Economics of production diseases, WBS2012, Lisbon
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Economics of production diseases, WBS2012, Lisbon

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

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

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  • 1. The costs of production diseasesHenk 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 expendituresLosses 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 costsFailurecosts Old situation Benefits New situation Costs Preventive measures
  • 16. Introduction Costs exceed benefitsFailurecosts 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 2008Level Cow Cow Cow-year CowMilk production losses - 11 78 36Labour - 11 - 4Treatment - 14 - 15Culling - 46 - 22Death - 0 - 0Veterinarian - 2 - 1Milk quality - 0 - 0Materials - 0 - 0Diagnostics - 0 - 0Total 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 HighProduction losses subclinical 16 36 6.8 72.4Production losses clinical 23 10 2.5 22Veterinarian (€/cow/year) 0.3 0.6 0 2.5Drugs 6 10.6 3.5 26.7Discarded milk 9 7.9 2.5 17.9Culling 22 17.9 0 46Penalties 0 0.30 0 2.4Labour 4 3.8 0 15Total economic losses 81 78 31.4 153.8
  • 21. Theory vs practise (€/cow/year) Farm specific Default Mean Low HighProduction losses subclinical 16 36 6.8 72.4Production losses clinical 23 10 2.5 22Veterinarian (€/cow/year) 0.3 0.6 0 2.5Drugs 6 10.6 3.5 26.7Discarded milk 9 7.9 2.5 17.9Culling 22 17.9 0 46Penalties 0 0.30 0 2.4Labour 4 3.8 0 15Total 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 AverageClinical mastitis 62 16 151Subclinical mastitis 14 9 21Failure costs mastitis 76 26 164Prevention costs 88 43 131Costs 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 benefitMilk cows with clinical mastitis last 37 16 -21Milk cows with subclinical mastitis last 104 20 -84Use of separate cloths during udder preparation 26 9 -17Wash dirty udders during udder preparation 3 9 6Prestripping 34 9 -25Use of milkers’ gloves during milking 1 9 8Post milking teat disinfection 31 31 -0Back-flushing clusters after milking a cow with clinicalmastitis 1 11 10Back-flushing clusters after milking a cow with subclinicalmastitis 123 15 -108Replace teat cup liners in time 13 11 -2Use of a treatment protocol 7 15 8Application of blanket dry cow therapy 9 36 27Keep cows standing after milking 2 12 10Feed additional dry cow minerals 13 13 0Prevent overcrowding 23 13 -10Clean boxes 54 15 -39Clean yards 51 8 -43Optimize 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 dermatitisSole 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 effectsTotal 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 – maxLosses of decreased milk production 20 10.3 – 24.3 Clinical 14 8.0 – 19.1 Subclinical 6 2.3 – 12.4Losses of discarded milk 0.3 0 – 1.7Losses of prolonged calving interval 7 3.7 – 9.6 Clinical 5 2.7 – 6.3 Subclinical 3 1.0 – 4.0Losses of advanced culled cows 8 0 – 27.8Cost of treatment 9 1.0 – 18.2Total costs 45 23.1– 60.4
  • 37. Differences between farms (€/cow/year)Parameter Average min – maxLosses of decreased milk production 20 10.3 – 24.3 Clinical 14 8.0 – 19.1 Subclinical 6 2.3 – 12.4Losses of discarded milk 0.3 0 – 1.7Losses of prolonged calving interval 7 3.7 – 9.6 Clinical 5 2.7 – 6.3 Subclinical 3 1.0 – 4.0Losses of advanced culled cows 8 0 – 27.8Cost of treatment 9 1.0 – 18.2Total 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 costsIntervention measure (€/cow/yr) (€/cow/yr) (€/cow/yr)Additional foot trimming 7 8 -1Feeding management 34 5 29Feeding supplement 20 3 17Floor hygiene, manure scraper 25 12 14Floor hygiene, manure robot 39 12 27Floor hygiene, manual 56 12 45Foot bath 34 3 31Lying surface, bedding 19 19 -1Lying surface, mattress 13 19 -7Rubber flooring 28 11 17Stocking density 16 17 0
  • 40. Net costs vs welfare 6 5 Lymat 4 LybedWelfare 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