2020, Volume 23, Paper 2

ISSN: 2209-6612

The Geneticisation of Farm Management Advice: Add Farm Economics

Bill Malcolm and Richard Shephard

Abstract

The discipline of farm economics is central to sound advice about farm management decisions, including decisions about investing in animals with superior genetic make-up. The economic value of a genetic trait in an animal farm system depends on the sum of its capacity to create more income from sale of product at the same level of input use, or capacity of the superior animal to use less input and produce the same income, and the capacity to contribute extra profit in a changed farm system in which environmental and genetic constraints are lifted. Understanding and applying principles of production economics, including diminishing marginal returns to added inputs of superior genetic merit and equi-marginal returns to all inputs to farm systems, leads to realistic assessments of the potential contribution added gene inputs can make to farm profit. The key is recognizing that the contribution of additional improved inputs of a genetic trait varies depending on the existing state of genetic potential of animals in the system and assists the interpretation of the output from genetic traits indices and the associated combined dollar indices.

Keywords: Farm economics, animal genetic improvement, genetic traits, breed indices.

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