Thse are the slides of the presentation entitled Economics of production diseases, I gave at the World Buiatrics Conference 2012, Lisbon, Portugal

1. The costs of production diseases
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. In the old days ....
 Things were different (better?)
 Authority
 Fixed prices
 Hardly any competition
 You did what you liked

4. Currently
 Competition
● Between vets
● From others
 Well educated farmers
 No fixed prices
 Agricultural prices under
under pressure (free markets)

5. Result ….
 Farmers management is more and more aimed at
optimization of health, not maximisation of health
 Vets function on equal level: discussion instead directive
 One additional argument: money
 So, vets need to know about economics of disease and
economics of management

6. Outline
 Production economics
 Cost factors of production diseases
 Production diseases
● Mastitis
● Claw health
● Metabolic disorders
 Final remarks

7. Farm production
Milk output (Q)
Farm with fixed land and
buildings (constraints):
Output is a function of
input
Resource input (R)

8. Effect of disease
-More resources for same production
-Less production with same resources
-optimal level of production changes as well
Milk output (Q)
I
Resource input (R)

9. 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

10. Outline
 Production economics
 Cost factors of production diseases
 Production diseases
● Mastitis
● Claw health
● Metabolic disorders
 Final remarks

11. 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

12. Introduction Optimization of expenditures
Losses
and losses
Expenditures

13. Disease treatments
 Treatment of clinical cases is an expenditure
● Used to optimize total losses
● Studies on optimal treatment are made
e.g. Steeneveld et al., 2011; 2007, Swinkels et al., 2005a; 2005b
 But in prevention, treatment is seen as part of costs of a
case (failure)
 Therefore we optimize Failure costs vs Preventive
measures

14. How to study economics of prevention?
 Start with costs of disease (failure costs)
● Losses
● Associated expenditures (treatments etc)
● Quite some information is known
 Calculate costs of prevention
● Investments
● Expdenditures
● Labour (value?)
● Relative straightforward work
 Estimate economic improvement
● Difference between old and new situation
● Difficult !!!

15. Introduction Benefits exceed costs
Failure
costs
Old situation
Benefits
New situation
Costs
Preventive measures

16. Introduction Costs exceed benefits
Failure
costs
Old situation
Benefits New situation
Costs
Preventive measures

17. Outline
 Production economics
 Cost factors of production diseases
 Production diseases
● Mastitis
● Claw health
● Metabolic disorders
 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
Level 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
Total 61 84 97 78

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. Theory vs practise (€/cow/year)
Farm specific
Default
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
Culling 22 17.9 0 46
Penalties 0 0.30 0 2.4
Labour 4 3.8 0 15
Total economic losses 81 78 31.4 153.8

21. Theory vs practise (€/cow/year)
Farm specific
Default
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
Culling 22 17.9 0 46
Penalties 0 0.30 0 2.4
Labour 4 3.8 0 15
Total economic losses 81 78 31.4 153.8

22. 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

23. 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

24. Total costs mastitis (€/cow)
5% 95%
percentile percentile
Average
Clinical mastitis 62 16 151
Subclinical mastitis 14 9 21
Failure costs mastitis 76 26 164
Prevention costs 88 43 131
Costs of masitits 164 99 281

25. Failure costs vs preventive costs

26. 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

27. 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

28. Outline
 Production economics
 Cost factors of production diseases
 Production diseases
● Mastitis
● Claw health
● Metabolic disorders
 Final remarks
Based on work of:
Bruijnis et al., 2010; 2012
Verhoef, 2012

29. A healthy claw

30. Different foot disorders
Sole haemorrhages
and
White line disease
Interdigital
dermatitis/
heel horn erosion
Interdigital hyperplasia
Digital dermatitis
Sole ulcer (corns, tyloma)
(Mortellaro’s disease)
Interdigital phlegmon

31. Simulation model
No foot disorder,
healthy (H)
PSH PHS PHC PCH
Subclinical foot PSC Clinical foot
disorder disorder
(S) (C)
PCU
L
Culled
(Cul)

32. Modelling assumptions
 Assumptions (Dutch circumstances):
● cubicle housing
● concrete floor
● pasturing
● two foot trimming interventions/year
 7 different foot disorders

33. Add consequences to simulation model
No foot disorder,
healthy (H)
PSH PHS PHC PCH
Subclinical foot PSC Clinical foot
disorder disorder
(S) (C)
PCU
L
Culled
Economic consequences: Economic consequences: (Cul)
- Milk production losses - Milk production losses
- Prolonged calving - Prolonged calving interval
interval - Labor dairy farmer
- Welfare impact: - Costs foot trimmer
- Estimated pain - Costs veterinarian Economic consequence:
- Treatment - RPO-value
- Discarded milk
- Welfare impact:
- Estimated pain

34. Economic effects
Total costs (default input, The Netherlands)
Per farm (65 cows) : €3,474 per year (€2,282 to €4,965)
Per cow : €53 per cow/year
 Costs of subclinical foot disorders: 32%
 Average clinical foot disorder: €67/case
 Average subclinical foot disorder: €13/case
 Digital dermatitis gave highest costs
(high incidence, high clinical prevalence)

35. Cost components
Visit of veterinarian
Treatment
Visit of foot trimmer
Discarded milk
Labour of the dairy
farmer
Milk production losses
Prolonged calving
interval
Culling

36. Differences between farms (€/cow/year)
Parameter Average min – max
Losses of decreased milk production 20 10.3 – 24.3
Clinical 14 8.0 – 19.1
Subclinical 6 2.3 – 12.4
Losses of discarded milk 0.3 0 – 1.7
Losses of prolonged calving interval 7 3.7 – 9.6
Clinical 5 2.7 – 6.3
Subclinical 3 1.0 – 4.0
Losses of advanced culled cows 8 0 – 27.8
Cost of treatment 9 1.0 – 18.2
Total costs 45 23.1– 60.4

37. Differences between farms (€/cow/year)
Parameter Average min – max
Losses of decreased milk production 20 10.3 – 24.3
Clinical 14 8.0 – 19.1
Subclinical 6 2.3 – 12.4
Losses of discarded milk 0.3 0 – 1.7
Losses of prolonged calving interval 7 3.7 – 9.6
Clinical 5 2.7 – 6.3
Subclinical 3 1.0 – 4.0
Losses of advanced culled cows 8 0 – 27.8
Cost of treatment 9 1.0 – 18.2
Total costs 45 23.1– 60.4

38. Preventive measures
 Measures:
● Additional foot trimming
● Feeding management
● Feed supplements
● Floor hygiene (scraper, robot, manual)
● Foot bath
● Improved lying surface of cubicles (straw,
mattrass)
● Rubber flooring
● Reduce overstocking
 Effects based on scientific literature (if available) and
expertise

39. Costs and benefits
Costs Benefits1 Net costs
Intervention measure (€/cow/yr) (€/cow/yr) (€/cow/yr)
Additional foot trimming 7 8 -1
Feeding management 34 5 29
Feeding supplement 20 3 17
Floor hygiene, manure scraper 25 12 14
Floor hygiene, manure robot 39 12 27
Floor hygiene, manual 56 12 45
Foot bath 34 3 31
Lying surface, bedding 19 19 -1
Lying surface, mattress 13 19 -7
Rubber flooring 28 11 17
Stocking density 16 17 0

40. Net costs vs welfare
6
5
Lymat
4 Lybed
Welfare benefit
Stdens
3 Rubfl
Hygrob
Hygscr Hygman
2
Ftrim
Feedman
1
Feedsup Fbath
0
-10 0 10 20 30 40 50
Net costs (€)

41. Outline
 Production economics
 Cost factors of production diseases
 Production diseases
● Mastitis
● Claw health
● Metabolic disorders
 Final remarks
Based on work of:
Woolderink et al., 2002

42. Background of study
 Stochastic model
 Herd level (65 dairy cows)
 Input based on literature

43. Cost of ketosis
Average: € 1778 per farm/year
Variation: € 1588 – 3506
78 16
6
120 Clinical: € 361 per case
Subclinical: € 73 per case
807
Milk production
Culling
751 Mastitis
Treatmet
LDA
Calving interval

44. Metabolic disorders
 No other estimates in scientific literature
 Other estimates are made
● Consultants
● Doubtful

45. Outline
 Production economics
 Cost factors of production diseases
 Production diseases
● Mastitis
● Claw health
● Metabolic disorders
 Final remarks

46. Only three production diseases
 What about
● Young stock raising
● Culling policy
● Reproductive management
● ……….

47. Under estimation of costs by farmers
200
180
160
140
Real costs (€/cow)
120
100
80
60
46 under
40 Mastitis
estimators!!!!!
20
0
0 20 40 60 80 100 120 140 160 180 200
Expected costs (€ per cow)

48. Youngstock raising (€ per heifer)
Our calculated costs: € 1.540 (Mohd Nor et al., 2012
Farmers estimates:
Total costs: € 1.559 (800 – 2.862)
Without labour € 1.121 (532 – 1.764)
Without labour and housing: € 879 (319 – 1.477)
Accuracy of farmers' estimation
€ 1.500,00
Difference between estimation
€ 1.000,00
and real costs (euros)
€ 500,00
€ 0,00
-€ 500,00
-€ 1.000,00
-€ 1.500,00
-€ 2.000,00

49. 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)

50. 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)

51. 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.bec.wur.nl -> research -> decision support tools

52. Thank you for your attention