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A 5 yr whole-system study, beginning in June 1994, compared the productivity of high [HGM; Australian Breeding Value (ABV) of 49.1 kg of fat plus protein] and low [LGM; ABV of 2.3 kg of fat plus protein] genetic merit cows. Cows from both groups were fed at 3 levels of concentrate (C): 0.34 (low C), 0.84 (medium C), and 1.71 (high C) t of DM/cow per lactation. Thus, there were 6 treatments (farmlets) composed of 18 cows each. The 30 blocks of pasture on each farmlet were matched between farmlets for pasture growth before the study (and soil characteristics and aspect). Cows were culled, and pasture and feed use were managed so as not to bias any one treatment. Genetic merit, level of feeding, and their interaction were significant effects for protein content, protein/cow, and milk and protein/ha. For fat and milk yield/cow, genetic merit and level of feeding were significant, whereas there was no significant effect of genetic merit on fat content. The difference of 46.8 kg of fat plus protein yield between the ABV of HGM and LGM cows and the actual difference in production between the 2 groups was not significantly different except for low C (27 kg) cows. This was due to a 3-fold lower protein yield difference (6 kg/cow) compared with an ABV difference for protein yield of 17.9 kg/cow. The dramatic effect of treatment on protein is in line with differences in the mean protein content (2.89% for the HGM - low C cows compared with a mean of 3.02% for the remaining groups) and mean body condition score [4.3 for HGM - low C cows compared with 4.8 for the mean of the remaining groups (scale 1 to 8)], both indicators reflecting a higher negative energy balance in the HGM - low C cows. When individual cow production was plotted against ABV for production of milk or protein yield all relationships were quadratic, but the slope was relatively flat (low response to ABV) for the low C cows, steeper for the medium C cows and steepest (but not linear) for the high C cows. The relationship between ABV for fat yield and actual fat yield was linear for all levels of concentrate. The mean milk yield/ha from pasture for the 6 farmlets over the 5 yr was 11,868 L, 11,417 L, or 7,761 L for the HGM cows fed at low C, medium C, or high C, respectively, and 10,579 L, 9,800 L, or 5,812 L for LGM cows, fed at low C, medium C, or high C, respectively. The response to concentrates fed was very high for the HGM - medium C cows at 0.115 kg fat plus protein or 1.75 L milk/kg of concentrate fed, with comparable figures of 0.083 kg and 1.0 L, 0.86 kg and 1.47 L and 0.066 and 0.92 L/kg of concentrate fed for the HGM - high C, LGM - medium C, and LGM - high C, respectively. The results show a significant genetic merit by environment (level of feeding) interaction for reproduction and most production parameters when considered in terms of the individual cow and the whole farm system.