Introducing Net Merit 2025

Written by CDCB

January 31, 2025

Introducing Net Merit 2025

What is Net Merit?

The Lifetime Net Merit (NM$) index ranks dairy animals based on their combined genetic merit for economically important traits. The 2025 NM$ update revises some methods to estimate trait values and many income and cost variables, such as milk prices, feed requirements, and reproductive options. The 2025 revision does not include genetic evaluations for any new traits.  

Selection on an index is the best way to improve cow profitability in each generation. NM$ combines economic values for 12 individual traits plus five composite subindexes into a single index value.

Where does Net Merit come from?

The first version of Net Merit was published in 1994 by USDA’s Animal Improvement Programs Laboratory. It has been updated routinely since then, typically at three- or four-year intervals. This work is led by Paul VanRaden at USDA with input from university and industry experts. The guiding principle in the Net Merit construction is that index weights are based on an economic model that considers, as accurately as possible, incomes and expenses over the life of a dairy cow. These values are sourced from public sources whenever possible. For example, average prices for milk and individual components in Federal order markets are obtained from USDA’s Agricultural Marketing Service. When prices are very difficult to obtain, such as actual costs paid for semen, good-faith estimates are used.

Net Merit $ 2025 is the result of months of work by many experts. The initial version of 2025 Net Merit was drafted in summer 2024 by the USDA Animal Genomics and Improvement Laboratory (AGIL). The 2025 NM$ update was first publicly discussed at the CDCB Industry Meeting during World Dairy Expo, and the AGIL work was then presented to university experts at the S-1096 Multistate Research Project meeting1 in late October. Based on feedback, changes were made to some of the economic values and the index was updated. In November, it was presented to two CDCB committees for review: Genetic Evaluation Methods and Producer Advisory Committees. Finally, the CDCB Board of Directors discussed and voted to accept the proposed revision at their December 2024 meeting.

Future index revisions will be coordinated by CDCB staff, and will continue this history of collaboration with USDA, academic, and industry partners.

What if I’m paid differently for my milk than Net Merit assumes I am?

It is impossible to design a single selection tool that reflects how every farmer in the U.S. is paid for their milk. This means that you might look at NM$ and conclude that the formula over-values one trait and under-values another based on your situation. Rather than focus on one number or another, it’s more helpful to look at the big picture. USDA provides the expected genetic progress in each trait from selection on NM$, and it’s better to see if the trends for the traits most important to you are in the desired direction.

In addition to Lifetime Net Merit (NM$), CDCB also publishes three other selection indices that may better reflect the way you get paid by your processor:

  • Cheese Merit (CM$) is designed for those selling milk to a cheese plant or processor that wants lots of protein and less carrier. CM$ includes more emphasis on protein and somatic cell score, less emphasis on fat, and negative emphasis on milk.
  • Fluid Merit (FM$) is intended for use by producers who are selling their milk to a bottling plant. FM$ includes much more weight on milk volume and butterfat than other CDCB indices.
  • Grazing Merit (GM$) is intended for those producing milk in a seasonal, pasture-based system. It includes much more weight on fertility and much less weight on productive life.

The weighting of traits for fertility, calving, conformation, health, and feed efficiency looks similar across NM$, CM$ and FM$. They stand apart from each other due to how the yield traits are balanced.

How is Net Merit changing in 2025?

The most notable changes in 2025 Net Merit $ are:

  • More emphasis on butterfat and less emphasis on protein due to recent price trends.
  • Cow livability and heifer livability receive more emphasis, and productive life has less emphasis due to higher cull cow and heifer calf prices.
  • Body Weight Composite gets more negative emphasis because of higher maintenance costs estimated from actual feed intake data. Residual Feed Intake receives more emphasis due to its higher reliability and standard deviation, because more feed intake records are now available.
  • The 2025 and 2021 NM$ indexes are correlated by 0.992 for young Holstein bulls and 0.981 for recent progeny-tested bulls. This means there will be some reranking of bulls when the index is changed in April 2025; most changes will be modest.

Where can I find more information about Net Merit?

USDA AGIL has published a technical document which details how Net Merit is calculated. Also available is a PowerPoint presentation by Paul VanRaden summarizes the changes and shows examples of how genetic values can affect a cow’s lifetime profit.

1 This project is supported by the State Agricultural Experiment Stations from the Hatch Multistate Research Fund provided by the National Institute for Food and Agriculture.