Ex Ante Evaluation of the Economic Impact of Adopting Genomic Selection: The Case of Beef Cattle in Canada

Abstract

Feed efficiency is of great economic importance to the beef and cattle industry. Genomic selection can be adopted for the genetic improvement of feed efficiency in beef cattle. This study examines the economic impact of adopting genomic selection in Canadian beef industry. A multi-market equilibrium displacement model is developed to capture market and welfare effects of genomics adoption. Results show that Canadian cattle sector will benefit most significantly from genomic selection ($63.29 million), followed by the beef sector ($19.67 million), while the feed sector would be made worse off (-$1.17 million). Sensitivity analysis indicates that one more percent improvement in feed efficiency will lead to a $3.66 million increase in retail-level producer surplus change, a $11.79 million increase in farm-level producer surplus change and a $0.24 million decrease in feed-level producer surplus change. This study also identifies several parameters that are relatively important for the measurement of economic welfare changes.