This is the second invited presentation I gave in Bangkok at the 38th ICVS. It provides a number of examples of economic calculations to support veterinary decisions at various levels.
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
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
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
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?
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
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