The economic weighing factors are determined by calculating the difference in farm income, when a marginal increase in production per cow takes place, while all the other conditions remain unchanged. The situation (milk price) likely to apply in eight to ten years is taken as the basic assumption in this calculation. The marginal increase in production per cow is the result of the marginal increase of the genetic capacity of the cow for higher production. So, what does an increase in the breeding value of a cow of one kg lactose, fat or protein represent at a dairy farm? When determining the Inet it is important to consider what is likely to change in the coming years. Important factors are the milk price the farmer receives and the feed cost.
Costs for energy and DVE
The calculation model calculates the energy and protein required for milk, fat and protein. To produce lactose or fat, only energy is required, producing protein requires energy and protein. The feed costs for a kg lactose, fat or protein are calculated as (energy requirement)*price of energy)+(protein requirement/DVE)*(price of/DVE). Per kg lactose, fat and protein respectively 2.43, 5.9 and 3.0 kVEM energy is required and for 1 kg of protein 1.56 kDVE is required. To calculate the feed costs, a price for medium-priced A-pellets of 18 euro/100 kg is assumed and a price ratio of 6: 1 between kDVE and kVEM. This results in a price of 1 kVEM of € 0.107 and a price of 1 kDVE of € 0.639.
Milk price in the future
The results of decisions made about breeding now, will be realized in performance of the offspring in eight to ten years time, so when considering the significance of the Inet we have to estimate what milk will be worth eight to ten years ahead. The trends to be expected are: 1) the world's population will continue to grow, entailing a corresponding increase in the need for food; 2) the economy will continue to grow in emerging countries which also have booming populations; 3) the average wealth of consumers will rise and thereby also the demands placed on food. The demand for dairy products rises in line with increasing prosperity and therefore the consumption of dairy produce will rise, partly due to a shift in eating patterns from vegetable based protein to animal based protein. The long-term expectation is that the rise will be around 30% in developing countries and around 10% in developed countries. On a global level greater attention for the environment is at stake, whereby reduction in the greenhouse gas emissions will become very important. One way of achieving this reduction in emissions per kg of milk is to produce milk more efficiently. This can be achieved by increasing the production per cow, for example.