Sponsored By

The economics of antibiotic use

Connecting the dots between use and outcome can be fuzzy. Third of a six-part series.

Wes Ishmael

June 6, 2017

6 Min Read
The economics of antibiotic use
Burt Rutherford

Forget for a moment the manifold benefits of antibiotics in cattle production — disease treatment, control and prevention — that improve animal wellbeing. Think only of the economics.

The value equation seems straightforward enough when it comes to an individual animal or group — the cost of treatment vs. the likely outcome. Buyers routinely project morbidity and mortality levels into pricing, in general terms and sometimes more specifically.

As Mike Apley explains, “If you know calves received multiple antibiotics prior to arriving at your operation, those calves have to be considered in a different manner in your economic projections.”

Apley, a veterinarian and professor of production medicine and clinical pharmacology at Kansas State University’s College of Veterinary Medicine, is speaking specifically to the potential of dealing with calves carrying pathogens resistant to some antibiotics.

“Wrecks could be worse in the world of high-risk calves when high stress is accompanied by a resistant pathogen, and you have to budget accordingly,” says Apley. “You have to consider the possibility that some have advanced lung lesions, and that the bacterial pathogens within these lesions may not be susceptible to the antibiotics you will be using.”

Related:A beef producer’s guide for use of antibiotics

This changes your risk picture, he says. “You should be asking for detailed antibiotic histories from those selling assembled groups of calves. If they needed antibiotics to make it to you, that could have an effect on your ability to use antibiotics to treat them at your place.”

Dealing with dollars

There’s no questioning the need for antibiotics to treat, control and prevent bacterial disease in cattle. Consider only the bovine respiratory disease complex (BRDC).

“BRDC is an economically important disease and a leading cause of death loss in beef cattle in North America,” say researchers at Washington State University (WSU), as part of the BRDC Coordinated Agricultural Project (CAP). “Survey data suggest that respiratory disease accounts for approximately 29% of all calf death losses in the United States.” That’s based on a 2011 National Animal Health Monitoring System survey.

Working with the feedlot data collected as part of the project, BRDC CAP economists used the most current national estimate of 16.2% BRDC prevalence in feedlots. They calculate that 4,071,854 feedlot cattle were likely afflicted with BRDC in 2013. Based on a single treatment cost and lost carcass value, they say a conservative estimate is a $253.97 loss per head. That’s an estimated total of $1.034 billion lost by the feedlot industry.

Related:6 antibiotic myths explained

Innumerable studies document the efficacy of using particular antibiotic products for specific purposes. Broader studies consider the economic impact of not using antibiotics for specific purposes.

One example of the latter is the Economic Analysis of Pharmaceutical Technologies in Modern Beef Production, conducted by Iowa State University researchers John Lawrence and Maro Lawrence Ibarburu in 2005. They looked at the estimated economic impact of not using implants, ionophores, subtherapeutic antibiotics, beta agonists and dewormers.

The cost of not using subtherapeutic antibiotics in the feedlot was estimated at $5.86 per head (in 2005 dollars). The cost of not using ionophores was $12.43. Thus, a total cost of $18.29 when not using either of those technologies. For perspective, the estimated cost of not using the other three aforementioned technologies was $103.77; more than half of that was from implants.

Other analyses over time consider the economic cost of cattle that need treatment even once. Arguably, the seminal effort came from the late John McNeill and fellow researchers at Texas A&M University with the venerable Texas Ranch to Rail program.

 “Analysis by McNeill in 1996 found that the indirect losses from reduced gains and lower carcass weights [as much as $150] were more significant than direct treatment costs, which are reported as high as $45 per head in the feedlot,” say BRDC CAP researchers.

No apples to apples

With all that said, connecting the dots between antibiotic use and specific outcome can get fuzzy; for example, explaining the combination of factors that enable some cattle to remain healthy, and pinpointing the variables making the use of particular antibiotics more successful in one situation than another.

After all, there are a pile of variables that contribute to disease risk in calves. For example, everything from genetics, to nutrition, to vaccinations and timing of vaccinations, to no vaccinations at all prior to marketing as calves, to the level of commingling, to time between initial marketing and arrival.

Then there are factors at the arrival location — everything from biosecurity to protocols for handling and processing.

Antibiotic use conundrum

It gets even dicier when trying to assess industry-wide economic impact based on the reason for antibiotic use.

Researchers with USDA’s Economic Research Service (ERS) tried to ferret out that kind of profile with their 2015 report, Economics of Antibiotic Use in U.S. Livestock Production.

It came on the heels of final guidance from the Food and Drug Administration (FDA) for voluntarily phasing out the use of medically important antibiotics for production purposes.

“Production purposes” refer to such practices as using antibiotics to increase things like weight gain and feed efficiency, rather than to treat, control or prevent disease. The production use of antibiotics continues to be the most hotly debated topic in conversations regarding antibiotic use in livestock — and potential impact on antibiotic resistance in humans.

Efforts that led to the recently implemented veterinary feed directive (VFD) included establishing procedures for pharmaceutical companies to voluntarily phase out labels indicating the use of medically important antibiotics for growth promotion. The VFD requires veterinary oversight and a prescription for medically important antibiotics administered through feed or water for therapeutic purposes.

Authors of the ERS report addressed a number of issues such as prevalence of use by livestock sector and for what purpose, trends in use, and the impact on productivity and cost. Ultimately, they wanted to assess the economic impact of restricting antibiotics use for production purposes in livestock production.

At farm level, ERS researchers estimate that “antibiotics used for production purposes generally have limited effects on the productivity of raising livestock at the farm level; at most, on the order of 1% to 3%.”

Keep in mind that there are lots of caveats to that statement. It addresses only farm-level economics, not economics at the animal or market levels. Given the paucity of beef-specific research, the estimate is derived mainly from pork and poultry studies.

The U.S. beef industry has long discouraged the use of antibiotics for production purposes. In fact, it’s part of the checkoff-funded national Beef Quality Assurance (BQA) program.

“Responsible antibiotic use is important to ensure that animal health technologies remain viable for the beef industry,” according to the BQA manual, Antibiotic Stewardship for Beef Producers. “It is key that judicious use protocols are developed so that animals are never marketed with residues and that cattlemen responsibly treat sick cattle …”

Editor’s note: Each part of this exclusive BEEF series is intended to provide facts and perspective relative to the ongoing debate about the use of antibiotics in livestock production in general, and in cattle production specifically.

Next month: Antibiotics and people

Subscribe to Our Newsletters
BEEF Magazine is the source for beef production, management and market news.

You May Also Like