Assessing the Economic Impact of Swine Disease - The Case of PRRS

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Assessing the Economic Impact of Swine Disease - The Case of PRRS - Dr. James Kliebenstein, Ph.D. Iowa State University, at the Boehringer Ingelheim Vetmedica, Inc. Swine Health Seminar, August 15, 2009, Carolina Beach, North Carolina, USA.

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Assessing the Economic Impact of Swine Disease - The Case of PRRS

  1. 1. Assessing the Economic Impact of Swine Disease - The Case of PRRS James Kliebenstein Agricultural Economist Iowa State University
  2. 2. Production Impacts  Death  Permanent Damage  Uncompensated Growth Interruption  Reduced Feed Efficiency
  3. 3. Production Impacts  Abortion  Reproductive Inefficiency  Decreased Animal Product Output  Increased Culling
  4. 4. Cost of Disease  Mortality  Value, expenses, and disposal  Morbidity  Production, efficiency, cash flow  Revenue loss  Lower weight & value, condemn
  5. 5. Cost of Disease  Prevention and/or treatment  Seedstock suppliers  Lost market  Reputation/goodwill  Industry impact  Export market, consumer confidence
  6. 6. Budgeting Economic Impact of Disease  Reduced Revenue  Reduced Costs  Increased Costs
  7. 7. Impact of Disease on Market Pig Growth A C Weight D B AS DS Age/days  As=Animal Sick  Ds=Days Sick  A=Normal growth  B=Compensating growth  C=Growth resumes but no compensating gain  D=Growth is impacted through days on feed.
  8. 8. Economics  Evaluating trade-offs  Prevention v. treatment  Marginal analysis  What is the value of additional intervention versus its cost  Optimal is when they are equal
  9. 9. Relationship of Treatment Level and Losses Control costs $ Losses A B C Treatment Level  A=Allow disease to go to higher level and then treat  B=Keep incidence at medium level  C=Keep incidence at low level-treat often
  10. 10. Issues in Disease Management Biosecurity  Economic Impact on the Herd/Operation  Impact on Management of Animal Flow or System  Need to have a focus on what the it causes as well as what causes it.
  11. 11. Issues in Disease Management Biosecurity  Cost of Prevention  Cost of Treatment  Prevention Effectiveness  Treatment Effectiveness  Probability of Getting Disease  Disease Contagiousness
  12. 12.  Can’t afford total prevention. It will bankrupt you.
  13. 13. Evaluating Trade-offs Cost to Treatment Effectiveness Farm High Low High Treat Prevent Low Treat/Ignore Prevent/Ignore
  14. 14. Evaluating Trade-offs Cost to Probability of Disease Farm High Low High Prevent Prevent/Treat Treat/Prevent Ignore Low
  15. 15. Evaluating Trade-offs Cost to Cost of Treatment Farm High Low High Prevent Treat/Prevent Prevent/Treat Treat/Ignore Low
  16. 16. Evaluating Trade-offs Variables Treatment Prevention Incidence More important for Import ant for high low incidence incidence Infections Less important Important Clinical Important Less important Sub-Clinical Less important Important Lead to other Less important Important disease Contact Important Less important Transfer Air Transfer Less important Important
  17. 17. Disease Management May be Key to Survival
  18. 18. Breeding-age Females Culled over a 12-month Period as a Percentage of Sow and Gilt Inventory Time Period Percent 1990 43.5 1995 41.2 2000 37.7 2006 48.8 Source: USDA, 2008, Part IV, “Swine 2006: Changes in the U.S. Pork Industry, 1990-2006. USDA-APHIS-US, CEAH, Ft. Collins, CO.
  19. 19. Percentage of Pigs That Died During Nursery Phase Time Period Percent 1990 2.4 1995 2.3 2000 2.6 2006 2.9 Source: USDA, 2008, Part IV, “Swine 2006: Changes in the U.S. Pork Industry, 1990-2006. USDA-APHIS-US, CEAH, Ft. Collins, CO.
  20. 20. Percentage of Grow/Finish Pigs that Died During Grow Finish Phase Time Period Percent 1990 1.8 1995 2.1 2000 2.9 2006 3.9 Source: USDA, 2008, Part IV, “Swine 2006: Changes in the U.S. Pork Industry, 1990-2006. USDA-APHIS-US, CEAH, Ft. Collins, CO.
  21. 21. Per Litter Productivity (Pigs per litter) Item Year 1990 1995 2000 2006 Stillbirth/mummies .87 .05 .81 1.04 Born Alive 9.47 9.37 9.94 10.80 Total Born 10.34 10.02 10.75 11.84 Preweaning Deaths 1.10 .88 1.17 1.42 Weaned 8.37 8.49 8.77 9.38 Source: USDA, 2008, Part IV, “Swine 2006: Changes in the U.S. Pork Industry, 1990-2006. USDA-APHIS-US, CEAH, Ft. Collins, CO.
  22. 22. Percent of Sites in Which PRRS was Diagnosed by a Veterinarian or Laboratory during Previous 12 Months Year Item 2000 2006 Breeding Herd 16.2 18.8 Nursery Pigs 11.6 21.5 Grow/Finish Pigs 10.3 23.4 Source: USDA, 2008, Park IV, “Swine 2006: changes in the U.S. Pork Industry, 1990-2006.” USDA-APHIS-US, CEAH, Ft. Collins, CO.
  23. 23. Percentage of Sites Which Usually Vaccinated for PRRS During 12 Months Prior to Survey Item Year 2000 2006 Breeding Females 37.1 27.3 Weaned Pigs 5.2 5.4 Source: USDA, 2008, Part IV, “Swine 2006: Changes in the U.S. Pork Industry, 1990-2006. USDA-APHIS-US, CEAH, Ft. Collins, CO.
  24. 24. Brief Summary of PRRS Study  Source of Information:  10 Case Study Farms  Range of Producer Types  National Animal Health Monitoring System PRRS Incidence
  25. 25. Study Cooperators  Eric J. Neumann, New Zealand  Colin D. Johnson, Iowa State Univ.  John W. Mabry, Iowa State Univ.  Jeffrey J. Zimmerman, Iowa State Univ.  Eric J. Bush, USDA Center for Natl Animal Health Surveillance  Ann H. Seitzinger, USDA Center for Natl Animal Health Surveillance  Alice L. Green, USDA Center for Natl Animal Health Surveillance
  26. 26. Case Study Population FARROWING Farm Number of Sows Number of Litters Affected A1 10,200 23,885 B1 1,400 1,185 C 4,000 2,240 D 475 1,434 E 2,800 1,837 F 1,000 432
  27. 27. Case Study Population NURSERY Farm Number of Groups Number of Groups Affected Unaffected A1 40 105 J 66 220
  28. 28. Case Study Population GROW-FINISH Farm Number of Groups Number of Groups Affected Unaffected A 38 109 G 2 12 H 12 8 I 27 21 J 546 356
  29. 29. Farrowing Productivity Differences – PRRS Outbreak Percent Change Pigs Weaned per sow Pigs Weaned per Sow per Farm Farrowing Rate Farrowed Year A-1 -11.11 -7.69 -14.44 A-2 -10.26 -6.21 -9.09 B-1 -2.35 -28.21 -26.24 B-2 -21.98 -32.55 -46.45 C -19.21 -25.58 -23.56 D-1 -8.41 -14.29 -21.43 D-2 -4.33 -6.82 -10.95 E -11.90 -10.11 -11.44 F -39.05 -13.58 -38.32 High -39.05 -32.55 -38.32 Low -2.35 -6.21 -9.09 Average -13.76 -16.43 -22.94
  30. 30. Farrowing Productivity Differences – PRRS Outbreak Absolute Difference Pigs Weaned per sow Pigs Weaned per Sow per Farm Farrowing Rate Farrowed Year A-1 -9.00 -0.70 -3.24 A-2 -8.00 -0.55 -1.95 B-1 -2.00 -2.95 -5.80 B-2 -20.00 -3.41 -11.20 C -13.40 -2.20 -4.50 D-1 -7.00 -1.30 -4.80 D-2 -3.60 -0.60 -2.30 E -9.00 -0.90 -2.30 F -26.20 -1.10 -6.40 High -26.20 -3.41 -11.20 Low -2.00 -0.55 -1.95 Average -10.92 -1.50 -4.72
  31. 31. Nursery and Grow-Finish Productivity Difference – PRRS Outbreak Percentage Difference Average Daily Feed Efficiency Mortality (%) Farm Gain NURSERY A-2 -28.00 11.73 1,041 J -22.58 11.64 246 Average -25.29 11.69 644 GROW-FINISH A-2 -10.06 7.45 189 G -39.02 37.11 408 H -12.26 1.72 187 I -1.96 5.71 44 J-1 -2.78 -1.45 59 J-2 -6.11 -5.09 109 Average -12.03 7.57 166
  32. 32. Nursery and Grow-Finish Productivity Difference – PRRS Outbreak Absolute Difference Average Daily Feed Efficiency Mortality (%) Farm Gain NURSERY A-2 -.21 0.19 17.91 J -.21 0.17 3.39 Average -.21 0.18 10.65 GROW-FINISH A-2 -.17 .21 11.10 G -.64 1.18 15.59 H -.19 .06 4.10 I -.03 .18 1.53 J-1 -.05 -.04 1.56 J-2 -.11 -.14 2.90 Average -.20 .24 6.05
  33. 33. Summary of Pig Production Efficiency Impacts of PRRS-Case Study Farms Negative Positive Group Group Difference Farrowing Rate (%) 79.36% 68.44% -10.92 Pigs weaned /litter (#) 9.13 7.63 -1.50 Litters/sow/yr (#) 2.29 2.09 -.20 Nursery mortality (%) 1.55 12.2 +10.65 Grow/finish mortality (%) 3.64 9.69 +6.05
  34. 34. Range in Economic Impact for Case Study Farms Item Lowest Impact Highest Impact Impact per litter – farrowing $27.61 $156.60 Impact per pig – nursery $3.35 $9.12 Impact per pig – grow/finish $0.21 $28.30
  35. 35. Economic Impact of PRRS Outbreak for Selected Feed Costs Item Corn ($/bu) 2.50 3.75 5.00 SBM ($/ton) 199 238 277 Farrowing Phase Reduced revenue per litter $45.00 $45.00 $45.00 Reduced farrowing rate 29.57 31.73 34.00 Economic impact per litter $74.57 $76.73 $79.00 Nursery Phase Increased mortality $3.58 $3.58 $3.58 Reduced feed efficiency 1.21 1.39 1.57 Reduced average daily gain 1.26 1.26 1.26 Economic impact per pig $6.05 $6.23 $6.41 Grow-Finish Phase Increased mortality $3.23 $3.23 $3.23 Reduced feed efficiency 3.24 4.24 5.25 Reduced average daily gain 1.44 1.44 1.44 Economic impact per pig $7.91 $8.91 $9.91
  36. 36. Annual Cost of PRRS to the United States Swine Industry for Selected Feed Costs Corn ($/bu) 2.50 3.75 5.00 Item SBM ($/ton) 199 238 277 Million Dollars Farrowing Losses Reduced pigs weaned $40.50 40.50 40.50 Reduced farrowing rate 26.61 28.56 30.1 Nursery Losses 231.17 238.05 244.93 Finisher Losses 295.91 333.32 370.73 TOTAL $594.19 640.43 686.77

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