Comparisons of economic values with and without risk for livestock trait improvement

This paper investigates the effect of incorporating risk in the derivation of economic values for livestock trait improvement. Two ways of obtaining economic values were contrasted, without consideration of risk (traditional economic values) and with incorporation of variance of profit and risk attitudes of livestock producers (risk-rated economic values). Traditional economic values were derived using a profit model, whereas risk-rated economic values were derived using a risk-rated profit model. A simplified example was considered for selection for the feedlot phase of beef production. One output trait (average daily gain) and one input trait (daily dry matter intake) and one management variable were considered. Risk was defined as the variance of profit and producerʹs risk attitude. Traditional economic values and risk-rated economic values differed in both absolute and relative terms. When relative economic values were considered, differences between traditional economic values and risk-rated economic values increased with risk premium. Differences were greater without optimisation of management than with optimisation, although in the example used there was limited impact on expected responses to selection in the component traits. Including risk preferences in breeding goals affects the cost–benefit analysis of breeding programs and might affect directions for selection.