Economic indexes defined
An economic index is a collection of EPDs weighted by their economic value such that traits with greater impact on production goals have a larger economic weight associated with them. The basic equation of an economic index is:
I = EPD1x a1 + EPD2x a2 + EPD3x a3 ... EPDnx an
Where: I is the index value; EPDn is the EPD for trait n; and an is the economic weight associated with trait n.
The following includes some examples of currently available economic indexes. Angus, Hereford, Charolais, Gelbvieh, Limousin, Red Angus and Simmental all publish at least one economic index.
A full description of all available economic indexes can be found in the University of Nebraska NebGuide G1847 available online.
Weaned Calf Value ($W)
This Angus index is designed for producers who primarily sell calves at weaning and is interpreted in dollars per head of added profit. The $W index incorporates EPDs for birthweight, weaning weight, milk and mature cow size.
Cow Energy Value ($EN)
A component of $W, $EN is measured in dollars of savings per cow per year. It takes into account energy requirements due to mature size and milking ability. As both mature size and milking ability increase, additional protein and energy are required.
Females with a high genetic potential for milk production require additional nutrients even when they are not in production due to the increased size of their visceral organs.
Example:
Bull A +10 $EN;
Bull B +5 $EN
The daughters of Bull A should require less energy (feed costs) due to lactation energy requirements and differences in mature size. In this example, daughters from Bull A would save $5 per head per year on average compared to those of Bull B.
In order to help improve production traits while avoiding high-maintenance females, it can be particularly useful to select animals from within an acceptable window for $EN. This is especially beneficial in limited feed and high-stress environments.
Beef Value ($B)
The Angus index $B includes EPDs for yearling weight, carcass weight and carcass traits. Producers wishing to enhance growth and simultaneously select for quality and yield grade should use this index. It is a terminal index, and caution should be used if replacement females are retained to avoid increasing mature female weights.
Example:
Bull A +65.60 $B;
Bull B +52.50 $B
We would expect calves from Bull A would be worth $13.10 per head more than those from Bull B if retained through a feedlot and sold on a Certified Angus Beef (CAB) grid.
Baldy Maternal Index ($BMI)
The Hereford index, $BMI, is designed to select bulls for use on Angus cross cows and heifers where some replacements are kept and other offspring are sold on a grid-based system. These cattle could potentially qualify for either Certified Hereford Beef (CHB) or CAB.
Both calving ease and fertility, as measured by scrotal circumference, are emphasized. Weaning weight is weighted positively, while yearling weight is weighted slightly negatively in an attempt to promote pre-weaning gain but minimize mature cow size.
Marbling is emphasized more than ribeye area in order to enhance quality grade while maintaining an acceptable yield grade of 3 or lower.
All-Purpose Index (API)
The API Simmental index assumes the sire will be used on both cows and heifers, and heifers will be retained as replacements while other offspring are sold based on grade and yield. This index is targeted at a producer looking to optimize revenue from fed cattle and maternal characteristics of replacement heifers.
Example:
Bull A +138 API;
Bull B +118 API
We would expect the calves from Bull A would be worth $20 per head more than those from Bull B. Over a span of four years, Bull A could generate $2,400 more revenue than Bull B if mated to 30 females per year.
Choosing an index to use
When making selection decisions based on economic indexes, it’s important to consider your particular breeding objectives and the traits that will achieve desired production goals.
If your production goals include retaining replacements and selling cull heifers and steer progeny at weaning, an index assuming offspring are sold on a grid-based system is inappropriate for your operation.
If a large component of an index is yearling weight and your goal is to moderate the mature size of replacement females, then using a growth-oriented index would be counterproductive. As with any selection or breeding decision, your particular production environment will dictate what production goals are feasible.
Accuracies of the EPD traits that are components of indexes are important in determining how reliable an index value is. If an Angus sire has relatively high accuracies for growth EPDs, weaning weight and yearling weight but relatively low accuracies for carcass traits, which are heavily weighted in the $B index, the index may be less reliable due to the heavy influence of carcass traits.
It is also important to know the breed averages for particular indexes and to use percentile ranks to determine how far above or below average a particular animal is compared to the rest of a breed. 
Reprinted with permission from Genex Cooperative, Inc.
Matt Spangler
Associate Professor and Beef Genetics Extension Specialist
University of Nebraska – Lincoln
