Economic side of veterinary work: practical applications
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The document discusses the economic impacts of veterinary work, specifically focusing on animal diseases and their financial consequences at different levels, including cow, herd, and country levels. It highlights the use of modeling for estimating the economic effects of diseases such as mastitis, PRRS, and foot and mouth disease, incorporating data on animal health and production losses. The final remarks emphasize the importance of understanding the true costs of animal diseases and the need for farmers to consider both prevention and management strategies.
Economic side of veterinary work: practical applications
- 1. Economic side of veterinary work 2. Practical applications
- 2. What to expect? Approach to economic calculations The cow level: reproduction The herd level: mastitis The herd level: PRRSV Country level: foot and mouth disease Human health: BSE Final remarks
- 3. Remember …. animal diseases cost money 10 % of the gross production volume ~ 40-50 % of the net income (Dijkhuizen, 1990) £ 180/cow/year ~ 20 % of the average gross margin (Esslemont and Kossaibati, 1995)
- 4. How to study animal disease? Changes in output of farm, given farm structure, input and diseases Necessary data: ● Economics and disease data ● Not available Attempts unto sofar ● Low precision in diseases (e.g., Rougoor et al., 1997) ● Low number of farms (e.g., Rougoor et al., 1999)
- 5. Modelling to estimate effects of diseases and disease control Simulation model Input data based on data, literature, expertise Relatively cheap Pragmatic approach Bio-economic modelling: economics combined with detailed physiological basis
- 6. Models ……. do not capture the complexity of the real situation
- 7. Models……. are sometimes nicer than reality (too good to be true)
- 8. Some terminology Static vs dynamic ● behaviour over time Deterministic vs stochastic ● definite predictions or averages (deterministic) ● output is probability distributions (stochastic) ● variability of the system uncertainty of knowledge Spatial ● Space effects play a role Optimization vs simulation ● optimum solution, given an objective ● outcome given a pre-defined set of input
- 9. What to expect? Approach to economic calculations The cow level: reproduction The herd level: mastitis The herd level PRRSV Country level: foot and mouth disease Human health: BSE Final remarks
- 10. Two decisions around reproduction When do I start with inseminations When do I stop with insemination
- 11. 11 Difficult calculation Cow factors ● First ovulation ● Probability of detection ● Probability of conception ● Milk production level ● Reproductive disorders Economical factors A complex system of ● Milk price dynamics and ● Costs of insemination interactions ● Costs of culling ● Costs of calving management
- 12. Model Monte Carlo stochastic simulation Interactions and dynamics at cow level Time steps of 1 week Different VWP (6-15 wks) for the same cow Input for Dutch situation (Inchaisri et al., 2010) ● Literature ● Expertise
- 13. Stochastic dynamic modelling Cow • Breed • Parity • Month of calving • Milk production • Farm level • Relative performance • Persistence START OF CYCLE
- 14. 14 cow Probabilities no based on cow Ovulation yes factors no Oestrus detected yes no Insemination yes no Conception yes Calf
- 15. 15 Average results Voluntary waiting periods 6 wk 7 wk 9 wk 11 wk 13 wk 15 wk First insemination 10.9 11.5 13.1 14.8 16.8 18.5 Calving interval 391 393 401 410 421 433 MP/cow/year (kg) 8200 8188 8157 8112 8056 7997 Insemations 1.89 1.86 1.78 1.74 1.70 1.69 Calves/cow/year 0.93 0.93 0.91 0.89 0.87 0.84 Not pregnant (%) 0.018 0.019 0.021 0.025 0.030 0.037
- 16. Economic consequences (€/cow/year) Voluntary waiting periods 7 wks 9 wks 11 wks 13 wks 15 wks Milk 2.2 8.9 18.3 32.4 46.4 production Calves 0.1 0.3 0.6 1.0 1.7 Culling 0.4 1.6 3.4 6.3 10.1 Inseminations -0.5 -1.6 -2.0 -2.8 -3.1 Calf -0.1 -0.5 -1.0 -1.8 -2.9 Management Net total 2.1 8.6 19.0 34.2 52.2 (-16-22) (-11-32) (-6-53) (4-78) (13-106) 16
- 17. Average 60 50 Net losses (€/cow/year) 40 30 20 10 0 6 7 8 9 10 11 12 13 14 15 VWP (weeks)
- 18. 18 But 6 weeks not always optimal 40 35 30 Percentage cows 25 20 15 10 5 0 6 7 8 9 10 11 12 13 14 15 Optimal VWP (wks)
- 19. 19 Longer VWP when …. Cow factors Economical factors ● Parity = 1 ● Lower costs low milk ● Not Holstein Frisian production ● High persistence ● High costs of inseminations ● Low production ● High costs culling ● Late peak in production ● Calved in winter ● Bad oestrus detection ● Late first ovulation ● Reproduction diseases
- 20. What to expect? Approach to economic calculations The cow level: reproduction The herd level: mastitis The herd level: PRRSV Country level: foot and mouth disease Human health: BSE Final remarks
- 21. Costs of mastitis Mastitis is a costly disease Estimiations between € 55 – 97 per cow per year ● The Netherlands: €78/cow/year (Huijps et al.,2008) ● USA: €61/cow/year (Bar et al., 2008) ● Sweden: €97/cow/year (Hagnestam- Nielsen and Østergaard, (2009) ● The Netherlands: €84/cow/year (Halasa et al., 2009) ● Sweden: €55/cow/year (Nielsen et al., 2010)
- 22. Total costs of disease These costs are only half of the story Definition of costs of an animal disease (McInerny et al., 1992): Costs = Losses + Expenditures ●Loss : Benefit taken away (our estimations) ●Expenditures : Extra input into livestock production (preventive measures)
- 23. Remember this one? High losses, low control expenditures Failure costs (€) Optimal Low losses, high control expenditures Preventive costs (€)
- 24. Material Questionaire dataset of 189 farms (Santman-Berends et al., 2011) ● General questions ● Livestock management ● Lactating cows ● Milking process ● Feed Pathogen dataset of 120 farms ● Pathogens present on individual farms Milk recording services dataset of 120 fairy farms ● Testday records (e.g. milk production, SCC)
- 26. Costs of prevention When present the following were calculated according to Huijps et al. (2010): ● Cleaning cubicles ● Cleaning lanes ● Drying off ● Pre-stripping ● Clean dirty udders ● Milker gloves ● Clean cluster after clinical case ● Milk high SCC cow last ● Post milking teat disinfection ● Fixing cows after milking
- 27. Estimated costs (€/cow/year) for mastitis Average 5% 95% percentile percentile Clinical mastitis 62 16 151 Subclinical mastitis 14 9 21 Failure costs 76 26 164 mastitis Prevention costs 88 43 131 Costs of mastitis 164 99 281
- 28. Failure costs vs preventive costs
- 29. Cost-effectiveness of preventive measures -18 management measures (Huijps et al., 2010) -Quantify effect -436 scientific papers (1996-2006) -43 relevant and useful - Expert sessions -Effect 100 % contagious -Effect 100 % environmental -Efffect on BMSCC -Efffect on clinical mastitis
- 30. Additional Reduced expenditures losses Net benefit Milk cows with clinical mastitis last 37 16 -21 Milk cows with subclinical mastitis last 104 20 -84 Use of separate cloths during udder preparation 26 9 -17 Wash dirty udders during udder preparation 3 9 6 Prestripping 34 9 -25 Use of milkers’ gloves during milking 1 9 8 Post milking teat disinfection 31 31 -0 Back-flushing clusters after milking a cow with clinical mastitis 1 11 10 Back-flushing clusters after milking a cow with subclinical mastitis 123 15 -108 Replace teat cup liners in time 13 11 -2 Use of a treatment protocol 7 15 8 Application of blanket dry cow therapy 9 36 27 Keep cows standing after milking 2 12 10 Feed additional dry cow minerals 13 13 0 Prevent overcrowding 23 13 -10 Clean boxes 54 15 -39 Clean yards 51 8 -43 Optimize feed ration
- 31. What to expect? Approach to economic calculations The cow level: reproduction The herd level: mastitis The herd level: PRRSV Country level: foot and mouth disease Human health: BSE Final remarks
- 32. Economic effects of PRRS • Decrease in litter size • Decline in average daily gain and feed efficiency • Reproductive losses • Increase of mortality • Increase in healthcare costs Costs of outbreaks: • Cost of outbreaks USA: € 255/sow (Holck and Polson, 2003) • Cost initial outbreaks NL: € 98/sow (Brouwer, 1994) • Mean loss per sow NL: €126/sow (€59 - €379) (Nieuwenhuis et al, 2012) Costs of endemic infection less clear
- 33. Methods • Two strategies: – Depopulation – repopulation – Herd closure with off-site rearing of weaned piglets • PRRS elimination reached after 4, 8 and 12 months. – Compared with old situation (endemic PRRSV) • Input parameters: – Farm production parameter-estimates derived from 900 Dutch sow farms (Topigs 2009) or aggregated production (deterministic) figures (Agrovision B.V., 2010) of 2009 – Additional parameters (stochastic and deterministic) derived from literature or experts: LEI & KWIN • Stochastic simulation model • Commercial production farm with 436 sows
- 34. Results Depop-repop, equal piglet price: Breakeven in 11.8 yrs Depop-repop, higher piglet price: Breakeven in 2.2 yrs Herd closure with elimination: Breakeven < 1 yr 1.5 2 P robability 1 .5 0 0 5 10 15 20 Years till breakeven 20% increase pigletprice no increase pigletprice
- 35. What to expect? Approach to economic calculations The cow level: reproduction The herd level: mastitis The herd level: PRRSV Country level: foot and mouth disease Human health: BSE Final remarks
- 36. Foot and mouth disease EU is free of FMD What do with outbreak? EU regulations Additional measurements Problem is: ● Stochastic ● Dynamic ● Spatial
- 37. Inter-FMD: a simulation model Monte Carlo simulation ● 100 replications to obtain insight in variation of outcomes Examples of output parameters ● number of infected farms ● duration of epidemic ● number of farms slaughtered, vaccinated, in MCZ,… ● number of animals slaughtered, vaccinated, in MCZ,… ● etc…… Output = Input economic model
- 38. What to expect….. • of an outbreak on a dairy farm surrounded by •240 farms in a radius of 10 km (A) •1923 farms in a radius of 10 km (B) • using only EU measures?
- 39. EU control measures Sparse (A) Dense(B) 50% 95% 50% 95% # infected farms 3 38 1583 3621 # prev. culled farms 8 49 679 1053 # farms in MCZ (10km) 335 4,406 12,895 58,165 Length epidemic (days) 38 105 375 end
- 40. Other measures (dense) EU Prev-1 Vacc-2 Vacc-4 Farms rendered 2.262 281 76 74 vaccinated 0 0 593 1.184 MC 12.895 3.447 3.318 3.334 Animals culled 569.476 65.066 16.230 15.718 vaccinated 0 0 151.089 270.080 Length (days) 375 60 62 57
- 41. Adding economics (* mln €) EU Prev-1 Vacc-2 Vacc-4 live cull live cull Control >4.620 421 94 174 80 235 Consequential > 2.540 200 166 121 171 111 Marketdamage > 499 511 623 467 636 477 Total >7.659 1.132 883 762 886 824
- 42. What to expect? Approach to economic calculations The cow level: reproduction The herd level: mastitis The herd level: PRRSV Country level: foot and mouth disease Human health: BSE Final remarks
- 43. BSE 1986 first described 1996 -> link with Creutzveldt Jacobs Disease (vCJD) Since August 1989 measures against BSE in the Netherlands ● Since 1990 feed ban (no animal protein) ● Since 2000 dead cattle older than 30 m tested ● Since 2001 slaughtered cattle older than 30 m tested ● Disposal of BSE risk materials ● Culling of cohort of detected animal Incidence of BSE is decreasing ● 39 suspected cases in 2002 ● 7 suspected cases in 2005
- 44. Model Stochastic 3 types of BSE ● Clinically affected ● Test detectable ● Non detectable (3 for every detectable) Per BSE type of BSE load (from different organs) of the food supply was calculated Based on Infectious doses, risk of vCJD Prevented case of vCJD -> life years saved (most like 51)
- 45. Costs Removal of specific risk material (~60 kg): €/kg slaughtered weight Transport of specific risk material Post mortem testing: € 90 per head Costs of cohort culling
- 46. Results - retrospective Year 2002 2005 Number of BSE cases (total, at slaughter) 24, 12 3, 2 BSE load of the food supply Mean 5th – 95th Mean 5th – 95th. Baseline scenario 34,857 30,213-39,602 5,502 3,592-7,620 SRM removal 2,330 2,020-2,648 368 240-509 Post-mortem testing (PMT) 7,455 4,846-10,306 939 198-2,091 PMT and cohort culling 7,059 4,505-9,865 939 197-2088 SRM removal and PMT 498 324-689 63 13-140 SRM removal and PMT and cohort culling 472 301-659 63 13-139 Food risk (life years lost) Mean 5th – 95tb Mean 5th – 95th pct. Baseline scenario 16.98 8.66-26.70 2.69 1.25-4.61 SRM removal 1.14 0.58-1.79 0.18 0.08-0.31 Post-mortem testing (PMT) 3.63 1.67-6.27 0.46 0.08-1.11 PMT and cohort culling 3.44 1.56-5.94 0.46 0.08-1.11 SRM removal and PMT 0.24 0.11-0.42 0.03 0.005-0.07 SRM removal and PMT and cohort culling 0.23 0.10-0.40 0.03 0.005-0.07
- 47. Costs (mln €) 2002 2003 2004 2005 Year SRM removal 19.22 18.27 19.29 19.82 Post-mortem testing 38.16 29.56 26.57 21.12 Cohort culling 6.97 4.80 3.41 2.43 Total costs 64.34 52.64 49.27 43.37
- 50. What to expect? Approach to economic calculations The cow level: reproduction The herd level: mastitis The herd level: PRRSV Country level: foot and mouth disease Human health: BSE Final remarks
- 51. Key messages from examples Inseminations ● Start early Mastitis ● Be careful with additional prevention ● Work farm-specific PRRSV ● Eradication iscost-effective Foot and mouth disease ● Have a good look at eradication programs Zoönoses ● Look at costs vs utility
- 52. Farmers underestimate costs of disease 200 180 160 140 Real costs (€/cow) 120 100 80 60 40 46 under estimators 20 0 0 20 40 60 80 100 120 140 160 180 200 Expected costs (€ per cow) Huijps et al.,
- 53. There is more than economics Money is only one motivator for a farmer
- 54. Thank you for your attention On-line courses on @henkhogeveen Veterinary Economics on: animal-health-management.blogspot.com www.elevatehealth.eu