The value of fat and the cost of labour will rise in the calculation of the Economic Breeding Index (EBI) from January 2018, the Irish Cattle Breeding Federation (ICBF) has said.

Changes in the marketplace, butter prices and increased labour costs are reflected in the increases.

ICBF has said that the model was predicted with the help of Irish dairy processors and is based on current, short-term (within the year) and long-term market returns (within five years).

In turn, this has resulted in a projected milk price of 30.5c/l and a protein to fat ratio of 1.7:1.

The new changes will see the cost of labour updated from €12.44/hour to €15/hour and the cost of a caesarean section has also risen to €235, with a call out fee of €90.

As a knock-on from the increase in labour cost, the cost of rearing heifers has risen from €1,545 to €1,570.

Fat and protein

In the new values, there will be an increase in fat and decrease in protein value, which ICBF has said will be done by taking the market return and subtracting the cost of production.

The reason fat doesn’t have an even higher value, in keeping with the current market price, is because it takes almost double the energy for a cow to produce a kilogram of fat than it does to produce a kilogram of protein, it outlined.

Cost-wise, processing a kilo of fat is also much higher than protein.

This will mean that fat will increase in value by €1.04/kg to €2.08/kg and protein will reduce in value by €1.06/kg to €5.58/kg.

Teagasc plans to re-visit these calculations every two years.

Higher negative values will be placed on lameness and mastitis, so that they reflect the impact on production costs, as well as calving difficulty and calving interval.

All these changes will be implemented in the next EBI evaluation which will be available on 10 January 2018.

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