The Ins and Outs of NM and Rank

Selection Indexes are great tools, and there is certainly no shortage of them available. Most countries have at least one, and many have two or more nationally published indexes – as is the case in the USA with Net Merit (NM) and TPI. In a recent article (http://www.altagenetics.com/english/alta-news/435/the-ins-and-outs-of-tpi-and-rank.html) we discussed the TPI formula and how certain weightings on traits within this index can significantly affect TPI rank. In this article we’ll cover similar issues pertaining to the NM index.

What is NM?

NM incorporates what USDA-AIPL considers economically important traits into one index. Indexes are very important selection tools because they prevent setting minimum criteria for particular traits, which limit genetic progress. However the WEIGHTS in the three categories that make up the index (production, health, conformation) are extremely influential in ranking the sires, making certain traits more or less important than you might perceive or value for your operation. Before you base all of your selection decisions on NM, have you considered how the index actually works, or what impact certain traits have within the index?

An easy way to think of NM is to group the traits that make up the formula into three main categories with their relative weighting, as in the image above. Health traits, for example, receive the most overall emphasis (48%) in the NM formula. In 1994, NM started out as primarily a production index with 74% of the weight on production traits. As recently as 2005, the index still had 55% of its weight on production. Many still perceive NM to be driven by production traits, but the current formula has a much higher weighting on health than production.

The NM formula is modified when changes in production costs or milk prices influence profit. For example, an expected change in future commodity prices could influence a change in the NM formula weightings, which could ultimately impact rank. The most recent modification to the NM$ formula was in 2010 when the weight on production decreased from 46% to the current 35%, and the weights on health traits increased significantly.

The current weights reflect an estimate of the future prices of milk, components, cull cows, commodities, replacement raising costs and other health costs, but that is what they are – estimates. Like with TPI, when considering the NM index as a selection tool, we can say that while these weights might reflect future expectations for the ‘average dairy’, the real question needs to be “do these weights accurately reflect my expectations and goals for MY dairy?!”

Impact of certain traits on NM and Rank

What does the rank on the NM list really mean? We know the perception is higher ranking = ‘better’, but ‘better’ is a very subjective term! Is the 100th bull really that much better than the 200th bull, for instance? Let’s look at an example.

Assume we have 3 bulls, AltaAGOSTO, Bull A and Bull B. AltaAGOSTO has a NM value of +717, ranking him high on the list of bulls with semen available. Bull A, Bull B and AltaAGOSTO have identical breeding values EXCEPT Bull A is one point higher for UDC and FLC and one point lower for Body Size and Bull B is one point lower for UDC and FLC and one point higher for Body Size. What would you expect the NM’s of Bull A and Bull B to be based on these differences in the conformation categories?

To answer this question you need to know the impact of each trait in the NM formula. This information is listed in the table below, with traits in red negatively affecting profit. For example, the weight for SCS is negative because lower SCS values are more profitable.

Once we know the NM for these two bulls, the next question is where would each rank on the industry wide NM list?

NM ranking

The difference in NM between the top 100 and top 200 NM ranked bulls has become very minute. In fact, when considering the industry-wide top GTPI list of bulls >14 months old, only 41 NM dollars separate the 100th bull ranked for NM from the 200th bull. Additionally, only 106 NM dollars separate the 100th from the 500th ranked bull for NM. Yes, that means 400 bulls are within 106 NM$ of each other! This is certainly not something we were used to prior to genomics, but because so many more bulls are being tested now, it is a new reality in the industry. The conclusion is obvious; the importance of 'rank' on these lists has little significance as the difference between bulls is extremely small.

Impact of certain traits on NM – example continued

If you did the calculations, you should have discovered that changing all the conformation traits by 1 point has a $70 impact on NM. Bull A would have a NM of +787, and Bull B would have a NM of +647. Bull A would rank #99 in the industry and Bull B would rank #736. Even when most of the weight is on production and health, as is the case with NM, modifying the conformation traits by one point still has a huge impact!

Based on what you’ve learned by reading about NM, rank, and by going through the provided example, the conclusions should be clear: 1) The current NM formula has the most weight on health traits, not production traits – a common misperception 2) Even though the weight on conformation traits looks relatively small, changes to those traits can have a significant impact on a bull’s rank, 3) a bull’s NM rank will change disproportionately with small increases or decreases in individual traits because of the number of bulls now being genomic tested, and 4) the best ‘NM formula’ is the genetic plan you develop with your Alta representative in Alta ValueBuilder. It’s easy – just put YOUR weights in the circles for production, health, and conformation! 

Article by: Nate Zwald and Lynsay Henderson