Impact of milk pricing system on the economic response to selection on milk components.

The impact of various milk pricing systems on the economic weights and the resulting selection responses for milk yield and fat and protein contents in Holstein and Czech Fleckvieh were investigated. The calculations were done for the situations with and without quotas on milk yield and fat content. There was a substantial influence of the milk pricing system on the selection response. The use of index weights based on a 'wrong' pricing system reduced the total economic selection response by up to 51% of the selection response expected for an index based on the 'correct' pricing system. Financial losses in the selection response were greater with quotas than without quotas. Higher losses were also calculated for Holstein compared with Czech Fleckvieh. Incorrect assumptions on the output limitation (absence or presence of milk quotas) led only to minor reductions in the total selection response (mostly <2%) if the other parameters were correct. The results indicate that customized subindices for milk production traits would increase farmers' profit from sire selection when selling milk on the basis of different pricing systems.