Heterogeneity of variance in Brazilian herd environments was studied using first-lactation 305-day mature equivalent (ME) milk and fat records of Holstein cows. Herds were divided into two categories, according to low or high herd-year phenotypic standard deviation for ME milk (HYSD). There were 330 sires with daughter records in both HYSD categories. Components of (co)variance, heritability, and genetic correlations for milk and fat yields were estimated using a sire model from bivariate analyses with a restricted maximum likelihood (REML) derivative-free algorithm. Sire and residual variances for milk yield in low HYSD herds were 79 and 57% of those obtained in high HYSD herd. For fat yield they were 67 and 60%, respectively. Heritabilities for milk and fat yields in low HYSD herds were larger (0.30 and 0.22) than in high HYSD herds (0.23 and 0.20). Genetic correlation between expression in low and high HYSD herds was 0.997 for milk yield and 0.985 for fat yield. Expected correlated response in low HYSD herds based on sires selected on half-sister information from high HYSD was 0.89 kg/kg for milk and 0.80 kg/kg for fat yield. Genetic evaluations in Brazil need to account for heterogeneity of variances to increase the accuracy of evaluations and the selection efficiency for milk and fat yields of Holstein cows. Selection response will be lower in low variance herds than in high variance herds because of reduced differences in daughter response and among breeding values of sires in low HYSD herds. Genetic investments in sire selection to improve production are more likely to be successful in high HYSD herds than in low HYSD Brazilian herds.
