel and Robertson ( 1950) extended the con-                he advocated the scheme for all classes. The scheme
cepts of Dickerson and Hazel (1944) by separating                involved sire progeny tests and half-sib matings in
genetic improvement into four parts due to selection of          selected sire groups. The deleterious effects of inbreed-
sires to produce sons, dams to produce sons, sires to            ing from half-sib matings made Hagedoorn’s scheme
produce daughters, and dams to produce daughters. Of             impractical but the terminology of “nucleus” survives.
course, matings produce both sons and daughters, but                Analyses of pedigree structure of several breeds of
in some classes of livestock especially dairy and layer          U.S. livestock led Lush (1946) to conclude that there
poultry, only sons of certain matings are kept at birth          is usually a “functional stratification” of pure breeds
to become candidates for selection. Separation of these          into what he termed “breeders’ herds” and “rnul-
four pathways had an impact on numerous studies.                 tipliers’ herds.” The multiplier herds were larger than
Robertson (1957) studied optimum group size for                  breeders’ herds in combined size and provided sires
testing. Smith (1959, 1960) evaluated testing                    into “grade herds” even larger in total size. These
schemes for pigs and other animals. The design of                “grade herds” would be production herds, not necessar-
selection programs for various classes of livestock is           ily purebred, but using purebred sires. Lush ques-
greatly influenced by mating ratios and reproductive             tioned whether much real genetic difference existed
rates for each sex as well as what traits are recorded,          between these strata. He judged that the differences
when traits can be measured, and when selection can              were largely in promotional effort.
occur. Van Vleck (1964) provided a key analysis of                  Robertson and Asker (1951a,b), Robertson (19531,
alternative dairy sire sampling procedures for evaluat-          and Wiener ( 1953 ) noted similar multiplier struc-
ing and selecting sires for AI use. This was followed by         tures in British breeds. Wiener (1953) noted a
Henderson’s ( 1966) procedure for genetic prediction of          “conicoidal” shape to the number of sires registered by
sire breeding values from such d a h . With the use of           a herd graphed in relation to a herds position in the
crossbreeding becoming more common, Smith (19641,                breed structure. The “conicoidal” shape describes
Moav (1966a,b,c), and Moav and Hill (1966) consid-               concave sides. However, the metaphor of a pyramid
ered how evaluation for specialized sire and dam lines           came to be used as an aid in conceptualizing
differed for each and how selection of parental                  expansion of genetic improvements from elite herds or
combinations for use in producing crossbreds should              flocks t o commercial herds or flocks through multipli-
be made. In large animals, selection is usually on               cation. Bichard ( 197 1) used the term “dissemination”
purebred performance even if commercial production               for this expansion. The term “ nucleus” continued to be
is from crossbreds. However, a procedure for testing             used t o describe the apex of the pyramid (James,
both males and females from information recorded on              1977). The literal definition of nucleus would place it
crossbred progeny (reciprocal recurrent selection) was           at the center of the pyramid. Harris et al. (1984)
proposed by Comstock et al. ( 1949) and has been used            conceptualized a six-tier pyramid involving selection,
by some corporate breeders of egg-laying chickens                multiplication, crossing and reproduction, production,
(Hunton, 1990). Other corporations merchandizing                 processing, and consumption. Improvement from
layers have sequentially used individual and sib (both           genetic selection passes not only from the top tier or
purebred) performance tests followed by crossbred                stratum to the reproduction and growth phases of
progeny tests.                                                   production herds or flocks but also influences concerns
   Attention to the design of data collection and                of processing and consumption. How this flow is
selection schemes to optimize accuracy of evaluation,            motivated is the topic of later paragraphs.
intensity of selection, and generation interval to                  Smith ( 1981) reviewed the relation between
improve the rate of genetic improvement can enhance              benefits and costs for testing and selection, noting
the value of statistical predictions. Even then, genetic         diminished returns associated with a linear increase
improvement efforts will likely not be justifiable               of costs in relation to number of animals tested. He
without procedures for expanding and disseminating               noted that reproductive rate sets limits on selection
that improvement into commercial production of                   intensity and thus response. Smith did not directly
livestock for monetary reimbursement.                            address the implication that greater returns through
                                                                 multiplication and dissemination can support greater
                                                                 testing and selection efforts, but such a conclusion is
    Dissemination of Genetic Improvement                         consistent with his developments.
                                                                    Prior t o the 1940s, animal breeding was primarily
   Two metaphors have been used to symbolize the                 purebreeding with occasional crossbreeding to initiate
transition between the system of genetic improvement             development of new purebred populations. Poultry,
(testing and selection) and the production system.               both layers and broilers, were the first livestock to
Hagedoorn ( 193 9 ) proposed a nucleus scheme                    move to crossbreeding. Before this, hybrid corn was a
whereby the nucleus for a breed provided purebred                definite success with improved performance due to

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                                               BREEDING FOR PROFIT                                                    2183
heterosis from crossing highly inbred lines making                producing eggs. Broiler stock evaluation was not
seed corn varieties proprietary products and attracting           influenced as much as layer evaluation by public
corporations t o develop and market inbred-hybrids on             testing, but similar trends for production to be
a large commercial scale. Some companies previously               controlled by larger integrators supplied by large
successful with hybrid corn began to inbreed and                  breeders directed the focus toward economy of produc-
hybridize poultry in the 1940s. Other breeders,                   tion. Some large broiler producers are integrated, from
previously successful with pure strains of various                their own research flocks for genetic selection all the
breeds of chickens, began to cross these strains and              way through hatchery and production facilities to
breed without intentional inbreeding of the strains.              slaughter plants processing packaged brand-name
   To reap the commercial benefits of heterosis, three            products. Such corporations are competitive and
changes occurred in the poultry industry. First, elite            profit-oriented and genetic improvement is directed
breeding flocks expanded to accommodate more                      toward the economics of production. Reduced costs,
strains and breeds. Second, multiplier flocks became              new products, and increased consumption of broiler
allied organizationally t o elite flocks (usually under           meat attest to the efficiency of breeding and produc-
the same ownership) and stocks were expanded                      tion coordinated through highly functional pyramid
considerably to increase the volume available for sale.           structures. Although such levels of integration
This increase in sales supported larger and more                  through corporate ownership do not seem likely in
complete testing programs in elite research flocks.               large animal industries, the progress of the poultry
Third, local hatcheries became franchises of breeding             industries suggests the need for a more economic
corporations with associated supply flocks producing              orientation with organization that is closer to the
the hatching eggs from crossbred matings. If the                  industry structure implied by a pyramid.
crossbreeding system involved three- or four-way                       Dairy breeding activities evolved to an organized
crosses, the mated grandparents to produce crossbred              industry structure that can be symbolized by a
parents could be controlled in corporate-owned facili-            pyramid. But the motivation and vehicle for this
ties so that the crossbred parents supplied to the                structure were quite different from that of poultry.
franchise hatcheries would be proprietary products as             The U.S. dairy industry was the first livestock
well as the crossbred commercial chicks, both for egg             industry to record performance in an objective, quan-
and meat production. For recent reviews of the                    titative, and logical manner through milk recording
development of poultry breeding into multinational                and butterfat testing for management purposes by the
corporate businesses, see Arthur (19861, Hartmann                 Dairy Herd Improvement Associations ( DHIA) , as
(1988), and Hunton (1990).                                        described by Voelker ( 1981). In mid-century, when AI
   Commercial exploitation of heterosis led to the top            became widely practiced, the DHIA data base was
tiers of the conceptual pyramid becoming well-coordi-             available to evaluate the genetic merit of numerous
nated with the systematic flow of genetic improvement             sires being used in many herds (Miller, 1981).
moving one-way down the pyramid, in conjunction                   Statistical complexities motivated theoretical develop-
with production of crossbred parent and commercial                ments for prediction of genetic differences, which were
stock. This was more systematic than the “functional              reviewed earlier. As superior sires were identified and
stratification” noted by Lush (1946) for large animal             produced semen for sale, and as programs for produc-
industries.                                                       ing and testing young sires were implemented, AI
   Competition became intense among corporate poul-               studs became the apex of the pyramid with dissemina-
try breeders, motivating considerable testing and                 tion occurring through the production and merchan-
selection in their respective research flocks to achieve          dizing of large numbers of ampules of frozen semen.
more genetic improvement for their potential cus-                 Expansion occurs through the dilution and division of
tomers than was being made by competitors. To aid                 semen ejaculates rather than through additional
producers, random-sample performance tests were                   generatiods) of reproduction, as in poultry. Another
started by several state organizations in the 1950s               difference relative to poultry is that elite dairy females
and provided comparisons on several traits; see the               ( t o be dams of sons) are not located in a single or a
recent historical review by Hartmann (1985). Start-               few elite herds. They can occur in any performance-
ing in 1963, combined summaries of results published              recorded herd in the system. Thus, for cows, the apex
by the USDA shifted the focus from performance to                 is not defined by the herd reputation but by the
economics by providing an income over feed cost                   genetic evaluation of specific cows. Contract matings
evaluation. In the 1970s entries in tests declined, and           between proven sires and elite cows produce young
this loss of entry fees led to the demise of several tests        male candidates for testing to replace the proven sires
and the combined summary ceased to be published                   in studs. Modern animal model genetic evaluation
after 1978. Changes in the layer poultry industry to              procedures make the identification of elite cows
large, profit-oriented, integrated corporations changed           accurate and feasible. Embryo transfer has been used
the focus to economic objectives with breeding stock              in recent years as a tool t o increase dissemination of
sales and purchases oriented to the economics of                  the genetic superiority from elite cows. The procedures

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2184                                           HARRIS AND NEWMAN

for producing, freezing, and distributing semen dictate           closed and no genetic flow occurs up the pyramid
that proven and young candidate sires be restricted t o           because of disease risks. Many swine breeding organi-
a few locations. A pyramid-shaped industry structure              zations function similarly. Some disease problems
based on proven genetic merit of individual animals               have occurred in open nucleus schemes of sheep in
reproducing through AI provides an indication of                  Australia (Ponzoni, 1993, personal communication).
possibilities for other large animal classes.                        In their perceptive book on the development and
   Van Vleck (1977, 1988) reviewed the evidence for               implementation of animal breeding theory, published
genetic progress in U S . dairy cattle. Analyses indi-            midway through the 50-yr period covered by this
cated that progress had been considerable but much                review, Lerner and Donald ( 196 6 ) were favorably
less than theoretically possible. Much of the progress            impressed with the development of large-scale breed-
was from progeny testing and selection of AI sires.               ing operations in the poultry industries and with the
Cow evaluation is expected to become more effective               improvements through AI on selection and use of
with application of BLUP procedures (Henderson,                   dairy sires. On the other hand, these authors were
1973, 19761, especially for animal model procedures.              concerned that purebred breeders of swine, sheep, and
   Hinks (1978) investigated the potential for breed-             beef cattle, and their breed societies, were unreceptive
ing schemes in dairy cattle with centralization of                to the science of genetics. To quote those authors,
intensive testing and selection as an alternative to the
large-scale testing and selection through AI. Nicholas                Their associations have a history of resistance to
and Smith (1983) extended this work to include the                    scientific advances dating from their establish-
use of multiple ovulation and embryo transfer for                     ment.. . . No other behavior should be expected.
enhanced reproduction from desirable genotypes.                       Members of breed associations are individualists,
These studies demonstrated potential for such ap-                     combining together for mutual advantage and
proaches t o exceed improvement already realized for                  working collectively only for bare necessities. . . .
simpler approaches.                                                   They are responsive to economic pressures but not
   Quantitative consideration of the dissemination of                 to advice or moralizing.
genetic improvement from elite or nucleus herds or
flocks was clarified through the paper of Bichard                 There has been a demise of breed societies in some
( 197 1). His concern was for a one-way flow through              countries since then.
herds from elite to multiplier to producer, possibly in              Lerner and Donald did not fully anticipate the
conjunction with crossbreeding. Parker ( 1970)                    growth in statistical procedures and the potential
described the organization of Romney breeders in New              these would have for synthesizing information from
Zealand around development groups with a central                  numerous small breeding enterprises. The publication
flock containing highest-producing ewes from                      of their book coincided with early steps in the
producers’ flocks and providing rams back to members
                                                                  evolution of statistical prediction and widespread
of the group. Daughter flocks, organized around the
                                                                  availability of computing equipment. Henderson’s
central flock, disseminate and produce rams for
                                                                  (1976) procedure for developing the inverse of the
producer use. Numerous other group schemes have
                                                                  numerator relationship matrix increased the value of
developed in New Zealand and Australia for several
                                                                  pedigree data recorded by breed societies. In the
breeds o r groups of breeders within a breed. Jackson
                                                                  United States, societies of beef and swine breeds now
and Turner (1972) expanded the theory for such
                                                                  provide data processing services to their members to
schemes, followed by James ( 1977 ), who considered
open nucleus breeding systems in which not only was               facilitate more effective use of both performance and
there flow down the pyramid through the distribution              pedigree records.
of sires, but superior performing dams could move up                 Because of limits to multiplication and dissemina-
the pyramid to the nucleus. For discussion of tradi-              tion when reproductive rates are low, progressive
tional stud breeding in Australia in relation to the              corporate involvement with livestock classes with low
development of group breeding schemes and their                   reproductive rates has been largely limited t o mer-
implementation, see Peart ( 197 6 1.                              chandizing of semen. For effective dissemination to
   Industry structures for poultry predominantly in-              occur, the genetic changes at the apex of the pyramid
volve the production of the crossbred production                  have to be identified to be in directions to reap
animals and usually crossbred parents. On the other               economic rewards further down the pyramid, and a
hand, dairy production and Australian and New                     portion of these rewards should flow up the pyramid to
Zealand wool-sheep production still predominately                 reward and stimulate the developers. Two phrases to
involve purebred production animals. The metaphor of              describe this process are payment-for-value and value-
the pyramid is versatile enough to aid conceptualiza-             based marketing. With this two-way influence, the
tion of the necessary organization of poultry, dairy,             breeding and production segments of the industry will
and sheep.                                                        be synergistic in their advances. However, for this to
   When nucleus flocks in poultry take extraordinary              fully occur, precise identification of value in monetary
measures to eliminate pathogens, the pyramid is                   terms is necessary.

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                                              BREEDING FOR PROFIT                                                   2185
         Economic Breeding Objectives                            Barlow, 1987; Groen, 1989a,b; McClintock and Nicho-
                                                                 las, 1991). Willham (19791, in reviewing U.S. beef
   Before the foundation papers of the 1940s, breeding           sire evaluation programs, stated that
objectives for all livestock classes were predominantly
visual. The objective was toward an “ideal type” for                 these programs place the responsibility of defining
the breed. The expectation was that “form determines                 direction on the many breeders of the particular
function,” with function meaning performance. Capa-                  breed in question. This should be their decision;
bilities for genetic prediction have now encouraged                  however efforts must be made to make available to
recording of some performance traits in most classes.                them the basic facts on which reasonable direction
Most breeding industries have evolved from objectives                decisions can be made.
of appearance to objectives involving performance, but
these objectives are often not of a precise economic             Willham recognized that breeders should decide their
form. Thus the evolution seems t o be incomplete.                own direction and, thereby, commit to it. It is noted
Certainly, traits in most performance recording                  that, except for efforts of corporate geneticists, it is
schemes are related t o the economics of production in           rare for breeders of any class of livestock to define
some way. However, combining genetic predictions,                breeding objectives in mathematical and economic
such as EPD, into a mathematical function to serve as            terms. Better leadership from professional scientists,
a criterion of selection is not often achieved, even             but allowing breeders and their breeding stock cus-
though Hazel ( 1943) specified the fundamental prin-             tomers to have final choice of objectives, is occurring
ciples 50 yr ago.                                                in some cases (e.g., Fenwick et al., 1991).
   Ponzoni ( 1982) proposed integrating several                     U.S. swine breed associations, through STAGES
aspects of selection through five stages, whereas                (Swine Testing and Genetic Evaluation System)
Harris et al. (19841, incorporating the potential of             (Stewart et al., 1991), offer alternative breeding
crossbreeding systems, listed the following nine steps           objectives related to potential use of each breed in
for systematically designing a breeding program:                 parentage of commercial breeding stock to direct
                                                                 construction of alternative indexes.
1.   Describe the production system(s),                             Disturbed by the vagaries of production economics,
2.   Formulate the objective of the system,
                                                                 many scientists have desired biological objectives free
3.   Choose breeding system and breeds,
                                                                 from these difficulties. Attempting to define biological
4.   Estimate selection parameters and economic
                                                                 indexes for swine, Fowler et al. (1976) proposed lean
                                                                 tissue growth rate (LTGR) and lean tissue feed
5.   Design animal evaluation system,
                                                                 conversion ( LTFC). The former is the ratio of lean
6.   Develop selection criteria,
                                                                 tissue growth relative to the time during which the
7.   Design matings for selected animals,
                                                                 growth occurred. The latter is the ratio of feed
8.   Design system for expansion, and
                                                                 consumed to lean tissue growth. Lean tissue growth
9.   Compare alternative combined programs.
                                                                 involves both total tissue growth and tissue composi-
   Both papers emphasize the importance of definition            tion of that growth. Although these two biological
of breeding objectives and developing selection criteria         functions describe fundamental aspects of biological
based on them. Wilton ( 1982) pointed out that the               efficiency, they do not readily combine into one index
substitution principle for index construction may be             to provide a selection criterion. The three component
used even when unequal amounts of information go                 traits, lean tissue growth, feed consumed, and time to
into the calculation of the EPD, and substitution can            slaughter, provide three fundamental elements of a
be done for either linear or quadratic objectives. This          profit function if it is assumed that costs are for feed,
suggests an amalgamation of the selection index                  labor, and facilities, only lean tissue has value, labor
approach of combining traits and economic weights as             and facility costs are a function of time, and reproduc-
in Hazel (1943), and the genetic prediction approach,            tion and lactation costs are ignored. Simm et al.
which combines information from relatives for each               (1987a) concluded that these biological indexes im-
trait (Henderson, 1973, 1976). Because of the com-               plied economic weightings that are not necessarily
mon origin of these two statistical approaches, it               correct. Ponzoni and Davies (1989) concluded that
makes sense to integrate them into a procedure with              conventional indexes have advantages over biological
the strengths of both.                                           indexes because they enable monitoring of changes in
   In addition to Ponzoni (1982) and Harris et al.               components and updating of objectives. Thus, it seems
(19841, numerous others have stressed a formal                   that biological objectives, without economic values, are
definition of the breeding objective as a necessary              not complete descriptions of pertinent objectives of the
foundation for designing genetic evaluation proce-               producer.
dures, selection practices, and integrated animal                   The fundamental necessity for an economic perspec-
breeding programs (Harris, 1970; Dickerson, 1970,                tive and payment-for-value was noted by Lerner and
1982; Danell, 1980; Carter, 1982; James, 1982;                   Donald (19661:

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2186                                          HARRIS AND NEWMAN

  Unless there is a change for the better in the                 increase payments. Genetic evaluation across herds or
  genetic and economic merit of each breed, it is                flocks for several performance traits has taken the
  difficult to see how any outlays on breeding for               industries toward such an arrangement. The remain-
  improvement can bring returns to the ultimate                  ing task is to combine these EPD into a single-valued
  financial source. Constructive breeding therefore              measure of an animal’s worth to the customer’s profit
  must have positive aims, anticipate the future                 objective.
  correctly, and temper the rigours of genetic theory
  with a proper regard for costs and returns.                    Economic Values and Profit Equations

Motivation for Genetic Improvement                                  The basic economic values involved in the develop-
                                                                 ment of profit equations for any class of livestock, at
   Seedstock producers are in business primarily to              the minimum, include 1 ) cost of feed per unit of feed
make a profit, as are their breeding stock customers,            weight, 2 ) cost of labor and facilities per unit of time
who produce food (and fiber) products. Producer’s                (may differ for different stages of the life cycle), 3 )
profits are influenced by consumers’ demand for their            value per unit weight for product(s), and 4 ) cost of
products.                                                        initial animals (breeding stock, young animals, etc.).
   Purchase of breeding stock involves a cost but can            Costs of feed may reflect differences in cost related to
provide a positive influence on the functioning of the           nutritive content. Value of product may reflect quality,
system by reducing other expenses or increasing                  such as body composition as a function of some
income from output, or both. The producer will be                measure of fatness.
motivated to pay more for breeding stock if given                   Hazel (1943), defining an economic value, ai,
assurance that profit will increase as a consequence of          stated that “the relative economic value depends upon
these increased costs. Products sold to earn income for          the amount by which profit may be expected t o
a breeder are primarily breeding stock (or alterna-              increase for each unit of improvement in that trait.”
tively semen). Efforts to improve the value of this              The ai may be obtained as the partial derivatives of a
product (and thus the income earned) are likely t o              more complex profit equation with respect to each
add expenses due to the extra labor of recording data,           trait in the objective. The derivatives are evaluated a t
registration and computer charges, marketing of                  the mean value of all other traits. Kendall and Stuart
intact animals for slaughter, and so on. The breeder             ( 1963) presented the formula for a Taylor’s expansion
will be motivated if given assurance that greater                for an arbitrary complex function and Harris ( 1970)
income will adequately cover these increased ex-                 suggested taking first-order terms as a linear approxi-
penses.                                                          mation. Later, Melton et al. (1979) and Ladd and
   In recent years, there has been considerable en-              Melton (1979) expanded the theoretical basis for a
couragement in both the scientific literature and the            trait’s economic value as used in selection index.
livestock press for value-based marketing of meat                Alternatively, Pasternak and Weller ( 1993) developed
animals. This means selling market animals on a                  an interactive computer procedure to calculate linear
carcass-basis with more accurate measurement and                 weights for predicted changes when profit functions
reimbursement for quality, primarily freedom from                are nonlinear. For quadratic approximations, second
extra muscular fatness. Such a marketing arrange-                partial derivatives are necessary, as they are coeffi-
ment better motivates livestock producers to provide             cients of the quadratic terms as used by Akbar et al.
improved (less f a t ) carcasses for sale to processors.         (1989b) and Bandy et al. (1991). When g(x1, x2,. . . ,
This approach seems equally pertinent for the inter-             Xk), have means, pi, and finite variances, and the
face between breeders and producers. Breeders would              function g is differentiable at xi = pi for all i, a Taylor’s
be better motivated to develop breeding stock that               expansion of g is
improves the performance of the customers’ production
systems if income received from breeding stock sales
were in proportion to the expected added profitability
for the customer.
   The principle of value-based marketing of breeding
stock may seem obvious, but breeding stock have
historically been merchandized based on characteris-
tics and information trivially related to the expected                  ag
                                                                  where - indicates the first partial derivative of g
contribution of the breeding stock to profitability of                      au;_
the customer’s production system. More progressive                with respect to xi evaluated at xi = pi for all values of i
breeding industries resulted in poultry as marketing
                                                                  and ___ indicates the second partial derivative of g,
of breeding stock became oriented to economic con-                      adpj
cerns. Breeders have to accept responsibility for                 first with respect to xi, then with respect to xj,
developing information their customers need to assess             evaluated at xi = pi for all i, Axi is xi - pi, and 0 (Ax)
the added value of improved breeding stock and                    indicates that the remaining terms are of the third

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                                              BREEDING FOR PROFIT                                                  2187
order o r higher. This second partial derivative also has        to give lower costs of producing progeny for the growth
to be evaluated at the point of the mean of all traits.          phase of the production system. Of course, after the
Means may differ from herd to herd and are expected              longevity trait is expressed by death or failure to
to change over time.                                             rebreed, reproduce, or lactate, it is too late to make
   Profit equations describing the breeding objective            any direct selection decisions for that animal. Ancestor
often include economic traits that are not routinely             information is potentially available for descendants,
recorded. Genetic evaluation of performance has                  but longevity data are subject to many management
largely focused on weights at specified ages and,                decisions, many of which are influenced by other
maybe, some measure of female reproduction. These                performance traits.
traits are relatively easy and inexpensive to measure.              The period between weaning of offspring and
Too often genetic evaluation has focused only on                 parturition represents a major cost of the breeding
output traits and has neglected costs of inputs. For             herd that may be reduced through parent stock
example, weight is the output of the growth process,             genetically able to rebreed sooner. Thus, rebreeding
number born is the output of the reproduction process,           interval as well as age at first breeding are potential
and number and weight weaned describe the outputs                economic traits. However, expression of these traits is
of the lactation process.                                        subject to management decisions to such a large
   There are many cost-incurring inputs into livestock           extent that they are seldom used as performance
production systems that may be costly to measure.                traits in genetic evaluation programs.
Feed, whether prepared feed or range forage, is the                 Some U.S. corporate breeders have undoubtedly
major cost of production for all classes of livestock.           used unpublished indexes. Only one series of indexes,
Any realistic attempt to develop a profit equation as a          and the sets of economic values forming the basis for
breeding objective must include feed consumption,                them, have been presented in the scientific literature.
even though it is dificult to measure. Feed may not              A series of four sets of economic values and the
directly be in the index, because it is usually only             resulting indexes for Kimber Poultry Farms are
recorded individually for experimental purposes or on            presented in Kashyap et al. ( 198 1) and Bennett et al.
a pen-basis in bull, ram, or boar test stations. In those        (1981). These indexes included 16 traits. Based on a
                                                                 reanalysis of the Kimber data, fully published by
cases, indirect prediction of the costs is necessary.
                                                                 Emsley et al. ( 19771, Emsley and Dickerson ( 1974)
   Indirectly through the process of developing selec-
                                                                 had earlier compared alternative indexes with up to
tion indexes as prescribed by Hazel ( 1943), numerous
                                                                 12 traits. All these sets of economic weights and the
sets of economic weights were developed in earlier
                                                                 resulting indexes presume a linear and additive
literature, although we mention only a few. Suther-
                                                                 aggregate genotype as specified by Hazel (1943). The
land (1958) calculated indexes for selecting swine, in
                                                                 basis for the economic values used in these studies or
addition to Hazel (1943) and one other. For sheep,
                                                                 the changes in them are not fully explained but are
selection indexes for economic breeding objectives               seemingly due to both shifts and reanalysis of the
were developed by Hazel and Terrill (1946) and                   economics of production and marketing over the
Givens et al. (19601, among eight others. Following              several years the indexes were used. Feed consump-
two earlier indexes, Swiger et al. (1965) and Dicker-            tion was not one of the traits used, but cost of feed
son et al. (1974) developed indexes for selection of             seems to have been considered in the relative eco-
beef cattle, and Soller et al. (1966) developed an               nomic values for the production traits. Nicoll et al.
index for dairy cattle following five earlier ones.              (1979, 1990) and Nicoll and Johnson (1986) indi-
Indexes for poultry selection have been developed by             cated that progressive use of breeding objectives and
Panse (19461, followed by 11 more, and recently by               selection indexes has occurred in the state-owned
Akbar et al. (1986a). Nagai et al. (1955) and Eisen              Landcorp Farming organization in New Zealand.
(1992) produced indexes for mice. Probably few of                   During the late 1960s, new attention was given to
these indexes were ever used in breeding industries.             defining breeding objectives. In an important study,
   In many of these developments, the attempt was to             Moav and Moav (1966) considered the quantitative
provide relative economic values only for those traits           definition of objectives for broiler breeders. Dickerson
for which there were data available to estimate the              (1970) and Harris (1970) reviewed the principles of
parameters needed (e.g., heritabilities and genetic              merging biological and economic aspects of livestock
and phenotypic correlations). This was inadequate                production into bioeconomic objectives. These three
because pertinent traits, including feed consumption,            works shifted attention to nonlinear and nonadditive
reproduction, and longevity, were often neglected.               interrelationships between objectives and component
Longevity of life or longevity of efficient reproduction         traits. Nonlinearity allowed a more complete economic
and lactation is of strong economic importance in most           description but led to questions of whether the indexes
livestock production systems. If the costs of producing          should be linear and additive.
ready-to-breed young animals exceeds the salvage                    Further discussion of principles has followed among
value of a culled (for age, poor reproduction, or poor           the livestock geneticists, for example see Gjedrem
lactation) breeding adult, costs of producing the                ( 1972 1, McClintock and Cunningham ( 1974), Dicker-
breeding animals may be prorated over more parities              son (1976, 19821, Brascamp (1978), Miller and

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2188                                          HARRIS AND NEWMAN

Pearson (19791, Dane11 (19801, Thompson (19801,                     This prompts the question of what to do about
Hill (1981a,b), Pearson and Miller (19811, Carter                unrecorded traits of economic importance. Without
(1982), Pearson (1982), Wilton (1982), Harris et al.             EPD, there cannot be substitution for the PD in the
(19841, Roux and Scholtz (19841, Groen (1989a,b),                breeding objective function. Whenever feasible, ex-
Bright (1991), and h e r and Fox (1992). Especially              panding the performance recording scheme to include
active in recent years in elucidating and applying               all economically important traits is ideal. An alterna-
breeding objectives have been the livestock geneticists          tive is to include another trait ( o r set of traits) that
of New Zealand and Australia, including Clarke and               provides a reliable indicator of the unobserved eco-
Rae (1977), Nicoll et al. !1979), Ponzoni (1979, 1982,           nomic trait. A reliable indicator has a high genetic
1985, 1986, 1988a,b), Morris (1980, 19811, Ponzoni               correlation with the economic trait and has sufficient
and Walkley (19811, James (1982, 19871, Goddard                  variability to be indirectly selected. A reliable indica-
(19831, Nicoll and Johnson (19861, Barlow (1987,                 tor is also relatively easy to measure, heritable, and
1989), McArthur (19871, Upton et al. (19881, John-               measured early in life. An economic trait, such as feed
son et al. (19891, Ponzoni and Newman (19891,                    consumption, can perhaps be predicted either pheno-
Barwick and Hammond (19901, Brash et al. (19901,                 typically or genetically from the observed traits of
McArthur and del Bosque Gonzalez (19901, Ponzoni                 weight, growth rate, milk production, and so forth.
and Gifford (19901, Fenwick et al. (19911, and                   With equal amounts of information, it is a straight-
Newman et al. (1992). McClintock and Cunningham                  forward application of Hazel’s ( 1943) procedure to
(1974) pointed out that when some traits are                     include in the index a predictor for an unobserved
expressed later in life than others, economic discount-          economic trait because of the genetic and phenotypic
ing of weights becomes necessary.                                correlations between the economic trait and the
   Goddard (1983) concluded that, in many situa-                 observed indicator traits. With unequal information,
tions, a linear approximation is adequate and achieves           the task is somewhat more difficult. This indirect
at least as much change in population means as any               prediction approach has been used for the economic
other function. The operational difficulty is that for           trait of feed consumption by Stewart et al. (1990),
linear approximations (Harris, 19701, economic                   Ponzoni and Newman (19891, and Newman et al.
weights are the first partial derivatives of a more              (1992). For clarification in further discussion, we will
complex function relative to each trait evaluated at the         refer to direct EPD and indirect EPD for observed
population means of all other traits. Goddard recog-             performance traits and other economic traits, respec-
nized the difficulties in linear indexes due to changing         tively. The accuracy of indirect EPD depends on the
means for traits with intermediate optimums, which               magnitude of the genetic correlations with observed
had prompted Kempthorne and Nordskog (1959) to                   traits on those individuals. The choice between the
propose restricted indexes that avoid change in some             need t o directly record feed consumption and the
                                                                 ability to indirectly predict it has been studied by
trait or function of traits. Stewart et al. (1990)
                                                                 Arboleda et al. (1976a,b), Wing and Nordskog
decided not to use the linear approximation approach
                                                                 (1982a,b), Wing et al. (19831, and Katle (1992) for
for the STAGES program because genetic differences
                                                                 egg-production poultry and needs t o be further inves-
between herds would lead to several differing sets of ai
                                                                 tigated for other classes.
values for relative economic weights for several herds
                                                                    When substitution indexes involve unequal
and these weights should be changed as the genetic
                                                                 amounts of information in the EPD, indirect EPD are
mean of each herd changes. If linear approximations
                                                                 needed for the unobserved but economically important
of complex functions are accurate in the short term,             traits. This is a feasible extension of the work of
then one complex function can also approximate                   Henderson and Quaas (1976) if all the appropriate
several linear functions for differing sets of sub-              variances and covariances are known. To reduce
population means. The appropriate nonlinear function             calculations, Stewart et al. (1990) determined in-
allows the use of a single objective function and a              direct EPD for feed while retransforming the EPD for
single index function of EPD for a whole breed with              transformed traits relating t o growth rate and fatness.
numerous herds participating, but this requires a                This is the eigenvector canonical transformation
common objective.                                                proposed by Hayes and Hill (1980) and Arnason
   Ponzoni (1982) and Harris et al. (1984) emphasize             (1982). Other transformations for achieving inde-
that the breeding objective function should be devel-            pendence among traits have been reviewed by Jensen
oped initially focusing on what traits are economically          and Mao (1988) and Lin and Smith (1990). Both
important and how they contribute to the economics of            selection index (Hazel, 1943) and BLUP (Henderson,
production. This should be done whether or not those             1973, 1976) methodologies should take into account
traits can readily be components of a testing, evalua-           genetic and phenotypic covariances between traits.
tion, and selection scheme. In other words, the set of           Substitution indexes could be developed from univari-
economic traits is not necessarily the same (and                 ate BLUP predictors, but there would be some loss of
usually is not the same) set of traits that are recorded         accuracy and indirect EPD would not be feasible.
in a computerized genetic evaluation scheme.                     Schneeberger et al. (1992) presented formulae for

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                                               BREEDING FOR PROFIT                                                    2189
predicting economic traits from performance traits in             Alternative Forms of Breeding Objectives
the form of genetic multiple regression equations with
direct EPD substituted for PD genetic values of                      Hazel’s ( 1943) definition of aggregate genotype
performance traits. The results would include what we             oriented the objective toward improving profit, and
have termed indirect EPD. With their equations, the               most developments have been in that direction.
calculations could be done later and separate from the            Dickerson (1970, 1976, 19821, Harris (19701, and
direct EPD calculations.                                          James (1982) suggested that ratios of expenses and
                                                                  outputs might sometimes be more appropriate as
Restricted and Desired Gains Indexes                              objective functions. However, profit functions have
                                                                  remained attractive because their simpler form more
   Brief mention of constraints on optimization of the            readily leads to use of the substitution principle.
selection index procedure is warranted. Kempthorne                Brascamp et a1 (1985) and Smith et al. (1986)
and Nordskog ( 1959 ) were concerned about the                    showed that the consequences of profit functions or
inadequacy of linear aggregate genotype functions                 economic ratios were much the same for objectives
when there is a nonlinear relationship between a trait            pertinent to meat animals with some simple restric-
and net value, such as egg weight in chickens. This is            tions on the development of profit functions. Ponzoni
a curvilinear relationship with an intermediate opti-             (1988b) reached a similar conclusion for sheep. Amer
mum for the population mean. The relative economic                and Fox (1992) had an alternative viewpoint as they
weight could be positive, zero, or negative for hfferent
                                                                  presented a “neoclassical” model based on theory of
populations and for different points in time. With
                                                                  the competitive firm.
strong negative associations with other economically
important traits, the economic weight would likely                   Dairy geneticists have been particularly interested
oscillate from zero to positive and back to zero as the           in ratios as objective functions. Most current programs
population changed from the optimum and back. A                   focus on repeated records for single lactations.
positive weight results from the need for selection               Researchers, recognizing the economic importance of
pressure to correct the inadequacy of the index giving            longevity (length of productive life), noted that profit
no selection pressure to the trait based on an                    on a lifetime basis is not greatly related to longevity if
erroneous economic weight of zero for egg weight. The             the profit per lactation is small. Because a constraint
solution recommended by Kempthorne and Nordskog                   in most dairy production facilities is on the number of
(1959) was to impose a Lagrangian multiplier to                   cows in production a t one time, Pearson and Miller
restrict population change t o zero. More complex                 ( 198 1 and Pearson ( 1982 ) have proposed that
restrictions have been proposed (Tallis, 1962; Har-               lifetime net income per year reflect longevity, by
ville, 1975; Brascamp, 1978). A comment from Mal-                 making it the denominator of the ratio; others have
lard ( 1972) is translated as “the restricted selection           preferred the ratio of income t o costs, which may be
index procedure is a dangerous and arbitrary tool you             considered an economic efficiency ratio. Dickerson
can only utilize when there are strong reasons to be              (1970, 1982) and Newman et al. (1985) preferred the
doubtful about economic weights.’’ Many have consid-              ratio of costs per unit product. Meat animal geneticists
ered a rigid restriction too extreme when economic                have not addressed the importance of productive life to
concerns include curvilinearity.                                  the degree t o which dairy geneticists have. When
   Most index developers have also evaluated                      these others do, some of the same concerns may
predicted changes in component traits and examined                appear.
them for reasonable responses. After Henderson’s                     A major dilemma of defining breeding objectives is
( 1963) substitution index facilitated the application of         that sometimes there are compelling logical reasons
economic weights last rather than first, Pesek and                for expressing breeding objectives as a ratio or some
Baker (1969) suggested a desired gains approach                   other nonlinear function. However, optimization of
whereby the desired gains values were chosen by the               selection indexes seems only to be exact for linear and,
breeder as a first step to obtaining index coefficients.          sometimes, quadratic objective functions.
The authors cite the advantage of not needing
                                                                     Some profit functions for meat animals involve
economic values. Many do not agree this is an
                                                                  cubic terms (e.g., a product of number of progeny,
advantage. Some argue strongly that restricted or
desired gains approaches will likely compromise the               weight, and value as a function of leanness) to
economic effectiveness of the index approach (e.g.,               determine income for a parent animal. An economic
Gibson and Kennedy, 1990) with high risk of reducing              trait, such as days to market, involves the reciprocal of
progress below maximum. Others (e.g., Carrick and                 a performance trait, such as rate of gain. How should
Ponzoni, 1991) believe that such apprb-ches may be                such functions be handled? Three alternatives are 1)
the best alternative when economic values are difficult           develop a linear approximation to the more complex
to specify or are in risk of being erroneous, disease             function and use the substitution index for that
resistance being one trait of concern. Piper and Barger           approximation; 2 ) develop a quadratic approximation
( 1988) reached a similar conclusion. Reliable eco-               for the more complex function and use the appropriate
nomic-based objective functions, likely nonlinear, are            substitution index; and 3 ) use a direct substitution
ideal, but they are not always attainable.                        approach by replacing PD with EPD in the more

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2190                                          HARRIS AND NEWMAN

complex function. The last approach is also an                   stricted indexes. Despite the nonlinearity, EPD and
approximation due to neglecting higher-order distribu-           means are directly substituted in this function.
tional parameters. Gianola and Fernando ( 1986)                  Economic traits and performance traits are the same
point out that, following Cochran’s (1951) conditional           except for the possible lack of observations on feed
expectation argument, substitution in a quadratic                consumption residual.
objective function ignores terms involving prediction               For broiler chickens, Akbar et al. (1986b) devel-
error variances and covariances that vary when there             oped a complex income over feed cost function for
is differing amounts of information; but these values            production of three-way-cross broilers relative to a
are often not calculated in practice. Gianola and                single grandparent female. This function is basically a
Fernando (1986) advocated the potential of Bayesian              linear function of several higher-order products of
approaches for overcoming difficulties of nonlinearity           terms (cubic and higher). Thus, linear and quadratic
in objective functions. However, this theoretical ap-            approximations were developed to facilitate use of
proach has yet to achieve practical application.                 EPD substitutions. Feed consumption is included for
Ponzoni and Newman (1989) and Newman et al.                      broilers and might be recorded as a performance trait
(1992), for beef cattle, preferred the linear approxi-           but likely would be predicted as an indirect EPD with
mation approach, in spite of a possible increase in              high correlations to weight ( a t a fured age) and
accuracy from a quadratic approximation. Akbar et al.            composition of gain. The limitations are that no
(198613) developed a quadratic approximation to a                measure of fatness and no measure of parent and
more complex profit equation for broilers. Stewart et            grandparent feed costs are included. Economic weights
al. (1990), for swine, used the third approach, but the          differ among the three strains going into the three-
departures from a quadratic function seemed minor.               way cross, with most emphasis on female reproduction
   To summarize this section, the efforts of both                traits in the maternal strains relative t o none in the
breeders and producers are directed by their profit              paternal strain.
motives. The breeders should query the economic                     Swine. Stewart et al. (1990) developed a profit
concerns of their producer-customers to arrive at a set          function for swine considering the expenses and
of economic traits and a breeding objective function. In         income for a single breeding female and her total life-
response, genetic evaluation must expand to include              time progeny. Routine performance data for number of
indirect EPD for economic traits not included in the             matings, failed matings and conceptions, time to
set of performance traits. From these, a selection               successful rebreeding, and so on, were not included.
index to guide breeders’ selections should be devel-             The objective only describes the economics of the
oped. Objectives and index functions might differ                interval between mating and weaning for a single
between sets of customers of different breeders, but             parity. Economic and performance traits for two
each breeder should have only one function t o direct            portions of the life cycle, those involved in sow-herd
change in his or her herd or flock.                              reproduction and lactation and those involved in
                                                                 postweaning growth, are considered separately be-
Example Objectives
                                                                 cause sire and dam breeds influence them differently.
   The mathematical form, development, and traits                   The postweaning function (PWI) represents a
involved in breeding objective functions published               single growing animal from weaning at 6.8 kg to
since 1980 vary considerably. None is perfect; all have          marketing at 105 kg. The sow-herd function
been developed with some omissions, usually for                  represents the period from conception to weaning for
practical expediency, due to lack of parameter esti-             one sow but incorporates the PWI of each weaned
mates or exclusion from current data recording                   animal in the litter. Alternative indexes are developed
systems. Poultry objectives tend to be more inclusive            for different objectives pertaining to a breed’s use in
and complex. Comparison between classes of livestock             commercial crosses. The terminal sire index ( T S I ) is
suggest future enhancements in some classes.                     simply a numerical coding of the postweaning function
   Poultry. Fairfull et al. (1991) presented an income           (PWI) to deviate from a mean of 100. An indirect
over feed cost function for layer chickens with seven            EPD is used for feed per kilogram of gain, which is
traits. This function is decidedly nonlinear and has             predicted from the genetic variances and covariances
curvilinear relationships between egg value and                  with backfat and days to 105 kg. Because number
weight, between egg value and Haugh units ( a                    weaned is multiplied by the other traits, the sow-herd
measure of albumen quality), and between probability             subobjective is close to being a quadratic function. The
of breakage and specific gravity ( a measure of shell            departure from the quadratic form comes from the
thickness). Feed expenses are predicted from body                nature of days to weaning as a ratio fimction of
weight, egg weight, and egg number, but the function             number weaned and 21-d litter weight. Because this
allows for residuals of the predictions if feed consump-         was approximately a quadratic function, it seemed
tion is observed. This function incorporates an inter-           expedient to still use the substitution principle.
mediate optimum for egg weight, which motivated                  However, a crossbred mean needs to be added to each
Kempthorne and Nordskog (1959) to develop re-                    EPD prior to substitution. With such a substitution,

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                                               BREEDING FOR PROFIT                                                   2191
the sow-herd subobjective with coding to a mean of                Numerous genetic correlations, heritabilities, and
100 gives a Maternal Line Index (MLI). A general                  phenotypic correlations need to be accurately esti-
purpose index ( G P I ) is obtained as an average of MLI          mated to predict the necessary indirect EPD for the
and TSI, which is appropriate for breeds used in                  economic traits from observations on the performance
rotational crossbreeding systems. These alternative               traits. The proposed evaluation system allows con-
indexes are practical implementations of Moav’s                   siderable flexibility for recording or not recording
(1966a,b,c) concept of specialized sire and dam lines.            individual performance traits. Of course, the more
   Sheep. The breeding objective developed by Ponzoni             traits that are recorded for candidates and relatives,
(1986) is designed for the Australian wool industry. It           the greater the accuracy will be.
is a linear approximation for a 1,000-ewe flock profit                ar
                                                                     D i y Cattle. Breeding objectives for dairy animals
function. The objective function can be used for                  are of special interest because longevity is sometimes
substitution of within-flock EBV coming from a quite              incorporated into the economic concerns. Effort has
flexible data recording program in association with               also gone into including feed costs, though they are
wool testing (Brien and Kent, 1992). Economic traits              not yet incorporated into indexes published for dairy
for feed intake are indirectly predicted from geneti-             sires and cows. Balaine et al. (1981) presented a
cally correlated traits. Full pedigree records are often          lifetime phenotypic profit function including 12 traits.
not available in Australian sheep breeding operations             Several of the terms involve the product of number of
and across-flock evaluations are not attempted, al-               lactations in the productive life multiplied by the
though some sire referencing schemes are in place.                average value for a lactation. Thus, this equation is
WOOLPLAN, the Australian performance recording                    quadratic and substitution of EPD can be directly
service for the Merino and allied breeds (Ponzoni,                applied. Several traits, including number of lactations,
19871, uses a simplified version of Ponzoni’s (1986)              herd life, number of mastitis treatments, and number
objective.                                                        of breeding services have not been included in past
   Simm and Dingwall (1989) developed indexes for                 data recording services but may be in the future.
meat-type sheep. Simm et al. (1987b) developed                    Noting that feed energy costs differ for fat and protein
indexes for lean meat production in New Zealand                   components of milk, Allaire and Thraen (1985)
sheep. LAMBPLAN is another Australian evaluation                  developed a linear function for output adjusted for
program (Banks, 1990) designed for breeds used as                 feed cost including prediction of energy costs as a
terminal sires for lamb production. Their breeding                hnction of fat and protein yield. This function is for
objective for lean growth is 3.3.weight ( k g ) - 10.0-fat        just one lactation. Allaire and Gibson (1992) recently
depth ( m m ) with a high growth option for selection on          developed a linear breeding objective to improve an
weight alone and a high lean option with selection                economic efficiency ratio. A difficulty is that longevity
against fatness. This form of presentation facilitates            in a dairy herd is likely to be related to level of
use with EPD. The basis for this weighted function is             performance (Allaire and Cunningham, 1980). Allaire
not presented in available publications but is a desired          and Gibson (1992) offer an approach to this concern
gains approach (Banks, 1992, personal communica-                  that should be considered by meat animal geneticists.
tion).                                                            This is the adjustment of cow herd-life for lactation
   Beef Cattle. In the United Kingdom, Simm et al.                milk yield to give a genetic trait in the objective.
(1986) developed selection indexes to increase the                Gibson et al. (1992) developed several alternative
efficiency of lean meat production in beef cattle. Their          indexes for varied current and proposed component
breeding objective and selection indexes included food            pricing arrangements for Canada. Even though opti-
conversion efficiency. This was followed by work from             mum indexes differ for differing situations, these
Australia (Ponzoni and Newman, 1989), New                         authors note that industry efficiency justifies using a
Zealand (Newman et al., 19921, and Canada (Enns et                single index.
al., 1992; MacNeil and Newman, 1992; MacNeil et al.,                 Another approach for dairy is that of Strandberg
1992). Newman and MacNeil (1992, unpublished                      ( 1992a,b), who calculated two lifetime functions, net
data) have developed a breeding objective function for            income per year of productive life and lifetime income
a typical beef production system of the northern Great            divided by costs. These are used as alternative single-
Plains of the United States. This function is presented           trait objectives. Linear selection indexes were devel-
in Harris and Newman (1992). The target production                oped that include early-in-life measurements. Al-
system is spring calving, weaning at 6 mo, grazing for            though this study was informative about the relation-
approximately 200 d to gain .57 kg gain per day, then             ships between alternative indexes, these indexes do
feedlot growth to gain 1.36 kg per day for 135 d to               not allow incorporation of unequal amounts of infor-
yield slaughter animals around 545 kg at approxi-                 mation from relatives through substitution of EPD
mately 18 mo of age. A linear approximation of the                into an economic function. Such an economic function
profit function for a single annual reproduction cycle is         can probably be developed from the data described by
used. The set of economic traits is quite different from          Strandberg (1992a). The calculations are similar t o
the set of performance traits that might be evaluated.            those of Balaine et al. (1981) but the data set is

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2192                                           HARRIS AND NEWMAN

larger so that genetic rather than just phenotypic                 for predicting feed from body weight, egg weight, and
relationships might be estimated.                                  rate of lay. Stewart et al. (1991) included extra feed
                                                                   for number weaned and days to weaning in swine.
Common Structure                                                   Ponzoni (1986) included ewe feed intake and off-
                                                                   spring feed intake as economic traits to be predicted
   The preceding discussion emphasized several differ-             indirectly from other traits. For dairy, Allaire and
ences among the several objectives and indexes for                 Thraen (1985) deducted energy costs for fat and
different classes of livestock. However, definite                  protein content of milk.
similarities in structure are also noted. All classes                 Stewart et al. (1990) included feed per unit of gain
have one or more products; all have inputs of breeding             and days per unit of gain to a fixed market weight at
stock and feed. Facilities, labor, and scheduling are              105 kg to account for offspring feed costs and offspring
involved in each. Weather and pathogens might have                 labor and facilities costs, respectively. For most other
disturbing influences in all. The major economic                   objectives, age a t marketing and at weaning are
categories of concern are 1) product income, 2 1 female            considered fixed, so labor and facilities costs are fixed.
parent expenses, and 3 ) progeny growth expenses. Of                  Akbar et al. (1986b) provide the only example with
course, when eggs or milk are the primary products,                livability included in the objective function with
progeny growth is absent or secondary. Subdividing                 broiler, grower, and layer livability included. Although
these further, product income usually involves a                   usually considered lowly heritable, such traits are
number of progeny per parent, b ) product per progeny,             economically important in other classes but might be
and c) quality of product. Examples of component                   evaluated as herd-life as in Allaire and Gibson ( 1992)
traits for progeny per parent are rate of lay, settabil-           for dairy.
ity, fertility, and hatchability for broilers (Akbar et
al., 1986b), number born alive and number weaned in                Single vs Multiple Objectives
litter for swine (Stewart et al., 1990), weaning rate
for beef (Newman et al., 19921, and number of                         Poultry and swine production, and t o a lesser
lactations and age at first calving for dairy (Balaine et          degree dairy production, have evolved t o be more
al., 1981). Example economic traits for the product                intensive with confinement housing, artificial ventila-
per progeny category are age at first egg and rate of              tion, and prepared rations. These systems facilitate
lay for layers (Fairfull et al., 1991), body weight and            more control over the nutritional and environmental
dressing percentage for broilers (Akbar et al., 1986b3,            conditions under which the animals function. Under
fleece weight at certain stages of life for wool sheep             such systems, the objective when purchasing breeding
(Ponzoni, 19861, and weaning weight (Newman et                     stock is to obtain a high potential for reproductive,
al., 1992) for beef and annual milk production for                 growth, and(or) lactation performance. This is fol-
dairy. The quality of product category includes traits             lowed by the producer attempting to provide the
for specific gravity, egg weight, and Haugh units for              nutritional and environmental conditions to support
layers (Fairfull et al., 19911, dressing percentage and            the greater performance of resulting progeny. Thus,
percentage of breast-thigh-leg for broilers (Akbar et              breeding improvement, to a large degree, can be
al., 1986b), backfat for swine (Stewart et al., 19901,             accomplished by a single objective for increased
fiber diameter for wool (Ponzoni, 1986), and percent-              efficiency of production. Of course, when terminal
age of fat and protein for dairy (Allaire and Thraen,              crossing systems are used, breeds contributing to the
1985). Traits reflecting products in addition to the               production of parent females merit greater economic
primary one are body weight for spent layers (Fairfull             emphasis upon traits relating to the efficiency of
et al., 19911, body weights for wool sheep (Ponzoni,               female reproduction. By contrast, breeds producing
19861, and calf weight and final cow weight for dairy              terminal sires justify more emphasis on male
(Balaine et al., 1981).                                            reproduction and the economic importance of traits of
   For the two categories of parent female costs and               efficient growth is greater than for maternal breeds.
progeny costs, each has often been subdivided into                    Beef cattle and sheep, especially parent stock, are
feed costs as a function of feed weight and into labor             usually produced under more extensive conditions that
and facilities costs as a function of time. Labor and              use range grasses. Thus they are subject to extremes
facilities costs for parent females are often considered           of temperature and availability of forages. Interac-
constant for a fixed period of time (such as an annual             tions of breed differences with environment are
cycle), but Stewart et al. (1990) included days to                 important with Bos indicus breeds adapted to tropical
weaning for swine and Balaine et al. (1981) included               or subtropical conditions. With numerous variations of
charges for number of mastitis treatments, number of               production systems, there might be several breeding
breeding services, and herd-life for dairy. Ponzoni and            objectives, one for each production and marketing
Newman (1989) and Newman et al. (1992) itemized                    system, with a regional basis or other bases for
some specific marketing and husbandry costs in their               differentiating production systems. Unfortunately, re-
objectives for beef. Fairfull et al. (1991) directly               search has not specified these production systems or
considered feed for layers as a cost but with an option            described how breeding objectives differ between

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                                              BREEDING FOR PROFIT                                                    2193
them. All producers should have the specific objective            Barwick and Hammond, 1990; Brash et al., 1990;
when purchasing breeding stock of improving the                   Fenwick et al., 1991) to a computerized procedure for
 profitability of their operations. The several producer-         assisting breeders to develop beef objectives in Austra-
 customers of a breeder may have somewhat different               lia, termed B-OBJECT. This is used in conjunction
 objectives, but the breeder needs a single objective             with the national beef genetic evaluation scheme,
(direction) to guide selection. Normally this objective           BREEDPLAN. Features of the B-OBJECT procedure
would be the average of the objectives of the cus-                include partial budgeting, cost calculations, sales
tomers. Of course, breeders strive to obtain more                 pricing from recent history, discounting costs and
customers and are likely to prefer a broad-purpose                incomes for differences in time, and several alterna-
objective so as t o include a wide mix of potential               tives to accommodate ways of managing forage
customers. They can satisfy differences in needs of               availability. To quote one of the developers (Barlow,
customers from the genetic variability that occurs in             19891, “Customization should ensure the greatest
the progeny of selected parents.                                  adoption and commitment to use of breeding objec-
   There are genotype-environment interactions for                tives.,,
numerous traits as expressed in various production
systems. More study is needed to clarify whether the              Role of Simulation Modeling
differences in objectives justify segmentation of the
U.S. beef or sheep industries and use of different                   Simulation modeling has received considerable
objective functions within breeds for specialized                 attention in the last 20 yr. Many studies have focused
production systems (different pyramids). Objectives               on the impact of genetic improvement programs on
differing between breeds according to how the breeds              livestock production systems. Simulation studies of
are used in crossbreeding systems seem clearly                    this nature in beef are by Wilton et al. (1974), Morris
justified. The pertinent question for a breeder is                et al. (19761, Sanders and Cartwright (1979a,b),
whether greater genetic improvement can be made for               Notter et al. (1979a,b,c), Congleton and Goodwill
a specific objective ( t o achieve more breeding stock            (1980a,b,c), Bourdon and Brinks (1987a,b,c), and
sales or sales at a higher price from a narrower base of          Lamb et al. (1992a,b,c). Similar studies in swine
potential customers) than for a more general objective            include that of Tess et al. (1983a,b,c),De Roo (19871,
for a broader base of potential customers. The answer             De Vries (1989a,b,c), De Vries et al. (1989, 1990a,b),
requires a thorough analysis of variability in profit             De Vries and van der Steen (19901, Pomar et al.
objectives of producer-customers across the livestock             (1991a,b,c), and Faust et al. (1992a,b). Two series of
industry that are served by a group of breeders. This             studies in sheep are by Blackburn and Cartwright
requires the definitions of breeding objectives for               (1987a,b,c) and Wang and Dickerson (1991a,b,c).
several segments of the industry to assess differences.           Specific questions addressed by these simulation
                                                                  studies vary considerably, but all involve the interface
Customized Indexes                                                between genetic improvement and production systems
                                                                  for livestock. The profit functions discussed as breed-
   Breeding objectives, especially for ruminants, might           ing objectives in this paper involve the same interface
be specific for an individual breeder and be oriented to          and might be described as single-equation models. A
the needs of the group of producers that are the                  single equation is necessary for index construction.
customers. Then, the breeders and producers should                With the single-equation form, there is risk of
develop the objectives to direct their efforts (Willham,          oversimplification.
1979). Because of the mathematical nature and                        Simulation modeling offers potential for more
economic content, few livestock breeders, except for              detailed and mechanistic understanding of the inter-
some corporate poultry and swine geneticists, have                face between breeding and production. Tess et al.
themselves developed breeding objectives as precise as            (1983a,b,c) and Wang and Dickerson (1991a,b,c)
those discussed.                                                  thoroughly studied the economic impact of fundamen-
   The Australians have responded to the dilemma                  tal biological traits on production systems of swine
that breeders should develop objectives but geneticists           and sheep, respectively. The tangent slopes of curves
have the combination of technical abilities and moti-             describing the relationships studied could be used as
vation to develop objective functions. Stewart et al.             relative economic values in a linear approximation to
( 1988) adapted the STAGES objective functions and                the models and thus become a linear objective
indexes to Australian economics but allowed a weight-             function. In addition, with simulation, the question of
ing of the sow-herd subobjective and the postweaning              the economic value of genetic changes can be inter-
subobjective according to anticipated future market-              related to questions concerning the overall design of
ings. Also, they developed a computer procedure                   breeding program. Multi-stage selection, integration of
allowing modification of economic values for specific             selection and crossbreeding, and the system for
conditions of the breeder and the anticipated cus-                disseminating genetic improvement all seem appropri-
tomers. This approach is termed “customized indexes.”             ate for further study by simulation modeling. In
   The customized index concept has been extended                 particular, the papers referenced above by Faust,
(Upton et al., 1988; Barlow, 1989; Upton, 1989;                   Lamb, De Roo, and De Vries and their co-authors

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2194                                           HARRIS AND NEWMAN

focused on optimum industry structure and dissemina-              4 are all needed to achieve the full potential for
tion. Design of production systems that efficiently use           genetic improvement in a relevant direction. For this
genetically improved livestock performance is also a              improvement to reach production herds or flocks, a
pertinent use of simulation. For example, in intensive            dissemination system (aspect 3 ) is necessary. Defi-
production systems for poultry and swine, changes in              ciencies in any one of the four reviewed aspects of
the diets are often required as performance potentials            breeding limit the impact of the other three.
change.                                                              If the design of a breeding program is complete,
                                                                  synergistic combinations of the four will be chosen
                                                                  (Harris et al., 1984). Bichard (1987) and Webb
                System Integration                                (1989) discussed those four components from the
                                                                  perspective of large corporate swine breeders mer-
   It seems clear that all four avenues of inquiry                chandizing seedstock to producers. A large corporation
reviewed here are relevant and pertinent components               with breeding, production, and marketing integrated
of effective animal breeding programs. The four basic             together has the view presented by Nicoll (1989,
components of an effective breeding industry, what-               1990). Difficulties occur for implementation in the
ever the class of livestock or location, are                      breeding industries of some countries, such as the
                                                                  United States, where loosely organized small breeders
1. computerized statistical procedures to use the                 are sources of breeding stock for cattle, sheep, and
   recorded performance and pedigree information to               sometimes swine. When there are many small herds
   accurately predict genetic differences in the eco-             or flocks participating in the industry, the appropriate
   nomic traits                                                   dissemination structure will likely be decided by
2. a systematic testing and selection scheme                      industry participants in the marketplace. This struc-
   designed to optimize selection intensity and gener-            ture is more naturally achieved when the breeding
   ation interval and to record relevant performance              objective is mutually agreed on and the conceptual
   traits closely associated with the components of               pyramid is closely related to the economic evaluation
   economic concern to livestock producers                        of individual animals. A good example of many
3. a dissemination structure to disseminate and                   breeders and producers organizing together and im-
   expand the genetic improvements resulting from                 plementing these four aspects is the group breeding
   selection at the apex of the pyramid down through              schemes of Australian Merino breeders supported by
   the intermediate tiers. The expansion and pay-                 the testing and data services of WOOLPLAN directed
   ment for value of genetic products must provide                toward breeding objectives such as those defined by
   adequate leverage to profitably reimburse the                  Ponzoni (1991/92). However, there are reports (Pon-
   breeder(s) for their efforts. The last component is            zoni, 1992) of difficulties sometimes occurring due to
   needed to properly orient the other three.                     differing objectives for different environments, chang-
4. an economic breeding objective function that                   ing objectives over time, and differing perceptions of
   reflects the impact on the economy of production of            objectives by breeders in a group. Nicoll (1993,
   their respective products by livestock producers,              personal communication) reports similar difficulties
   including cases in which the production animals                for group breeding schemes in New Zealand.
   are crossbred.                                                    The free enterprise business viewpoint is that, in a
                                                                  coordinated industry, selection by the breeder on the
   Dickerson and Hazel (1944) pointed out that the                appropriate index should genetically improve the
rate of genetic improvement involves four components:             breeder’s herd in traits of economic benefit to his
intensity of selection, accuracy of selection, generation         producer-customers. When producer-customers pur-
interval, and genetic variability. The first three will           chase breeding stock (or other genetic products), they
likely differ for each of the four selection paths                also practice selection, both among breeders and
described by Rendel and Robertson (1950). The                     among breeding animals for sale within a herd. If the
economic breeding objective specifies which traits                combination of genetic improvement in breeders’ herds
contribute in what degree to the pertinent genetic                and the selection by producer-customers is in a n
variability that is the real object of selection. The             appropriate economic direction, economic improve-
testing and selection scheme determines the intensity             ment in the functioning of production will result. But
of selection and the generation interval for each of the          the producer should be sharing the resulting economic
four paths. Genetic prediction procedures determine               improvement in his herd by paying for his breeding
the accuracy of selection for each of the four paths.             stock purchases in relation to the increased value of
This involves not only the accuracy of the EPD for                the improved genetic product. With this increased
each performance trait but also the accuracy of                   income, the successful breeder is rewarded and
predicting non-recorded economic traits and the ac-               motivated to continue his efforts at genetic improve-
curacy of combining them. Because the rate of                     ment. Such synergistic partnerships between breeders
improvement involves products of accuracy, variabil-              and producers seems likely to increase in the future as
ity, and intensity divided by interval, aspects 1,2, and          the industries become more business-oriented.

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                                              BREEDING FOR PROFIT                                                                  2195
   To facilitate techniques such as semen or embryo               Further studies are warranted but the approach may
collection, elite animals may need t o be brought                 need to be in response to organizational and opera-
together at one or more facilities. When breeding is              tional concerns as well as statistical concerns. For
carried out in conjunction with a pathogen control                now, any differences in effectiveness are judged to be
program, as is frequent in poultry and swine, one-way             minor relative to the advantages accruing from an
flow of genetic material down the pyramid may be                  economically sound breeding objective.
advantageous. On the other hand, an open nucleus
scheme is genetically advantageous when the animal’s
position in the hierarchy is related more to genetic                                       Literature Cited
prediction for the breeding objective function than to
herd location. For example, elite dairy cows may occur            Akbar, M. K., N. R. Gyles, and C. J. Brown. 1986a. Theory and
in any milk recording herd. After they are recognized                  application of selection indices for the improvement of modern
                                                                       poultry stocks. Arkansas Agric. Exp. Sta. Bull. 888.
as having this status, the possibility of moving them             Akbar, M. K., D. L. Harris, and C. R. Arboleda. 1986b. Development
to a nucleus herd depends on the technologies to be                    of the relative economic weights for linear and quadratic bi-
used for further reproduction and on the risks to                      oeconomic objectives in commercial broilers. Poult. Sci. 65:1834.
pathogen control programs used in producing breeding              Allaire, F. R., and E. P. Cunningham. 1980. Culling on low milk
stock. Disease problems are also noted (Ponzoni,                       yield and its economic consequences for the dairy herd. Livest.
                                                                       Prod. Sci. 7:349.
1993, personal communication) for the open nucleus                Allaire, F. R., and J . P. Gibson. 1992. Genetic value of herd life
schemes of Australian Merinos. With open schemes,                      adjusted for milk production. J. Dairy Sci. 75:1349.
introduction into the elite herd or flock might require           Allaire, F. R., and C. S. Thraen. 1985. Prospectives for genetic
extraordinary procedures for pathogen control.                         improvement in the economic efficiency of dairy cattle. J . Dairy
   The four aspects of animal breeding will be                         Sci. 68:3110.
                                                                  h e r , P. R., and G. C. Fox. 1992. Estimation of economic weights in
modified in form, but all will remain pertinent, if and                genetic improvement using neoclassical production theory: An
when new techniques become practical. Enhanced                         alternative to rescaling. Anim. Prod. 54:341.
reproduction techniques (e.g., multiple ovulation,                Arboleda, C. R., D. L. Harris, and A. W. Nordskog. 1976a. Efficiency
embryo transfer, cloning) will increase the intensity of               of selection in layer-type chickens by using supplementary
selection and possibly increase the rate of dissemina-                 information on feed consumption. I. Selection index theory.
                                                                       Theor. Appl. Genet. 48:67.
tion down the tiers of the pyramid. Improvement in                Arboleda, C. R., D. L. Harris, and A. W. Nordskog. 1976b. Efficiency
the accuracy of selection (e.g., through marker-                       of selection in layer-type chickens by using supplementary
assisted selection from gene mapping) may increase                     information on feed consumption. 11. Application to net income.
the rate of genetic improvement at the apex but                        Theor. Appl. Genet. 48:75.
recording, evaluation, expansion, and dissemination               Arnason, T. 1982. Prediction of breeding values for multiple traits in
                                                                       small non-random mating (horse) populations. Acta Agric.
will still be necessary. Gene insertion (e.g., transgen-               Scand. 32:171.
ics) might someday give a different form of genetic               Arthur, J . A. 1986. A evaluation of industry breeding program for
improvement, but recording, evaluation, expansion,                     egg type chickens. In: G . E. Dickerson and R. K. Johnson ( E d . )
and dissemination will still be needed. For these                      Proc. Third World Cong. Genet. Appl. to Livest. Prod. p 325.
                                                                       Univ. of Nebraska, Lincoln.
future possibilities, economic breeding objectives will           Balaine, D. S., R. E. Pearson, and R. H. Miller. 1981. Profit func-
still be relevant to facilitate decisions concerning                   tions in dairy cattle and effect of measures of efficiency and
modification of genetic improvement and production                     prices. J. Dairy Sci. 64:87.
systems and for performing benefit-cost assessment.               Bandy, T. R., D. L. Harris, and T. S. Stewart. 1991. Empirical index
                                                                       development for bioeconomic objectives in a three-way cross in
                                                                       mice. J. Anim. Breed. Genet. 108:123.
                                                                  Banks, R. 1990. LAMBPLAN: An integrated approach t o genetic
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                                                                       Assoc. h i m . Breed & Genet. 8:237.
   Genetic evaluation for an economic breeding objec-             Barlow, R. 1987. An introduction to breeding objectives for livestock.
tive will facilitate the sorting of breeding animals into              Proc. Aust. Assoc. Anim. Breed & Genet. 6:162.
                                                                  Barlow, R. 1989. Breeding objectives-current state of knowledge. In:
the proper tiers of the pyramid-shaped dissemination                   S. Newman ( E d . ) Proc. A.P.C. Committee Workshop on Beef
structure. Striving for payment-for-value as described                 Cattle breeding, Mt. Gambier, South Australia.
by this genetic evaluation will motivate the industry             Banvick, S. A,, and K. Hammond. 1990. Apportioning emphasis
to function to its potential for providing improved                    between the seed-stock producer and user in establishing the
genetic products to the production portion of the                      breeding objective. Proc. Aust. Assoc. Anim. Breed & Genet. 8:
industry. Economic orientation of genetic evaluation              Bennett, G. L., G. E. Dickerson, T. S. Kashyap, and J.A.B. Emsley.
with consensus by many industry participants as to its                  1981. Effectiveness of multiple trait index progeny-test selec-
validity is an alternative to corporate ownership for a                tion for field performance of strain-cross layers. 11. Predicted
progressive breeding industry. However, consensus                      and realized responses. Poult. Sci. 60:22.
does not come easily. Uncertainties and differences of            Berger, P. J., G. R. Luecke, and J . A. Hoekstra. 1989. Iterative
                                                                       algorithms for solving mixed model equations. J . Dairy Sci 72:
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