INFLUENCE OF INTEREST-RATE ON CALCULATION OF ECONOMIC WEIGHT FOR SOMETRAITS IN CATTLE

The selection objective in choosing animals for breeding should be the predicted economic profit of progeny in a production herd. The value of increasing the level of an economically important trait by one unit depends on three factors: prices of additional production and costs d ue to increasing the average level of the trait, the time interval bet ween the year of birth of the bulls' progeny and the year in which the se returns and costs will express, and the number of animals in the po pulation in which the superiority is expressed. A method of the calcul ation of economic weights for several traits where these factors are t aken into account is described. A discounted profit function is used f or a closed herd production model including all categories of animals (calves, heifers, bulls, cows culled during the first lactation, older cows). The base year is the year of birth of progeny. Discounted prof it is computed as the difference between returns and costs discounted to the base year (equation (2)). Discounted returns or costs are calcu lated as the product of returns or costs per animal in all categories and the discounted expression for these returns and costs (equation (2 ) and (3)). For the category ''older cows'' the summarized discounted expression for all lactations was calculated by equation (5) (for reve nue and variable cost from milk production) and (6) (for revenue from culled cows). The economic weights are defined as the first derivation of the discounted profit function on the individual traits (equation (4)). In the calculation of economic weights of milk and beef producti on traits, the returns and costs per generation of progeny are conside red. The longer calving interval and the longer production life of cow s affects the herd structure (the number of animals culled per cow and year) in the next generation. Therefore, the profit from the next gen eration discounted to the base year is also taken into account in the calculation of economic weights of these two traits. The biological, e conomic and production input parameters applied in the Czech Republik in 1989 were used in the model calculations of the economic weights fo r traits of meat and milk production, reproduction and length of produ ction life of cows in dual-purpose cattle (Wolfova et al., 1991, 1992a ,b,c,d; Tab. I and II). Five models are established for two variants o f fattening bulls, or two culling strategies for cows, resp., and thre e different complexes of traits are considered. The effect of differen t models and different interest rates on the economic weights can be s een in Tab. III on the relation between the values of increasing the l evel of milk production (FCM) and the level of average daily gain of b ulls. The economic weights of other traits for the interest rates 0, 0 .08, 0.10 and 0.12 presented in Tab. III apply to model 3.