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Economics of animal diseases

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These are the slides of a presentation I was invited to give at the Cattle Association of Veterinary Ireland (CAVI) at their annual conference, held in Galway, Ireland. The presentation deals with …

These are the slides of a presentation I was invited to give at the Cattle Association of Veterinary Ireland (CAVI) at their annual conference, held in Galway, Ireland. The presentation deals with economics of production diseases.

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  • 1. Economics of disease Henk Hogeveen
  • 2. Who am I  Farm boy (dairy farm, 45 cows)  Animal science at Wageningen Univesity ● Epidemiology (simulation model of management around cystic ovaries) ● Economics (long term effect of herd health management programs)  PhD at Vet Medicine (AI programs to diagnose mastitis)  Working in field of animal health management In between Wageningen University and Faculty of Vet. Med. ● @henkhogeveen ● animal-health-management.blogspot.com
  • 3. Current trends  Farmers management is more and more aimed at optimization of health, not maximization of health  Vets function on equal level: discussion instead directive  One additional argument: money  ….. vets need to know about economics of disease and economics of management
  • 4. Outline  Economics of disease  Production diseases ● Mastitis ● Reproduction  Final remarks
  • 5. Milk output (Q) Farm production Farm with fixed land and buildings (constraints): Output is a function of input Resource input (R)
  • 6. Effect of disease -More resources for same production -Less production with same resources Milk output (Q) -optimal level of production changes as well I Resource input (R)
  • 7. What’s the point?  Production function differ from farm to farm, dependent on: ● Management skills ● Farm seize ● Intensity ● …..  And …. ● Effects of disease differ from farm to farm ● Effects of disease differ based on prices
  • 8. Economic effects of diseases  Economic effects = losses + expenditures  Losses (decrease in production) ● Decreased production level ● Discarded milk ● Changes in milk price (milk quality) ● Culling  Expenditures (additional resources) ● Drugs ● Veterinarian ● Labour ● Preventive measures
  • 9. Introduction Losses Optimization of expenditures and losses Expenditures
  • 10. Disease treatments  Treatment of clinical cases is an expenditure ● Used to optimize total losses ● Studies on optimal treatment are available e.g. Steeneveld et al., 2011; 2007, Swinkels et al., 2005a; 2005b  But for prevention, treatment is seen as part of costs of a case (failure)  Therefore we optimize Failure costs vs Preventive measures
  • 11. How to study economics of prevention?  Start with failure costs of disease ● Losses ● Associated expenditures (treatments etc) ● Quite some information is known  Calculate costs of prevention ● Investments (depreciation & intrest) ● Expdenditures ● Labour (value?) ● Relative straightforward work  Estimate economic improvement ● Difference between old and new situation ● Difficult !!!
  • 12. Introduction Benefits exceed costs Failure costs Old situation Benefits New situation Costs Preventive measures
  • 13. Introduction Costs exceed benefits Failure costs Old situation Benefits New situation Costs Preventive measures
  • 14. 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
  • 15. Models ……. do not capture the complexity of the real situation
  • 16. Models……. are sometimes too good to be true
  • 17. Outline  Production economics  Production diseases ● Mastitis ● Reproduction  Final remarks Based on work of: Huijps et al., 2008, 2010 Hogeveen et al., 2010 van Soest et al., 2011
  • 18. Recent literature (€) Bar Halasa Hagnestam-Nielsen Huijps 2008 2009 2009 2008 Cow Cow Cow-year Cow Milk production losses - 11 78 36 Labour - 11 - 4 Treatment - 14 - 15 Culling - 46 - 22 Death - 0 - 0 Veterinarian - 2 - 1 Milk quality - 0 - 0 Materials - 0 - 0 Diagnostics - 0 - 0 61 84 97 78 Level Total
  • 19. Research  Default cost calculations ● Based on literature and expertise ● Clinical mastitis: Yearly incidence ● Subclinical mastitis: Bulk milk somatic cell count ● Conservative estimations  Data collection ● 64 dairy farms ● Data entry at “open farm days” ● Assistance from researcher
  • 20. Irish data (geary et al., 2013)
  • 21. Theory vs practise (€/cow/year) Default Farm specific Mean Low High Production losses subclinical 16 36 6.8 72.4 Production losses clinical 23 10 2.5 22 Veterinarian (€/cow/year) 0.3 0.6 0 2.5 Drugs 6 10.6 3.5 26.7 Discarded milk 9 7.9 2.5 17.9 22 17.9 0 46 Penalties 0 0.30 0 2.4 Labour 4 3.8 0 15 81 78 31.4 153.8 Culling Total economic losses
  • 22. Theory vs practise (€/cow/year) Default Farm specific Mean Low High Production losses subclinical 16 36 6.8 72.4 Production losses clinical 23 10 2.5 22 Veterinarian (€/cow/year) 0.3 0.6 0 2.5 Drugs 6 10.6 3.5 26.7 Discarded milk 9 7.9 2.5 17.9 22 17.9 0 46 Penalties 0 0.30 0 2.4 Labour 4 3.8 0 15 81 78 31.4 153.8 Culling Total economic losses
  • 23. Total costs of mastitis  Failure costs + expenditures preventive measures  Questionaire dataset of 189 farms (Santman-Berends et al., 2011) ● General questions ● Livestock management ● Lactating cows ● Milking process ● Feed  Pathogens and clinical mastitis on 120 farms  MPR data  Calculations of failure costs clinical mastitis, subclinical mastitis
  • 24. Preventive measures  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
  • 25. Total costs mastitis (€/cow) Average 5% percentile 95% percentile Clinical mastitis 62 16 151 Subclinical mastitis 14 9 21 Failure costs mastitis 76 26 164 Prevention costs 88 43 131 164 99 281 Costs of masitits
  • 26. Failure costs vs preventive costs
  • 27. 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
  • 28. Additional Reduced expenditures losses Net benefit 37 16 -21 104 20 -84 26 9 -17 3 9 6 34 9 -25 1 9 8 31 31 -0 1 11 10 123 15 -108 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 Milk cows with clinical mastitis last Milk cows with subclinical mastitis last Use of separate cloths during udder preparation Wash dirty udders during udder preparation Prestripping Use of milkers’ gloves during milking Post milking teat disinfection Back-flushing clusters after milking a cow with clinical mastitis Back-flushing clusters after milking a cow with subclinical mastitis Replace teat cup liners in time Optimize feed ration
  • 29. Outline  Production economics  Cost factors of production diseases  Production “diseases” ● Mastitis ● Reproduction  Final remarks Based on work of: Inchaisri et al., 2010, 2011, 2012
  • 30. Two decisions around reproduction  When do I start with inseminations  When do I stop with insemination
  • 31. Difficult calculation Cow factors ● First ovulation ● Probability of detection ● Probability of conception ● Milk production level ● Reproductive disorders Economical factors ● Milk price ● Costs of insemination ● Costs of culling ● Costs of calving management A complex system of dynamics and interactions 31
  • 32. Stochastic dynamic modelling Cow • Breed • Parity • Month of calving • Milk production • Farm level • Relative performance • Persistence START OF CYCLE
  • 33. 33 cow no Ovulation yes no Probabilities based on cow factors Oestrus detected yes no Insemination yes no Conception yes Calf
  • 34. 34 Average results Voluntary waiting periods 6 wk First insemination Calving interval MP/cow/year (kg) Insemations Calves/cow/year Not pregnant (%) 7 wk 9 wk 11 wk 13 wk 15 wk 10.9 11.5 13.1 14.8 16.8 18.5 391 393 401 410 421 433 8200 8188 8157 8112 8056 7997 1.89 1.86 1.78 1.74 1.70 1.69 0.93 0.93 0.91 0.89 0.87 0.84 0.018 0.019 0.021 0.025 0.030 0.037
  • 35. Average Net losses (€/cow/year) 60 50 40 30 20 10 0 6 7 8 9 10 11 12 VWP (weeks) 13 14 15
  • 36. Economic consequences (€/cow/year) Voluntary waiting periods 7 wks 9 wks 11 wks 13 wks 15 wks Milk production Calves 2.2 8.9 18.3 32.4 46.4 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 Management -0.1 -0.5 -1.0 -1.8 -2.9 2.1 (-16-22) 8.6 (-11-32) 19.0 (-6-53) 34.2 (4-78) 52.2 (13-106) Net total 36
  • 37. 37 Percentage cows But 6 weeks not always optimal 40 35 30 25 20 15 10 5 0 6 7 8 9 10 11 12 Optimal VWP (wks) 13 14 15
  • 38. Longer VWP when …. Cow factors 38 Economical factors ● Parity = 1 ● Lower costs low milk production ● Not Holstein Frisian ● High costs of ● High persistence inseminations ● Low production ● High costs culling ● Late peak in production ● Calved in winter ● Bad oestrus detection ● Late first ovulation ● Reproduction diseases
  • 39. Outline  Production economics  Cost factors of production diseases  Production diseases ● Mastitis ● Metabolic disorders  Final remarks
  • 40. Only two production diseases  What about ● Young stock raising ● Culling policy ● Claw health ● Metabolic diseases ● ……….
  • 41. Under estimation of costs by farmers 200 180 Real costs (€/cow) 160 140 120 100 80 60 46 under Mastitis estimators!!!!! 40 20 0 0 20 40 60 80 100 120 Expected costs (€ per cow) 140 160 180 200
  • 42. Herd health programs  Herd health & management programs are aimed at improving herd situations  Knowledge of economics is then essential  Improvement of disease situation improves value of herd health programs (see work of Derks et al., 2012)
  • 43. There is more than economics  Attitude explains mastitis situation (Jansen et al., 2009)  Campaigns do have an influence (Jansen et al., 2010)  Cost factors are not regarded as being equal (Huijps et al, 2009)  Sometimes farmers behave irrational (Huijps et al., 2010)
  • 44. Economics to support decisions  Production diseases costs much money ● Most expensive cattle disease present ● Costs are often failure costs ● Total costs (including prevention) are much higher ● Differences and underestimation between farmers -> farm specific calculations  More than only money to motivate farmers  Decision support is weighing costs of prevention vs reduction of failure costs ● That is up to you, veterinarians!!! ● Tool on www.wageningenur.nl/bec -> research -> decision support tools
  • 45. Thank you for your attention @henkhogeveen animal-health-management.blogspot.com On-line courses on Veterinary Economics on: www.elevatehealth.eu

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