The impact of bovine respiratory disease (BRD) equals direct costs (mortality + morbidity + reduced animal performance + carcass impacts) plus indirect costs (labour + infrastructure + intangibles, says Kee Jim, DVM, Feedlot Health Management Services, Ltd., Okotoks, Alberta.

Direct Costs

1. Mortality cost is determined by the cost of the feeder animal, production cost up to the time of death, interest, “opportunity” cost of not marketing the animal, loss of feeding margin to the feedlot and cost of carcass removal/disposal.
   
   • Cost of feeder - feeder price multiplied by weight of feeder
   • Production cost up to time of death - feed, processing, treatment, yardage, and bedding
   • Interest – carrying cost of feeder purchase and accumulated costs
   • Opportunity cost - expressed as dollars per animal
   • Loss of margin to feedlot - decline in pen occupancy
   • Carcass removal/disposal - up to $75.00 per head
     
2. Morbidity cost is determined by cost of pharmaceuticals used to prevent, treat, and control BRD.
   
   • Prevention (vaccines and antimicrobials)
   • Individual animal treatment (antimicrobials and ancillary therapy)
   • Group level intervention (mass treatment – parenteral injection, in feed or water antimicrobials)
     
3. Animal Performance Reductions:
   
   • ADG (Average daily gain)
   • DM:G (Dry matter to gain)
   • DOF (Days on feed)
   • Effects are related to severity of BRD
   • Highly variable results are results reported in the literature
   • Effects on DM:G are often estimated without measuring intake
     
4. Carcass Impacts:
   • Morbidity tends to reduce marbling and improve yield grade
   • Effects are related to severity of BRD
   • Highly variable results are reported in the literature
   • Effects are often confounded by carcass weight

Indirect Costs

1. Infrastructure Costs:
   • Buildings
   • Equipment for animal handling
   • Facilities to house cattle affected with BRD
     
2. Labor:
   • Pen riders
   • Hospital and processing crews
   • Horses
   • Additional support staff
     
3. Intangibles:
   • Staff morale
   • Chaos effect
   • Aggravation factor
   • Logistical constraints

The impact of BRD must be taken within the context of total costs of production, most notably the purchase price of the feeder. The simple math for a 500-pound animal costing $1/pound. is that for every cent reduction in purchase price, the feedlot can “afford” an additional 1 percent death loss. Thus, assuming that the objective of the feedlot is to maximize net profitability, the highest potential rate of return is often associated with “high risk” BRD scenarios were the initial purchase price of the feeder is steeply discounted. In general, feeder cattle with very low BRD risk are priced accordingly.

750-pound Feeder Steer Production Costs Including Purchase Cost, March 2009

750-pound Feeder Steer Production Costs, March 2009