assessing the economic impact of swine disease - the case of prrs

Assessing the Economic Impact ofSwine Disease -

The Case of PRRS

James KliebensteinAgricultural EconomistIowa State University

Production Impacts

Death Permanent Damage Uncompensated Growth

Interruption Reduced Feed Efficiency

Production Impacts

Abortion Reproductive Inefficiency Decreased Animal Product Output Increased Culling

Cost of Disease

Mortality Value, expenses, and disposal

Morbidity Production, efficiency, cash flow

Revenue loss Lower weight & value, condemn

Cost of Disease

Prevention and/or treatment Seedstock suppliers

Lost market Reputation/goodwill

Industry impact Export market, consumer

confidence

Budgeting EconomicImpact of Disease

Reduced Revenue Reduced Costs Increased Costs

Impact of Disease on Market PigGrowth

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.

Age/days

Weight

A

B

C

D

AS DS

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

Relationship of Treatment Leveland Losses

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

$

Treatment LevelBA C

Control costs

Losses

Issues in DiseaseManagement Biosecurity

Economic Impact on theHerd/Operation

Impact on Management of AnimalFlow or System

Need to have a focus on what theit causes as well as what causesit.

Issues in DiseaseManagement Biosecurity

Cost of Prevention Cost of Treatment Prevention Effectiveness Treatment Effectiveness Probability of Getting Disease Disease Contagiousness

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

Evaluating Trade-offs

Treatment Effectiveness

High

Low

High Low

Treat

Treat/Ignore Prevent/Ignore

Prevent

Cost toFarm

Evaluating Trade-offs

Probability of DiseaseCost toFarm

High

Low

High Low

Prevent

Treat/Prevent Ignore

Prevent/Treat

Evaluating Trade-offs

Cost of Treatment

High

Low

High Low

Prevent Treat/Prevent

Prevent/Treat Treat/Ignore

Cost toFarm

Variables Treatment Prevention

Incidence More important for

low incidence Important for high

incidence

Infections Less important Important Clinical Important Less important

Sub-Clinical Less important Important Lead to other

disease

Less important Important

Contact

Transfer

Important Less important

Air Transfer Less important Important

Evaluating Trade-offs

Disease ManagementMay be Key to Survival

Breeding-age Females Culled over a 12-monthPeriod 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 inthe U.S. Pork Industry, 1990-2006. USDA-APHIS-US,CEAH, Ft. Collins, CO.

Percentage of Pigs That Died DuringNursery Phase

Time Period Percent

1990 2.4

1995 2.3

2000 2.6

2006 2.9

Source: USDA, 2008, Part IV, “Swine 2006: Changes inthe U.S. Pork Industry, 1990-2006. USDA-APHIS-US,CEAH, Ft. Collins, CO.

Percentage of Grow/Finish Pigs that Died DuringGrow 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 inthe U.S. Pork Industry, 1990-2006. USDA-APHIS-US,CEAH, Ft. Collins, CO.

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 inthe U.S. Pork Industry, 1990-2006. USDA-APHIS-US,CEAH, Ft. Collins, CO.

Percent of Sites in Which PRRS was Diagnosedby 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.

Percentage of Sites Which Usually Vaccinated forPRRS 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 inthe U.S. Pork Industry, 1990-2006. USDA-APHIS-US,CEAH, Ft. Collins, CO.

Brief Summary of PRRS Study

Source of Information: 10 Case Study Farms Range of Producer Types National Animal Health

Monitoring System PRRSIncidence

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

Case Study PopulationFARROWING

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

Case Study PopulationNURSERY

Farm Number of GroupsAffected

Number of GroupsUnaffected

A1 40 105

J 66 220

Case Study PopulationGROW-FINISH

Farm Number of GroupsAffected

Number of GroupsUnaffected

A 38 109

G 2 12

H 12 8

I 27 21

J 546 356

Farrowing Productivity Differences –PRRS Outbreak

Farm

Percent Change

Farrowing RatePigs Weaned per sow

FarrowedPigs Weaned per Sow per

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

Farrowing Productivity Differences –PRRS Outbreak

Farm

Absolute Difference

Farrowing RatePigs Weaned per sow

FarrowedPigs Weaned per Sow per

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

Nursery and Grow-Finish ProductivityDifference – PRRS Outbreak

Farm

Percentage Difference

Average DailyGain

Feed Efficiency Mortality (%)

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

Nursery and Grow-Finish ProductivityDifference – PRRS Outbreak

Farm

Absolute Difference

Average DailyGain

Feed Efficiency Mortality (%)

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

Summary of Pig Production EfficiencyImpacts of PRRS-Case Study Farms

NegativeGroup

PositiveGroup 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

Range in Economic Impact forCase 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

Economic Impact of PRRS Outbreakfor Selected Feed Costs

Item Corn ($/bu)SBM ($/ton)

2.50199

3.75238

5.00277

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

Annual Cost of PRRS to the United StatesSwine Industry for Selected Feed Costs

ItemCorn ($/bu)SBM ($/ton)

2.50199

3.75238

5.00277

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