Volume 4, Number 13 - June 24, 2004
brought to you online by Pinedale Online
Brucellosis bleeding cost tallied
With the withdrawal of Wyoming's brucellosis-free status in mid-February, new disease testing requirements were imposed for Wyoming cattle, at a cost of $1.50 to $11.50 per head.
A newly released special report completed by the Wyoming Economic Analysis Division provides an overview into the brucellosis problem and the potential economic impacts associated with the disease.
The Wyoming Livestock Board and the Wyoming State Veterinary Laboratory estimate that 330,000 cattle may be tested for brucellosis this year alone. Four potential cost scenarios could occur from brucellosis testing, according to the state report:
• $495,000 lost in livestock sales in 2004,
• A total loss of $3.465 million in livestock sales between 2004-2010,
• $3.795 million lost in livestock sales in 2004, and
• A total loss of $25.565 million in livestock sales over the seven-year period.
According to Amy Bittner, an economist with WEAD, "The employment impacts from low-cost testing could result in 11 jobs initially lost in the farm sector. Additionally, if a higher testing cost was instituted then 87 farm jobs could be eliminated due to the decrease in livestock sales. Secondary employment effects may also include reductions in private non-farm employment such as in the retail and services sectors."
According to the Animal and Plant Health Inspection Service, the economic impact of the new mandatory brucellosis testing measures to the state may be minimal. When APHIS devises a work plan to deal with an issue such as a brucellosis outbreak, it considers whether the rules will be "economically significant" to the parties or areas affected by the new policy.
However, this assumption is based on the idea that an economically significant impact amounts to an annual cost of $100 million or more or that adversely affects certain facets of the economy "in a material way." Wyoming's economy and population differ immensely in comparison to other states and the federal government is not required to take into consideration the uniqueness of the state's economy and demographic make-up when instituting these new testing regulations.
"A $1 to $2 million negative economic impact may not be considerable in other states, but it could be detrimental due to Wyoming's sparse population and lack of economic diversification," observed Bittner.
Prior to the mandatory brucellosis testing requirements, the WSVL surveillance tested 50,000 samples annually, using $65,000 appropriated from the federal government. Now the estimated number of samples to be tested is 280,000 more than the previous year, but the amount of federal assistance dedicated for testing costs is still the same, $65,000.
"An important question to ponder is where will the additional money come from to cover the expense of testing and future testing if Wyoming does not regain its brucellosis-free status in February 2005? Potential sources of additional funds include the WLSB, federal government, the State of Wyoming, and perhaps agricultural producers will have to pay more for testing," stated Bittner.
Producers may lose sales of cattle to other states and foreign countries that do not want to take the risk of buying Wyoming cattle because it may jeopardize their brucellosis status.
Estimates of specific economic losses related to brucellosis infection include a cost of $200 per infected cow in the first year of infection. Breeding problems, abortions, culling, weak calves and replacement rates could create a second year cost of $5.82 per infected animal. These examples are considered worst-case scenarios because they assume an unvaccinated and undetected herd.
Additional testing costs will most likely decrease producer profits. In 2001, the profit margin for all Wyoming agricultural producers totaled $74.3 million. There are approximately 9,200 agricultural operations in Wyoming. By dividing total profit, $74.3 million, by the total number of operations, an $8,076 profit per producer for 2001 is obtained. Utilizing the annual brucellosis testing cost figures discussed earlier, the low-end being $495,000 and high-end of $3.795 million, the profit margin for agricultural producers would be reduced to $73.8 million or $70.5 million respectively. Annual individual producer profit would only be $8,022 or $7,663, respectively.
"These lower profit margins may also contribute to the issues discussed earlier in regards to farm employment. Many producers feel it necessary to have other occupations in addition to agricultural production," Bittner said.
The complete report is available at: http://eadiv.state.wy.us.
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