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.

1. Assessing the Economic Impact of
Swine Disease -
The Case of PRRS
James Kliebenstein
Agricultural Economist
Iowa State University

2. Production Impacts
 Death
 Permanent Damage
 Uncompensated Growth
Interruption
 Reduced Feed Efficiency

3. Production Impacts
 Abortion
 Reproductive Inefficiency
 Decreased Animal Product Output
 Increased Culling

4. Cost of Disease
 Mortality
 Value, expenses, and disposal
 Morbidity
 Production, efficiency, cash flow
 Revenue loss
 Lower weight & value, condemn

5. Cost of Disease
 Prevention and/or treatment
 Seedstock suppliers
 Lost market
 Reputation/goodwill
 Industry impact
 Export market, consumer
confidence

6. Budgeting Economic
Impact of Disease
 Reduced Revenue
 Reduced Costs
 Increased Costs

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. 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. 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. 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. Issues in Disease
Management Biosecurity
 Cost of Prevention
 Cost of Treatment
 Prevention Effectiveness
 Treatment Effectiveness
 Probability of Getting Disease
 Disease Contagiousness

12.  Can’t afford total prevention.
It will bankrupt you.

13. Evaluating Trade-offs
Cost to Treatment Effectiveness
Farm High Low
High
Treat Prevent
Low Treat/Ignore Prevent/Ignore

14. Evaluating Trade-offs
Cost to Probability of Disease
Farm High Low
High
Prevent Prevent/Treat
Treat/Prevent Ignore
Low

15. Evaluating Trade-offs
Cost to Cost of Treatment
Farm High Low
High Prevent Treat/Prevent
Prevent/Treat Treat/Ignore
Low

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. Disease Management
May be Key to Survival

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. 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. 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. 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. 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. 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. Brief Summary of PRRS Study
 Source of Information:
 10 Case Study Farms
 Range of Producer Types
 National Animal Health
Monitoring System PRRS
Incidence

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. 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. Case Study Population
NURSERY
Farm Number of Groups Number of Groups
Affected Unaffected
A1 40 105
J 66 220

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. 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. 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. 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. 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. 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. 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. 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. 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