2007 Annual Report 1a.Objectives (from AD-416) 1) Determine the effectiveness of using within-herd heritability estimates in genetic analyses;. 2)Estimate change in genetic parameters for yield and SCC across various herd sizes and herd production levels; and. 3)Investigate the use of random regression models to estimate maturity rate and change in production across lactations. 1b.Approach (from AD-416) The cooperator will obtain milk, fat and protein yield, somatic cell scores, herd average and herd size records from AIPL-USDA. Within-herd heritabilities will be estimated for several randomly selected herds using REML and compared to estimates using less computationally intensive methods, including daughter dam regression and paternal half-sib intra-class correlations. Breeding values will be generated assuming specific within herd heritabilities and compared to breeding values generated assuming a constant heritability across all herds and from random regression models with heritability varying across herd sizes and average yield. Estimated breeding values for specific herd sizes and production levels will be calculated to determine if significant re-ranking of bulls occurs across various herd parameters. Breeding values for maturity rate (or change in production across lactations) will be generated by estimating a level for each sire and a linear change across lactations. 3.Progress Report This report documents research conducted under a specific cooperative agreement between ARS and Pennsylvania State University (University Park, PA). Additional details of research can be found in the report for the parent project 1265-31000-085-00D, "Improving Genetic Prediction of Economic Merit of Dairy Animals". Research conducted under the agreement is related to objective 2 (improved accuracy of yield evaluations). Monitoring activities for the project included phone and e-mail exchanges between the Animal Improvement Programs Laboratory and the Cooperator during the data analysis and publication phases. The lead ARS and Cooperator researchers met in Baltimore, MD, in April 2007 and presented preliminary results to three committees of the National Association of Animal Breeders. The Council on Dairy Cattle Breeding also was informed of those results in April to allow review of how the information might be used by the industry and of how to alleviate herd-owner concerns about determining the value of information from individual herds for use in genetic evaluations. Individual-herd heritabilities for herds that participate in Dairy Herd Improvement recordkeeping programs were estimated. Relationships of individual-herd heritability with sire misidentification rate were investigated. Estimates of genetic parameters for milk yield, component (fat and protein) yields and percentages, and somatic cell score were compared for herds that had been stratified based on high, medium, or low individual-herd heritability for yield traits and somatic cell score. A poster presentation on the relationship of individual-herd heritability with sire misidentification was given at the annual meeting of the Federation of Animal Science Societies, and an abstract was prepared and published in the meeting proceedings. A scientific paper on the relationship between individual-herd heritability and sire misidentification and a scientific short communication on the relationship between individual-herd heritability and estimates of genetic parameters were prepared and submitted to the Journal of Dairy Science. A scientific manuscript on within-herd heritability estimated with daughter-parent regression for yield and somatic cell score was published in the Journal of Dairy Science.