Every profitable life index (PLI) point is a £4.50 saving according to a new independent study measuring financial performance of dairy herds.

The difference in margin between an average genetic herd - PLI 14 - and a herd in top 1% - PLI 75 - has shown to be an average of £286 a cow a year and in a 100-cow herd a saving of £28,600 annually, says Promar consultant Tim Harper, who undertook the study.

"In arriving at a margin all identifiable income and costs that vary in herds of different genetic merits such as milk, calf and cull sales and the cost of all feed, herd replacements and AI and semen.

"Assuming there is no relationship between genetics and any other costs the margin will translate directly into pre-tax profit."

The study using independent genetic data from Dairyco breeding+ involved more than 20,000 Holsteins cows in herds averaging about 7500 litres.

It is not surprising the highest merit cows are the most profitable, says Marco Winters, DairyCo breeding director.

"Extra income generated by high PLI animals from milk sales for an individual cow is overwhelming and more than compensates for extra costs of keeping that cow.

"Good genetics is not the only factor determining profitability of these herds, but it clearly is an important factor."