24/10/2018
Dr. John Smith, Director of Health Services Fieldale Farms Corporation, was in charge of the conference about “Cost of respiratory diseases and their epidemiological control in broilers” at the LPN Congress 2018.
An accurate estimate of the costs of uncontrolled diseases provides valuable information for making rational decisions regarding the expenses to prevent, control, minimize or treat these diseases since investing more in addressing them than in the costs involved in the disease itself is a wrong decision from a business point of view.
Estimating the costs of a disease often involves assumptions based on limited data.
Two of the main factors that influence calculations of the potential cost of a disease:
- If it occurs, the average disease cost in a single flock.
- The probability and potential of its occurrence.
Other factors include the expected effectiveness and cost of the intervention.
Average cost of an uncontrolled disease
The average cost of a disease in a single flock is the easiest factor to estimate, although it is subject to variation.
In the case of a devastating disease such as Highly Pathogenic Avian Influenza (HPAI), where a complete loss of the flock would be expected if no action is taken, the cost per flock is evident: loss of 100% of the animals, plus expenses cleaning. However, in the case of a disease such as Infectious Bronchitis (IB), in which virulence varies between strains and serotypes, predicting losses will be more complicated.
On the other hand, the methods used to calculate the costs and potential losses to be included in this calculation can vary considerably.
Rather than based on the cost of the individual components of the losses (mortality, seizures, worsening of feed conversion, etc.), the best estimates are derived from the assessment of the total cost of production –with and without the disease–. However, when comparing affected and unaffected flocks, it must be considered that most diseases manifest variably in terms of severity, so the identification of affected flocks can be subjective.
When comparing costs before, during, and after a disease outbreak, one must consider seasonal and yearly variations in production costs.
By considering the production costs required to deliver a chicken to the processing plant and dividing this number by the pounds that pass inspection, you can get a good ratio of the live cost per pound of meat.
Production expenses must include the following costs:
- Chick delivery
- Total feed to produce a flock
- General expenses and supervision of the company
- Brooding (accommodation, litter, inputs, labor, water, etc.)
- Vaccinations and other services
- Capture and transport
Dividing this total cost by the pounds passing inspection will account for the impact of the disease in the form of mortality, morbidity, feed conversion, yield loss, and seizures.
However, the cost per pound of meat is only part of the equation. If the disease results in inspection delays at the processing plant, the costs of this action can increase and even exceed the losses directly associated with the disease.
Estimation of the probability and potential magnitude of a disease outbreak
It is difficult to predict when and how a disease will occur and its magnitude. The costs can be significant, and honestly, what is invested in prevention is less than what could be done, taking into account the diseases’ probability, magnitude, and cost.
Additional factors: expected effectiveness and cost of interventions
Interventions can include biosecurity measures, vaccination, management changes, and preventive and curative treatments, the cost of these interventions being easy to calculate.
The effectiveness of some interventions, such as vaccination, can be estimated based on experience, while it is more difficult to estimate for other interventions, such as vehicle cleaning and disinfection.
Data typically quoted
Agri Stats is a private benchmarking service used by most integrated broiler producers in the US. Participants fill out a standard report every week and every month, specifying all costs and production parameters. Agri Stats collects and analyzes data and provides information regularly detailing the comparative costs of all aspects of production, from raising chickens to processing. In addition, each recipient receives a customized report that indicates their results in each list, being able to see the impact of essential changes in efficiency.
According to the 2016 annual report:
- The 0.50 cent/pound (1.1 cent/Kg) variation in total costs translates to $1,482,000 per year.
- A 1% variation in mortality implies an additional cost of 0.08 cent/pound (0.176 cent/Kg), which amounts to $241,000/year.
- The one-day change in shipping to market for a 4.4-pound bird affects calorie conversion by 61 calories/pound of meat (134 calories/Kg), which equates to $471,000/year.
- A change of 50 calories/pound of meat (110 calories/Kg) will change the cost/pound of meat by 0.41 cents or $1,206,000/year.
- A change in feed costs of $1.00/ton equals 0.10 cent/pound (0.22 cent/Kg) or $285,000/year.
- A variation of 0.25% in seizures will affect the cost/pound of meat by 0.09 cents (0.0198 cents/Kg) or $267,000/year.
These figures vary from year to year, as production costs change and must be continually updated.
