System Economic Costs of Antibiotic Use Elimination in the US Beef Supply Chain

Abstract

There is consumer pressure on the US beef cattle industry to minimize antibiotic use (ABU) in order to aid in the global antimicrobial resistance mitigation efforts. Our objective was to estimate the economic costs of ABU constraints in a conceptual US integrated beef supply chain (IBSC) to aid the beef industry in mitigating the ever-increasing risk of antimicrobial resistance, by reducing their ABU. An IBSC network model was developed and differentiated into 37 different nodes of production. Each node could only raise a specific type of animals, differentiated based on the production technique and animal health status. The cost, as well as the weight gain coefficient, was estimated for each node, using an IBSC cost of production model. Linear programming solutions to this network model provided the least cost path of beef supply through the system, under various ABU constraints. The cost as well as weight gain coefficient of the 37 nodes, initial supply of 28.5 million calves weighing 0.65 million metric tons, and final demand of 16.14 million metric tons of slaughter-ready fed cattle were used as inputs/constraints to the three different linear programming scenarios, with different ABU constraints. Our first scenario, which placed no constraint on ABU, estimated that the minimum total economic cost to meet the final beef demand was $38.6 billion. The optimal solution was to use only the high health status calves for beef production. Because low health calves occur in the beef system, our second scenario required all the calves irrespective of their health status to be used, which increased the system cost to $41.5 billion. Thus, the value of only producing high health status calves is $2.9 billion. Our third scenario, which restricted feedlots from using antibiotics even for low health calves, incurred a total cost of $41.9 billion for antibiotic-free beef production. We concluded that the additional cost of $367 million for implementing antibiotic-free beef production is relatively low, ~0.90% of the minimum cost incurred for the conventional beef supply chain (model 2 cost of $41.5 billion). However, a much higher cost savings is obtained by producing only high health status calves.