NZ Animal Evaluation December Updates
In the December Animal Evaluation (AE) run, NZ Animal Evaluation (a DairyNZ subsidiary) will introduce three key updates that may lead to some re-ranking of bulls.
- Annual update to economic values (EVs)
- Adjustment primarily to milk volume EV to include lactose
- Review of the National Breeding Objective (NBO) model
These routine updates ensure that our independent evaluation is aligned with the latest industry statistics, reinforcing NZ Animal Evaluation’s commitment to accuracy and transparency. This helps farmers make better breeding decisions that improve herd performance and profitability under current economic conditions.
All updates have been developed in consultation with a number of breeding industry stakeholders and will be live in the Animal Evaluation run published on Friday 5 December 2025.
1. Annual Economic Values update
EVs are a core part of Breeding Worth (BW) calculations. They are based on five-year rolling averages of key costs and income streams and this update is a routine, annual event to ensure the EVs reflect the latest on-farm costs and returns New Zealand farmers face.
These updates don’t change the underlying genetic merit of animals – they update how those traits are valued economically.
The most significant EV changes from this update are:
- Milkfat: EV has increased by $1.11 (21%) due to the value of milkfat having risen significantly over the past few years.
- Milk Volume: an adjustment to the EV of milk volume to reflect the strong correlation between lactose and volume. This follows the decision by Fonterra to add a lactose-based payment alongside fat and protein for the 2026/27 season. The EV has reduced by $0.03 (– 27%).
- Liveweight: EV has decreased by $0.33 (20%) following updates to the liveweight components to better reflect current growth patterns and the costs of rearing heifers.
Other EV’s experienced similar adjustments to last year with changes varying between -3 and 7%.
We expect little to no re-ranking of bulls due to these updates. For bulls enrolled in AE the correlation between the old and new BW is 0.998, meaning nearly all bulls retain their relative ranking.
| Trait (units) | New Economic Value | $ Change |
| Milkfat (kg) | $6.38 | $1.11 |
| Milk Protein (kg) | $6.38 | -$0.72 |
| Milk Volume (L) | -$0.08 | $0.03 |
| Liveweight (kg) | -$2.01 | -$0.33 |
| Fertility (%) | $6.25 | $0.35 |
| Somatic Cell Score (log cells/ml) | -$47.93 | -$1.50 |
| Functional Survival (%) | $1.85 | -$0.05 |
| Gestation Length (days) | -$2.01 | -$0.06 |
| Udder Overall (score) | $64.56 | $4.23 |
| Body Condition Score (score) | $179.02 | $4.45 |
2. Milk Volume EV adjustment - lactose now included
Lactose is a key component of milk, essential for milk powder standardisation and dairy product formulation. Historically, New Zealand has relied on imported lactose to meet milk powder requirements, and up until now, lactose has not been part of the genetic selection focus in New Zealand.
With Fonterra introducing a lactose-based payment from the 2026/27 season, NZ Animal Evaluation is adjusting the EV of milk volume. Rather than adding a new trait, lactose will be captured primarily through milk volume EV, ensuring Breeding Worth (BW) reflects its value.
These adjustments slightly reduce the negative weighting on milk volume within the EV. This approach was chosen due to the very strong relationship between volume and lactose, and this method will provide an effective and accurate representation of lactose for breeding decisions.
3. National Breeding Objective (NBO) model review
NZ Animal Evaluation calculates EVs by incorporating trusted industry and scientific sources for each trait, combining these inputs to produce the overall economic value of that trait.
A recent review of the sources used in the EV model has been carried out by DairyNZ economists to ensure the data sources are future-fit and reflect today’s pasture-based farming systems.
This review strengthens the reliability of the model and ensures it continues to reflect real-world farm economics. Updates have been made to ensure the model is robust, with further refinements scheduled for next year.
What do these updates mean for farmers?
These updates provide more accurate and relevant independent evaluations, helping farmers select for traits that boost herd performance and profit under today’s conditions.
With the introduction of lactose into BW this year, the focus for breeding decisions should remain on fat and protein as they are key contributors to on-farm profit and form the majority of milk income.
Farmers can expect some shifts in BW values and bull rankings when the new values are applied from 5 December, but this reflects a change only in how traits are valued economically, not a change in animals’ underlying genetic merit.
Frequently Asked Questions
Why are we introducing lactose into BW when it is not being paid for yet?
Fonterra has confirmed a new milk payment structure that will include lactose from the 2026/27 season. By updating BW now, we’re taking a forward-looking (but considered) approach to ensure genetic selection aligns with the industry’s future direction. This ensures that breeding decisions made today account for the value farmers will receive in the years ahead.
Why do bulls rank similarly despite all the changes?
Although there have been several updates to this year’s economic values, the effects are largely counteractive i.e. increases and decreases in EVs have caused minimal overall change to BW. As a result, we see a small amount of re-ranking in bulls. Farmers can be confident that BW selection decisions made historically are highly aligned with the current market conditions and costs.
Where do costs and inputs used in calculating EVs come from?
NZ Animal Evaluation ensure that the inputs and cost used in calculating EVs are the most current and accurate information available. The information is sourced from:
- DairyNZ Statistics and Economic Survey
- Fonterra
- Government resources
- Scientific literature
What is the National Breeding Objective?
NZ Animal Evaluation is the owner and custodian of the National Breeding Objective, which is to breed dairy cows that efficiently convert feed into profit. This determines which traits and information are crucial for farmers to enable improvements in genetic gain. Through it, new traits and data changes are established and reflected in the Breeding Worth index.
More on EV’s and BW
- See here for more info on Economic Values and how they are calculated.
- See here for more on Breeding Worth and how it impacts your herd value and profit.
- Learn more about NZ Animal Evaluation – the industry-good organisation for genetics and animal evaluation.
Contact NZ Animal Evaluation
For further information or any questions, please email: nzael.manager@dairynz.co.nz
Contact Fonterra
For further information or any questions regarding the introduction of Fonterra’s lactose-based payment, please contact Malcolm Ellis: malcolm.ellis@fonterra.com
