Evaluation of economic weights for selection and breeding in macadamia

The identification of economically sensitive traits is a critical step in the breeding process as it defines the direction of the breeding program. Quantifying how each trait affects the profitability of the production system further increases the efficiency of a breeding program. Production activities are ultimately aimed at maximising the level of consumer satisfaction with the product concerned which is, in turn, relfected by the profitability of the growing and processing stages of the production process. In that regard, breeding objectives need to be consistent with maximising the profitability of the farm production sector by producing genotypes with improved performance. By assigning economic weights to different traits, genotypes with differing performance it will be possible to predict objectively how they contribute to profitability. In this paper, the derivation of economic weights for different traits in Macadamia is described. A financial model of a large-scale commercial macadamia orchard typical of those in Northern New South Wales was developed. Important parameters for the model including yields, prices, farm costs and various management options, were determined in consultation with industry representatives. Discounted cash flow analysis was used with a 20-year planning horizon. Economic weights for different traits were then determined by observing the change in the Net Present Value of the income stream generated by the model as a result of independently increasing the level of each trait by one unit. The use of economic weights in a breeding program will be illustrated with a simple example.