2006 Annual Report 4d.Progress report. This report serves to document research conducted under a memorandum of understanding (MOU) between ARS and the Council on Dairy Cattle Breeding (Reynoldsburg, OH). This MOU replaced MOU 58-1265-OM-004 "National Dairy Genetic Evaluation Program," which reached its 5-year limitation on December 31, 2004. 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 all of the objectives reported in the parent project. The short-term MOU, which was originally scheduled to terminate in 2005, was developed into a long-term MOU and extended for 4 years. The long-term MOU objectives are. 1)to maintain a high standard of integrity in data collection systems that provide data for the National Dairy Genetic Evaluation Program;. 2)to provide data to the Animal Improvement Programs Laboratory for use in research and education, including development of effective procedures for estimating the genetic merit of dairy animals;. 3)to provide data and information summaries to research and Extension personnel as well as others for educational purposes as appropriate;. 4)to improve genetic merit and production efficiency of U.S. dairy cattle; and. 5)to enhance world market competitiveness of the U.S. dairy industry.