Agriculture Online
05-07-07
Study: Pharmaceuticals playing big role in beef production growth
Pharmaceutical technologies -- parasite control products, growth promotant
implants, sub-therapeutic antibiotics, ionophores and beta-agonists -- have a
profound impact on the U.S. beef industry.
The improvement in growth and efficiency produced by these products impacts
all phases of beef production -- cow-calf, stocker and feedlot -- significantly
increasing the volume and decreasing the cost of beef we produce in the U.S.
Professor of economics at Iowa State University and director of the Iowa
Beef Center John Lawrence recently completed an economic analysis of the
impact of pharmaceutical technologies on U.S. beef production using 2005 cattle
prices and production input costs. According to a press release, performance
data from university studies conducted over the past 20 to 25 years for each of
the technologies were combined using meta-analysis, a widely accepted
technique for combining empirical data.
The performance results were converted to dollar impact using budget data from
10 universities in various regions of the U.S. The combined economics indicate
that these technologies produced a direct cost savings to producers of $365.00
per head of beef cattle raised. Selling prices would have to increase by 36% to
cover the increase in costs without these technologies.
Lawrence also analyzed these results using the Food and Agricultural Policy
Research Institute (FAPRI) model of U.S. agriculture to estimate the impact on
beef production, price and trade if these pharmaceutical technologies were not
available. The FAPRI model indicates that U.S. beef industry would be impacted
as follows:
* 14% smaller calf crop
* 18% reduction in total beef produced
* 180% increase in net beef imports
* 13.5% increase in retail beef prices
* Pork and poultry production would expand to fill the void for domestic and
export customers.
Lawrence analyzed each production segment individually. Because deworming
programs have a significant impact on both pregnancy rates, survival and
weaning rate, the overall impact of eliminating these combined technologies on
the cow calf segment was a 47% increase in breakeven selling prices, or $225
per head.
Pharmaceutical technologies also had a significant impact on breakeven selling
prices in the feedlot segment. Implants, ionophores, antibiotics, beta-agonists
and dewormers combined impact breakevens by 12% or $126.00.