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.

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