Download Slides for 11/4 and 11/6 - Department of Agricultural Economics

Biosecurity
Vulnerability and Strategy evaluation
Continued
Total Welfare
Total Welfare for CB analysis
P2
Demand
Supply
CS
P*
E
PS
P1
Q*
Q
TSW=CS+PS
Appraisal Based on Changes in Net Income
• Examining situations where economic agents are
operating with varying biosecurity attributes where all
other factors either do not vary or can be controlled
• Estimating a relationship between net income and the
biosecurity attribute
• Calculating the change in net income induced by the
change in biosecurity attributes
• Utilizing quantitative relationship between biosecurity
change and net income .
Assumes prices don’t change so demand is perfectly elastic
Appraisal Based on Changes in Net Income
Assumes prices don’t change so demand is perfectly
elastic
Initial Accomplishments (V)
Applying Sector modeling
Forestland
Forest
Production
Biofuel/GHG
Demand
Cropland
Water
Labor
Crop
Production
Natl. Inputs
Markets
Domestic
Demand
Export
Processing
Import
Other
Resources
Pasture Land
AUM Grazing
Livestock
Production
Feed
Mixing
Model Economic Structure
Sector Model Economic Structure
Household
Demand
Land
Feed
Demand
Water
Domestic
Demand
Labor
Processing
Demand
Grazing
Export
Demand
Aggregate Supply and
Demand
Processing
Supply
Nat
Inputs
Import
Supply
Primary Commodities
Cotton
Corn
Soybeans
Sorghum
SOFT
HRWW
DURW
HRSW
Rice
Oats
Barley
Potatoes
Silage
Hay
Alfalfa
Sugarcane
Sugarbeet
Tomatofrsh Tomatoproc Orangefrsh
Orangeproc Grpfrtfrsh Grpfrtproc
SwitchGras HybrPoplar Willow
Cornres
SorgRes
RiceRes
WheatRes
OatsRes
BarleyRes
Sheep
HogFarrow
StockSCav
VealCalf
Beefcows
CowCalf
FeedPig
StockHCav
Turkeys
BioManure
BeefFeed
PigFinish
StockSYea
Broilers
Dairy
OthLvstk
StockHYea
Eggs
Secondary Commodities
OrangeJuic
HFCS
Canning
DDG
Dextrose
FedBeef
Turkey
SkimMilk
Butter
IceCream
Bagasse
EdTallow
GrpfrtJuic
Beverages
RefSugar
CornStarch
FrozenPot
NonFedBeef
WoolClean
Cream
AmCheese
SoybeanMeal
Confection
GlutenMeal
CornOil
DriedPot
Pork
FluidMilkwhol
EvapCondM
OtCheese
Lignin
NonEdTallow
LigninHardwd LigninSoftwd
YellowGrease
CropEthanol CellEthanol Biodiesel
MktGasBlend SubGasBlend Tbtus
SoybeanOil
Baking
GlutenFeed
CornSyrup
ChipPot
Chicken
FluidMilkLowFat
NonFatDryM
CottageChe
BiodieselWO
FASOM Agricultural Regions
Pacific
Northwest
West
East
Pacific
Rocky Mountains
Southwest
Great
Plains
Lake States
Northeast
Corn Belt
South
West
Southeast
South Central
Foreign Regions in FASOM
26
22
23
27
21
19
26
20
8
13
10
12
7
2
25
14
6
11
16
5
15
1
29
3
28
15
17
30
FASOM has supply and demand curves for corn, 4 types of wheat, soybeans,
rice and sorghum across the above regions and within 11 major US regions
where the region trades the commodity. FASOM also maintains transportation
costs between all regions. The model determines exports to the point where
prices are in equilibrium considering transport across all markets.
Modeled Beef Cattle Flow
First
Grazing
Steer Calves
Steer Calf
Stockers
Program
Second Grazing
Cow/Calf
Cull
Cows
•Beef Steer Calves
•Beef Heifer Calves
•Cull Cows
Steer Yearling
Stockers
Feedlot
Beef
Yearlings
Feedlot
Beef
Calves
Heifer Yearling
Stockers
Bulls
Replacement Breeding
Stock
Program
Second Grazing
Heifer
Calves
First
Grazing
Program
Program
Heifer Calf
Stockers
Non-Fed Beef
Slaughter
Feedlot Beef
Slaughter
Modeled Dairy Cattle Flow
Non-Fed
Beef
Slaughter
Feedlot
Beef
Slaughter
Steer Yearling
Stockers
Feedlot
Beef
Yearlings
Dairy Cull
Cows
Dairy
Raw Fluid Milk
•Milk
•Dairy Steer Calves
•Dairy Heifer Calves
•Cull Dairy Cows
Dairy
Steer
Calves*
Second Grazing
Steer
Calves
First
Grazing
Program
Program
Steer Calf
Stockers
Feedlot
Beef
Calves
Bulls
Replacement Breeding
Stock
Dairy
Heifer
Calves
*Dairy Steer Calves merge in with the Steer Calves in the Beef Cattle Flow
Rift Valley Fever
An emerging disease and agro-bio-terror
threat
•
•
•
•
Mosquito-borne viral disease of livestock and
humans
Transmission modulated by weather
Demonstrated ability to travel
Unknown outside Africa and Arabian Peninsula
Appearance in US expected to impact
agriculture sector severely
•
•
Cost of cattle illness and death
Potential bans on US livestock
Limited analytic tools to support decisionmaking or operational planning
•
•
French vector model
USDA/NASA risk assessment method
Epidemic/Economic Modeling
Biology and Epidemiology
Disease Vectors
Infection
Modeling
Subject Matter
Experts
Costs & Impacts
Analysis
Estimates
Environment
Animal Production
Economics
Items changed in FASOM/ASM for Rift Study
For both beef and dairy on a geographic basis
Calving rate
Adult beef production (Deaths and culling)
Culled cattle (those who lost calves)
Replacement needs (lost adults and lost replacements)
Milk production (Deaths and cows that lost calves)
In model other indirect effects
Feed usage
Calf movement
Released feed usage expanded elsewhere (exports, biofuels)
Regional locus of feeding
Production
Commodity prices
Dairy and beef products
High Plains FMD Epidemic/Economic
Modeling
• 64 scenarios over various outbreak and
disease mitigation scenarios
– Early detection vs. late detection
– Ring vs. targeted vaccination
– Adequate vs. inadequate vaccine availability
– Regular vs. enhanced surveillance
– Slaughter options: ring slaughter, slaughter of
infected, and slaughter of dangerous contacts
AusSpread
• Output
– Duration of epidemic in weeks
– Expected number of infected herds
– Expected number of dangerous contacts
– Expected slaughter
– Expected vaccination
Integration into FASOM
• Unlike Rift, FMD affects more than cattle
• Adjustment of sheep and swine budgets as
well
• Estimate percentage impacts and adjust
budgets by these percentages
• Spatially lock infected region at the production
level
Specific Adjustments
•
•
•
•
•
•
•
Cow/Calf
Dairy
Milk
Sheep
Wool
Feeder Pig Production
Hog Farrow to Finish
Example: Dairy
• Dairy budgets are on a per cow basis
• A single dairy cow produces, on average a certain
amount of milk and a certain amount of dairy
calves each year as well as cull cows
• To do this she needs a certain amount of inputs
• The conversion of FMD effects into percentage
allows the modeler to adjust these outputs across
an entire region
• the model automatically shifts input to
alternative uses
Baseline Specification
Average
Units / Description
base.Silage
-6.600
US tons for dairy production
base.Hay
-5.060
US tons for dairy production
base.Milk
193.906
100 lbs of raw milk
base.CullDairyCows
1.657
100 lbs of cull dairy calves
base.DairyCalves
2.057
100 lbs of dairy calves
base.biomanure
4.940
base.SoybeanMeal
0.860
tons manure available for
bioprocesses
tons soybean meal
base.DairyCon0
108.529
base.Pasture
1.750
100 lbs grain blend for dairy
cattle
Acres of pasture land
base.Labor
31.587
Hours
base.othercosts
1272.391
Dollars
base.Profit
1435.851
base.Head
1.000
Dollar difference between
revenues and costs
Budget is for one animal
Code in FASOM
*adjust budgets for slaughter
livestockbud("TxHiPlains",ANIMAL,livetech,eftech,"DairyCalves")
$(livestockbud("TxHiPlains",ANIMAL,livetech,eftech,"DairyCalves")
and avgeffectsonherd("dairy",newscenarioname,"TxHiPlains",herdcomponent))
=(livestockbud("TxHiPlains",ANIMAL,livetech,eftech,"DairyCalves")
-2.057*(avgeffectsonherd("dairy",newscenarioname,"TxHiPlains","infected")+
avgeffectsonherd("dairy",newscenarioname,"TxHiPlains","immune")+
avgeffectsonherd("dairy",newscenarioname,"TxHiPlains","dead")));
*handle milk loss
livestockbud("TxHiPlains",ANIMAL,livetech,eftech,"milk")
$(livestockbud("TxHiPlains",ANIMAL,livetech,eftech,"milk")
and avgeffectsonherd("dairy",newscenarioname,"TxHiPlains",herdcomponent))
=(livestockbud("TxHiPlains",ANIMAL,livetech,eftech,"milk")*
(1-(avgeffectsonherd("dairy",newscenarioname,"TxHiPlains","latent")+
avgeffectsonherd("dairy",newscenarioname,"TxHiPlains","infected")+
avgeffectsonherd("dairy",newscenarioname,"TxHiPlains","immune")+
avgeffectsonherd("dairy",newscenarioname,"TxHiPlains“,“dead”)));
Initial Accomplishments (VI)
Estimated Economic Impacts of an FMD outbreak
Economic Impacts
Welfare for
Agriculture
Base
millions
Large Feedlot
(1) Early
Detection
Grazing Operation
(57) Late
Detection
(15) Early
Detection
Backyard
(7) Late
Detection
(40) Early
Detection
(16) Late
Detection
US Consumers
US Processors
US Producers
$1,587,043
-$218
-$354
-$64
$163
$172
-$21,106
$2,681
$13
$0.0142
$13
-$15
-$44
$46
$54,951
-$22,384 -$44,849
-$1,514
-$3,498
-$4,213 -$7,108,210
$1,644,676
-$22,590 -$45,203
-$1,565
-$3,350
-$4,085 -$7,129,270
US Total
Foreign Consumers
Foreign Producers
Rest Total
Total Globally
$188,107
-$87
-$89
-$65
-$37
-$62
-$1,691
$15,039
$21
$19
$10
-$15
-$10
$1,329
$203,146
-$66
-$70
-$54
-$53
-$72
-$362
-$22,656 -$45,274
-$1,620
-$3,404
$1,847,823
-$4,158 -$7,129,632
Costs for Disease Management and
Carcass Disposal
• Disease Management
– Vaccination (per head and per farm)
– Testing (per farm)
– Surveillance (per farm/ per visit)
• Carcass Disposal
– Appraisal (per farm)
– Euthanasia (per head)
– Disposal (per farm)
– Cleaning and Disinfecting (per farm)
Average Costs Across Scenarios
• Disease Management
– $5,912,086.82
• Carcass Disposal
– $39,998,352.68
Average Across Scenarios: $45,910,439.5
Price Changes from Pre-Event Base
• Drops in
– Cotton, soybeans, wheat, barley, silage , hay and sugarcane (less than
1%)
– Feeder Pig prices dropped about 15% across scenarios
– Feeder calves, stocker calves dropped 2-7%
– Not much change in cattle yearlings
• Prices Increased for
– Fresh vegetables and raw milk (less than 1%)
– Broilers, pork and fed beef (small 0.1 – 2%)
– Generally no change in lamb
• Certain late detection, backyard index cases were exceptions.
– Very large drops and increases (15-40%)
– Rarely, dairy calves and steer calves dropped almost 100%.