IBR Economic Report Nov 2020 FINAL

Analysis of the economics of BoHV-1 infection in Ireland Incorporating analysis of the impact of the disease on animal productivity, national genetic gain and international trade

Kevin Hanrahan Laurence Shalloo Paul Crosson Trevor Donnellan

Riona Sayers Mervyn Parr

David A. Kenny Damien Barrett Richard Lynch

www.AnimalHealthIreland.ie wwwTeagasc.ie

This report was produced by Teagasc on behalf of Animal Health Ireland with financial support from the Department of Agriculture, Food and the Marine.

Glossary AFBI-NI

Agri-Food and Biosciences Institute – Northern Ireland

AIMS

Animal Identification and Movement System

BoHV-1

Bovine herpesvirus 1

Brexit

The exit of the United Kingdom of Great Britain and Northern Ireland from the European Union College of Agriculture, Food and Rural Enterprise

CAFRE

CGE

Computable General Equilibrium

CMMS

Cattle Movement and Monitoring System Bovine Spongiform Encephalopathy Department of Agriculture, Food and the Marine

BSE

DAFM

EEC

European Economic Community Enzyme linked immunosorbent assay

ELISA

EU

European Union

FAPRI

Food and Agricultural Policy Research Institute

FTA

Free Trade Area

GBSM

Grange Beef Systems Model Infectious bovine rhinotracheitis Irish Cattle Breeding Federation

IBR

ICBF

IFJ

Irish Farmers Journal

MDSM

Moorepark Dairy Systems Model

MFN

Most Favoured Nation

MP NFS

Multiparous

National Farm Survey

NI

Northern Ireland

NISBP

Northern Ireland Suckler Beef Programme

NLE NTB

No Live Exports Non-Tariff Barrier Partial Equilibrium

PE PP

Primiparous

ROI SCC

Republic of Ireland Somatic Cell Count Standard deviation

SD UV

Unvaccinated

WTO

World Trade Organisation

Contents

1. Executive summary

06

2. Costs Associated with IBR Status on Irish Dairy Farms

11 11

Introduction

Data

12

Model

13

Scenarios analysed

13

Results

14

Conclusions

17

References

18

3. Prevalence of bovine herpesvirus 1 (BoHV-1) in spring calving suckler herds on the island of Ireland and a bioeconomic analysis of the impact on herd profitability

20 20 20 23 28 29 30 30

Introduction- ‘BeefCow’ research programme

Materials and methods

Results

Overall Summary/Conclusions

References

4. The impact of a ban on live exports on the Irish cattle sector

Introduction

Irish Live Cattle Exports: Declining value and changing composition.

32

Analysis of the impact of a live export ban on the Irish cattle sector

39

Model based analysis of the NLE scenario

42

FAPRI-Ireland Baseline Projections

43

No Live Export (NLE) Scenario Projections

44

Discussion and caveats

48

Conclusions

52

References

53

5. Overall Study Conclusions

55

6. Annex: Update on FAPRI-Ireland analysis of the economic impact of a ban on live cattle exports

57 57

Introduction

Live exports

59

2019 FAPRI-Ireland Simulations: Reference and No Live Exports Scenario Simulations

60

Impact of the No Live export Scenario (S3) relative to the soft Brexit reference run (Scenario 1) Impact of the No Live export Scenario (S4) relative to the hard Brexit reference run (Scenario 2)

63

68

Conclusions

74

References

75

1 Executive Summary

The development in other EU member states of formal IBR control/eradication programmes raises the possibility that other Member States could ban the import of Irish live cattle under the additional guarantees provided in European Commission Decision 2004/558/EC (European Commission, 2004) where they either have an eradication programme approved or evidence of freedom from infection according to Articles 9 and 10 respectively of Council Directive 64/432/EEC (EEC, 1964). Such restrictions on economic activity would be expected to have negative effects on the Irish agricultural economy. IBR is also known to have a negative impact on bovine productivity that would be expected to be reflected in a negative impact on the farm level profitability of dairy and beef production. DAFM contracted Teagasc to undertake an analysis of the economic implications of IBR with a view to considering the costs and benefits that would be associated with an IBR control/eradication programme in Ireland. The study undertaken does not constitute a formal cost/benefit analysis (see Boardman et al. 2006; Drèze and Stern, 1987). No attempt is made in this study to identify all of the costs or the benefits that might be associated with an IBR control/eradication programme in Ireland. What the study was tasked with accomplishing was an evaluation of the i) on-farm losses associated with reduced output on farm that are associated with IBR; ii) potential costs associated with a loss in genetic gain; iii) costs associated with the loss of the live export trade in calves and weanlings to EU markets. This study is comprised of three parts – two studies of the farm level losses associated with IBR conducted using the Moorepark Dairy Systems Model (Shalloo et al., 2004) and the Grange Beef Systems Model (Crosson et al., 2006) and a study using the FAPRI-Ireland model (Donnellan and Hanrahan, 2014) examines the economic impact of the loss of live exports to EU markets that might arise as a result of disease status and/or the absence of a disease control programme. Due to dramatic changes in the level of Irish live cattle exports over the period since the original delivery of this report and the formal exit of the UK from the EU (Brexit) at the end of January 2020, the economic analysis using the FAPRI-Ireland model has been updated. This revised analysis is presented as an Annex to this report.

6

Analysis of the economics of BoHV-1 infection in Ireland

The analysis of the farm level costs associated with IBR on Irish dairy and cattle rearing farms undertaken using the Moorepark Dairy System Model (MDSM) and the Grange Beef Systems Model (GBSM) are based on recently completed or on-going scientific studies concerning the prevalence of IBR within the Irish dairy and suckler cow herds and the impact of IBR on the biophysical performance of dairy and suckler cows in Ireland. No analysis of the impact of IBR on cattle finishing farms was undertaken. The impact of the IBR disease on animal performance and farm profitability may be greater than on cattle rearing farms, but analysis of this issue using existing bio-economic models will require experimental data and scientific research that are not yet in existence. The third part of this study looks at the sectoral implications of a possible policy response by EU trading partners to the endemic presence of IBR within the Irish bovine population and absence of a national IBR control/eradication programme. While the absence of barriers to trade is one of the defining principles of the EU Single Market, EU member states can restrict trade in live animals on the basis of animal disease (European Commission, 2004). To evaluate the impact on the Irish agricultural economy of such a possible restriction on live cattle trade an extreme live export scenario was examined using the FAPRI-Ireland model of the Irish agricultural economy (Donnellan and Hanrahan, 2014). A Baseline no policy change scenario and an alternative “no live export scenario” were simulated over a medium term horizon and the impact of a ban on live cattle exports measured as the difference in agricultural sector income under the no live exports scenario and the Baseline. No formal model-based assessment of the potential costs associated with the loss in genetic gain associated with IBR was conducted. The magnitude of economic losses associated with a loss in genetic gain resulting from the IBR-based exclusion of a bull from a breeding programme are not expected to be significant. This expectation of an only minimal loss in genetic gain as a result of IBR is due to the large amount of genomic data that are now available on bull calves that are used for breeding purposes. If an individual bull is excluded because of IBR, it is now possible to replace that animal with one that is likely to be only marginally inferior from the perspective of its contribution to the genetic gain in the national herd. Because of this assessment, no further model-based assessment of the magnitude or the costs of genetic gain foregone due to IBR was undertaken. Dairy farm system analysis The BoHV-1 (IBR) status of a dairy herd is found to have a significant effect on the performance and profitability characteristics of Irish dairy farms (Sayers, 2017). Using the Moorepark Dairy SystemModel and three different milk prices regimes (24 cpl, 29cpl and 34cpl) the profitability was reduced by an average of €60 per cow per year when herds were classified as seropositive for BoHV-1. At a milk price of 29 cent per litre this was equivalent to a 22% reduction in profit. When the measure of foregone income per cow of €60 per year is aggregated to an overall industry level, assuming a national dairy cow population of 1.296 million cows nationally and an 80% prevalence of IBR, it is estimated that IBR is costing the Irish dairy industry €62 million annually in terms of foregone profit as compared to a situation where IBR was not present.

7 Animal Health Ireland | Teagasc

EXECUTIVE SUMMARY

Suckler farm system analysis In contrast to the significant biophysical effects of BoHV-1 status on dairy herd performance and profitability the biophysical and farm level economic effects of BoHV-1 status on suckler cow herds taking progeny to weaning were more modest. As noted above no analysis of the biophysical and farm level economic effects of BoHV-1 status on cattle finishing farms was possible due to the absence of research on the biophysical impacts of BoHV-1 status on cattle performance in Irish cattle finishing production systems. The modest biophysical effect of BoHV-1 seropositivity, with output per hectare 3.2% lower for seropositive herds, was reflected in similarly modest impacts on farm level profitability as simulated by the GBSM. Net margin per farm was found to be 6% with lower for the seropositive herd using the GBSM, with the negative impact on incomes of lower output per hectare reflecting the higher costs per hectare on seropositive herds. The absolute magnitude of the loss in net margin associated with BoHV-1 seropositivity depends on the weanling price assumed. Four different weanling prices were evaluated and the loss in net margin associated with BoHV-1 was found to range from €10 to €21 per hectare (equivalent to a loss in net margin per hectare of 4.1% to 3.6%). Due to the significant heterogeneity amongst Irish suckler cow production systems it is not possible to aggregate from the GBSM estimate of the impact of IBR on profit per cow on suckler herds where progeny are sold as weanlings to a national farm level cost for all Irish suckler cow production. However, the magnitude of the aggregated economy-wide farm level cost of IBR on suckler farms is likely to be significantly lower than that associated with IBR on Irish dairy farms. Given that the average Cattle Rearing farm in the Teagasc NFS consisted of just over 35 hectares (Hennessy andMoran, 2016), if the loss inmargin per hectare fromBoHV-1 seropositivity on all cattle rearing farms were assumed to be the same as those on suckler farms, where progeny are sold as weanlings, then the average cost per farm would range from €350 per farm to €735 per farm. Readers should note that no evaluation has yet been undertaken of the biophysical losses associated with BoHV-1 on Irish cattle finishing farms and the economic value of losses would be in addition to those on cattle rearing farms. Sectoral level analysis of a live export ban In certain instances, restrictions on trade in live cattle can be imposed by EU Member States on animal health and disease grounds. It is possible that markets that currently import Irish cattle (or that are on the land route to markets that import Irish cattle) could ban imports of Irish cattle on the grounds of the presence of IBR in the Irish cattle population and the absence in Ireland of an approved IBR control programme. What would be the impact of such a ban on live cattle exports? The FAPRI-Ireland model-based simulations of a no live exports (NLE) scenario indicate that a ban on live exports of cattle would lead to a loss in agricultural sector income of approximately €50 m per annum by 2024, equivalent to 2% of projected Irish agricultural sector income. Under the NLE scenario, cattle that under the Baseline would have been exported live, are raised to slaughter in Ireland. This change in the nature of Irish cattle disposals (more slaughter and less live exports) leads to an increase in the volume of Irish beef output. Irish cattle sector output value is higher in the NLE export scenario than under the Baseline. This is despite a small reduction in Irish cattle prices as a result of the live exports ban. However, the additional cattle fattening activities under the no live exports are also associated with additional expenditure on intermediate inputs (feed, fertiliser etc.). The projected increase in input expenditure is

8

Analysis of the economics of BoHV-1 infection in Ireland

sufficient to more than offset the higher cattle output value projected under the NLE scenario and this is projected to leave aggregate agricultural sector income 2% lower under NLE scenario than under the Baseline. The projected magnitude of the loss in agricultural sector income derived using the FAPRI-Ireland model is subject to caveats that reflect the nature of the FAPRI-Ireland model. The model is a Partial equilibrium model of the agricultural economy and cannot provide insights on the incidence of loss within the Irish cattle sector. The FAPRI-Ireland model does not distinguish live cattle exports on either an age or breed basis. Other things being equal, the younger the age composition of future Irish live exports and the greater proportion of those exports made up of dairy progeny the higher are the likely costs to the agricultural economy associated with forcing the Irish agricultural sector to bring those animals to slaughter. The FAPRI-Ireland model, like most other PE models of agricultural commodity markets, does not incorporate non-competitive behaviour within supply chains. If the live export trade is critical, as argued by some, to ensuring competitive behaviour on the part of Irish meat processors (i.e. it prevents them from exploiting their market power) then the absence of such competitive pressure could lead to reductions in cattle output prices in excess of those projected by the FAPRI-Ireland model. The FAPRI-Ireland model is a non-spatial model and does not distinguish agricultural commodity exports and imports (including live trade) by destination or source. This is why the scenario analysed – the no live export scenario – assumes all live trade is halted. Live exports of cattle have been dominated by exports to EU markets though exports to non-EU markets have in some years accounted for over 15% of cattle shipped. The prospect of increased live cattle exports to Middle East, North African and Turkish markets represents an important positive element in the short to medium term outlook for the Irish and EU cattle sector. Because these markets are not part of the EU and Article 9 based restrictions on trade are irrelevant. However, these markets’ import licences in general require that cattle imported are from farms that are free of a set of specified animal diseases. Thus the simulated impact of a ban on live exports is a relevant to non-EU as to EU markets in terms of the threat it poses to existing and potential future trade flows. Finally, no account is taken of the impact of Brexit in the sectoral level (or farmsystem level) simulations reported here. The FAPRI-Ireland model was used to assess the economic impact of a ban on live cattle exports as compared to a Baseline where no restrictions on live cattle exports are introduced. The FAPRI-Ireland Baseline prepared in 2015 was used in this analysis and under the Baseline there is no change in the composition of the EU. The analysis was conducted in advance of the UK referendum in June 2016 on whether to remain or leave the EU. The UK vote to leave the EU and the expected triggering of Article 50 of the Treaty on European Union (TEU) and the expected exit of the UK from the EU at some point in 2019 will fundamentally change the nature of the trading relationship between Ireland, the UK and the EU. The €50m cost in foregone income that could arise because of the absence of an IBR control or eradication programme in Ireland are additive to the farm level costs associated with the biophysical effects of BoHV-1. It has not been possible to estimate an aggregate of these biophysical costs for Irish beef production, but the costs on Irish dairy farms of BoHV-1 are estimated to aggregate to over €60m per annum. The potential overall costs to the Irish economy of BoHV-1 and the absence of an IBR eradication or control programme could be in excess of €100 m per annum.

9 Animal Health Ireland | Teagasc

EXECUTIVE SUMMARY

References Boardman, A.E., Greenberg, D.H., Vining, A.R. and Weimer, D.L. 2006. CostBenefit Analysis: Concepts and Practice , 3rd edition, Upper Saddle River, New Jersey: Pearson Prentice Hall. Crosson, P., O’Kiely, P., O’Mara, F.P. and Wallace M. 2006. The development of a mathematical model to investigate Irish beef production systems. Agricultural Systems 89:349-370. Donnellan, T. and Hanrahan, K. 2014. “Greenhouse Gas Emissions from Irish Agriculture: Projections to 2030” http://www.tnet.teagasc.ie/fapri/downloads/pubs2014/emissionprojections310114.pdf Drèze, J. and Stern N. 1987. ‘The Theory of Cost-Benefit Analysis’, Chapter 14 in Auerbach A.J. and Feldstein M. (eds.), Handbook of Public Economics , North-Holland: Elsevier Science Publishers. European Economic Communities. 1964. Council Directive 64/432/EEC of 26 June 1964 on animal health problems affecting intra-Community trade in bovine animals and swine. Official Journal of the European Communities OJ 1977/64. http://data.europa.eu/eli/dir/1964/432/oj European Commission (2004) Commission Decision of 15 July 2004 implementing Council Directive 64/432/ EEC as regards additional guarantees for intra-Community trade in bovine animals relating to infectious bovine rhinotracheitis and the approval of the eradication programmes presented by certain Member States (notified under document number C(2004) 2104)(Text with EEA relevance). Commission Decision 2004/558/EC. OJ L24, Vol 47, 23 July 2004. http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L:2004:249:TOC Sayers, R.G. (2017) Associations between exposure to bovine herpesvirus 1 (BoHV-1) and milk production, reproductive performance, and mortality in Irish dairy herds. Journal of Dairy Science 100(2):1340-1352. Shalloo, L., Dillon, P.G., Rath, M. and Wallace, M. 2004. Description and Validation of the Moorepark Dairy System Model. Journal of Dairy Science 87(6):1945-1959.

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Analysis of the economics of BoHV-1 infection in Ireland

2 Costs Associated with IBR Status on Irish Dairy Farm L. Shalloo 1 and R. Sayers 1 1 Teagasc, Animal & Grassland Research and Innovation Centre, Moorepark, Fermoy, Co Cork.

Introduction Infectious bovine rhinotracheitis (IBR), caused by bovine herpesvirus 1 (BoHV-1), is a highly contagious viral disease of cattle (Muylkens et al., 2007). It has a worldwide distribution and significant efforts have been made, particularly in EU countries, to control and eradicate BoHV-1 (Ackerman and Engels, 2006). The importance of a disease can be characterised by its economic consequences and the primary motivation for eradication of BoHV-1 from livestock populations is its reported impact on the economic success of farming enterprises. Clinical signs of infection include abortion (Givens and Marley, 2008; Graham et al., 2013), sub-optimal fertility, respiratory disease, reduced milk production, and increased mortality under experimental conditions (Bowen et al., 1985; Chiang et al., 1990; Miller et al., 1991) and natural field infection (Hage et al., 1998;; Nandi et al., 2009; Raaperi et al., 2012; Moeller et al., 2013). More specifically, Hage et al. (1998) described a significant decrease in milk production of 9.52kg over a 14-day infectious period in BoHV-1 seronegative animals that became infected with the virus. Raaperi et al. (2012) highlighted that herds with a BoHV-1 within-herd seroprevalence of between 1 and 49%, have a higher risk of abortion (Odds Ratio = 7.3). Moeller et al. (2013) reported that 2% of calves submitted for necropsy to the California Animal Health and Food Safety Laboratory in Tulare, California over a six year period had lesions consistent with systemic BoHV-1 infection. Although sub-optimal performance due to infection with BoHV-1 has been reported widely, it should be noted that many studies have yielded contradictory results. Reproductive losses, for example, were not found to be associated with exposure to BoHV-1 in beef herds (Waldner, 2005; Waldner and Kennedy, 2008) or in a dairy herd during a subclinical BoHV-1 infection (Hage et al., 1998). These contradictory publication findings are most likely due to the timing of infection, differences in the type of cattle herds being investigated (beef versus dairy), and livestock management systems operating. This stresses the importance of completing investigations specific to a particular region and livestock system. The Republic of Ireland (hereafter referred to as Ireland), is a net exporter of agricultural produce, with over 90% of dairy produce exported (Geary et al., 2010). The majority of Irish dairy farmers operate a pasture-based system. Irish dairy cows graze pasture for approximately 10 months of the year (Drennan et al., 2005). Limited

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COSTS ASSOCIATED WITH IBR STATUS ON IRISH DAIRY FARMS

data are available on the impact of BoHV-1 in such a system, and it is important to examine whether the impact of BoHV-1 in Ireland is similar to that reported previously in more intensive livestock systems. Prevalence estimates of BoHV-1 exposure can be established using bulk milk analysis. A recent Irish study (Sayers et al., 2015) outlined a bulk milk seroprevalence in Irish dairy herds of 80%. The same study highlighted that 8.2% of the study herds contained at least one BoHV-1 seropositive weanling of over 180 days of age and 6.1% of herds studied contained at least one BoHV-1 seropositive weanling of over 270 days of age. The objectives of the current study were to use these Irish BoHV-1 prevalence data to document associations between milk production, fertility performance, mortality, economic performance and viral status. Data Selection of herds for this 2009 study has previously been described, as has their BoHV-1 status (Sayers et al., 2015). Briefly, members of HerdPlus® (a breeding information tool) recorded on the Irish Cattle Breeding Federation’s (ICBF) database were used as the sample population. This population had 3,500 members in 2009. Stratified proportional random sampling based on herd size and geographical location was used to select farmers from this population for participation in the study. Of the 500 farmers invited to participate, a total of 312 were eventually recruited on a voluntary and non-incentivised basis. Over the 2009 lactation, four bulk milk samples (taken on the 23rd March, 8th June, 31st August and 2nd November) were submitted by each study farm. Commercially available enzyme linked immunosorbent assay (ELISA) kits were used to test bulk milk samples for the presence of antibodies against, (i) Ultrapurified IBR lysate (Institut Pourquier, France) in unvaccinated (UV) herds and, (ii) IBR gE, (IDEXX laboratories, USA) in vaccinated (V) herds. Kit manufacturer positive cut-off values were applied, as outlined in Table 1, to classify herds as bulk milk positive (Pos) or negative (Neg). Analyses were completed by commercial accredited laboratories; IBR lysate by National Milk Laboratories Ltd. (UK), and IBR gE by Enfer Diagnostics Ltd. (Ireland). Data relating to on-farm vaccination protocols were collected by questionnaire from each participating farmer. On the basis of this self-reported information, herds were classified as vaccinated (V) or unvaccinated (UV). A complete set of test results and vaccination data were not available for seven herds and production data were therefore sought for 305 herds for inclusion in the analysis. A complete set of BoHV-1 prevalence and vaccination data were available for 305 herds, 12% (n=36) of which were vaccinated, and 80% (n=244) of which recorded bulk milk positive results (Sayers et al., 2015). Only a single vaccinated herd recorded a negative bulk milk result. Study herd demographic and performance data have previously been described by O’Doherty et al. (2015). Briefly, farm herd size ranged from 28 to 540 cows, the average herd size of the study population being 101 cows. The average daily milk yield per cow (305-day milk yield) of Primiparous (PP) cows in these herds in 2009 was 4,628 kg (SD 825 kg), with average fat and protein yields of 210 kg (SD 32 kg) and 177 kg (SD 29 kg), respectively. Multiparous (MP) cows had an average milk yield of 6,073 kg (SD 884 kg) and average fat and protein yields of 252 kg (SD 34 kg) and 220 kg (SD 30 kg), respectively. The average somatic cell count (SCC) of MP cows (211,000 cells per mL) was almost double that of PP cows (128,000 cells per mL) although the ranges of SCC were similar (PP range 39,000-716,000 cells per mL and MP range 59,000-896,000 cells per mL).

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Analysis of the economics of BoHV-1 infection in Ireland

Table 1. ELISA kits used to test bulk milk samples for anti-BoHV-1 antibodies in vaccinated and unvaccinated study herds.

BoHV-1 antigen target (Kit manufacturer) Ultrapurified IBR lysate (Institut Pourquier, France)

BoHV-1 herd vaccination status

Within-herd prevalence detectable

Positive cut-off value

Sensitivity

Specificity

≥ 25 %S/P 1

100%

99.6% 10.0 – 15.0% 3

Unvaccinated

≤ 0.8 S/N ratio 2

IBRgE, (IDEXX Laboratories, USA)

Vaccinated

72.0 – 88.4% 100%

Not available

1 %S/P = (OD 450 of sample – OD 450 of negative control) /(mean OD 450 of positive control – OD 450 of negative control) x100 2 S/N ratio = (sample mean – absorbance 650 nm)/negative control mean 3 Wellenberg et al. (1998) and Kramps et al. (2004).

On average there were six cases of neonatal mortality, four cases of young-calf mortality, and four cases of adult-cow mortality in each study herd in 2009. The mean mortality rate for neonatal and young-calf mortality as a percentage of calves born was 5.2% and 3.4%, respectively. Model The Moorepark Dairy Systems Model (MDSM) (Shalloo et al., 2004), a stochastic budgetary simulation model was used to simulate a model farm integrating biological data. The model was used in this study to quantify the economic implications of BoHV-1 status on farm profitability at different milk prices. The MDSM integrates animal inventory and valuation, milk production, feed requirement, land and labour utilization and economic analysis. Feed requirements were calculated by the MDSM meeting the net energy requirements for maintenance, milk production, and body weight (BW) change across lactation (Jarrige, 1989) minus energy requirements supplied through concentrate supplementation. Variable costs (fertilizer, contractor charges, medical and veterinarian, artificial insemination, silage and reseeding), fixed costs (machinery maintenance and running costs, farmmaintenance, car, telephone, electricity and insurance) and sales values (milk, cull cow and calf) were based on the most up to date costs and prices (2016). Scenarios analysed Using the MDSM model (Shalloo et al., 2004) herds were defined as BoHV-1 negative and positive and compared against each other. The herds were compared across three base milk prices of 24.0, 29.0 and 34.0 € cents per litre (€ c/l), assuming reference milk contents of 33.0 g/kg protein and 36.0 g/kg fat and a relative milk constituents price ratio of 1:2 for fat: protein, within a multiple component (A+B-C) milk payment pricing regime. Table 2 shows the key assumptions used in the model for the two BoHV-1 scenarios examined. All calves were sold at 1 month of age. All male and female calves were assumed to be sold for market values of

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COSTS ASSOCIATED WITH IBR STATUS ON IRISH DAIRY FARMS

€50 and €300, respectively. Replacement females were bought for €1,545 per head based on market conditions 1 month prior to calving. Labour costs were calculated based on the methodology reported by Shalloo et al. (2004) which assumes a labour requirement of 30 hours per cow per year, with 1,848 hours considered equal to one labour unit per year, giving an annual cost of €22,855 per labour unit.

Results Production effects

There was a statistically significant (P value <0.1) reduction in milk yield, protein kg, fat kg in seropositive herds and a statistically significant (P value <0.1) increase in replacement rates and the number of carryover cows (cows not calved 2009) within the herds that tested positive for BoHV-1 (Table 3). Fuller details of the associations between BoHV-1 infection and milk production, reproductive performance and mortality in Irish dairy cow herds can be found in Sayers (2017). Economic effects Milk volume and milk solid sales in herds classified as BoHV-1 positive were each 4% less when compared to negative herds (Table 4 and 5). Milk receipts on farms classified as BoHV-1 positive were 4% lower irrespective of milk price, while livestock sales increased in the BoHV-1 positive herds due to higher replacement rates. Overall total costs were similar irrespective of BoHV-1 disease status, however, there were differences in individual cost items (and costs composition). In terms of profitability, herds that were BoHV-1 positive had a lower overall level of net profitability (Table 4). At the 29cpl net profit was 22% lower per farm, per cow, per kg MS and per hectare. The corresponding reduction in profit at a price of 34cpl was 12%. At 29cpl profitability was reduced by €60 per cow per annum when the herd was classified as BoHV-1 positive.

Table 2. Assumptions used in the model farm for effect of IBR status on herd profitability. Gross milk price, € c/l Average 29.0 Low 24.0 High 34.0 Labour costs, €/year 22,860 Replacement heifer costs, €/head 1,545 Reference cull cow price, €/head 451 Reference male calf price, €/head 50 Concentrate costs, €/tonne 270 Land rental cost, €/ha 450

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Analysis of the economics of BoHV-1 infection in Ireland

Table 3. Contrast of Predictive Margins for Fertility, milk production and mortality parameters across Unvaccinated (UV) Positive (Pos) and Negative (Neg) BoHV-1 Bulk Milk Herds.

Contrast of predictive margin

Production Parameter Variables compared

CI (95%)

P value

Herd milk yield (Kg)

UV Pos vs . UV Neg

-197.56

-431.39, 36.27

0.098

MP milk yield (Kg)

UV Pos vs . UV Neg

-245, 99

-490.30,-1.67

0.048

Herd fat yield (Kg)

UV Pos vs . UV Neg

-9.02

-18.62, 0.58

0.065

MP fat yield (Kg)

UV Pos vs . UV Neg

-10.73

-20.79,-0.68

0.036

MP protein yield (Kg) UV Pos vs . UV Neg Cows not calved 2009 (%) UV Pos vs . UV Neg

-8.07

-16.76, 0.62

0.069

0.55

0.10, 0.64

0.007

Number of calves per cow per year* UV Pos vs . UV Neg

-0.03

-0.06, 0.00

0.053

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COSTS ASSOCIATED WITH IBR STATUS ON IRISH DAIRY FARMS

Table 4. Milk production receipts and costs for farms with different IBR status. Feed system IBR Negative IBR Positive

Herd size, no. cows

80

80

Stocking rate, no. cows/ha

2.07

2.11

Milk sales, kg

399,342

383,084

Fat plus protein sales, kg

30,036

28,813

Milk receipts, €/farm

at 24 € c/l milk price

105,000

100,725

at 29 € c/l milk price

126,966

121,796

at 34 € c/l milk price

148,977

142,911

Livestock sales, €/farm

30,112

30,359

Concentrate feed, €/farm

15,269

15,235

Fertilizer, €/farm

10,860

10,598

Contractor, €/farm

6,057

6,006

Veterinary, €/farm

7,631

7,632

Labour, €/farm

21,700

21,633

Depreciation, €/farm

18,288

18,252

Replacement costs, €/farm

30,987

31,682

Land rental, €/farm

-2,433

-2,828

Total costs

per farm, €/farm

135,645

135,467

per cow, €/cow

1,696

1,693

per kg milk fat plus protein, €/kg

4.52

4.70

per ha, €/ha

3,391

3,387

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Analysis of the economics of BoHV-1 infection in Ireland

Table 5 . The effect of IBR status and base milk price on farm system profitability.

Feed System

IBR Negative

IBR Positive

Net profit at 29 € c/l milk price per farm , €/farm

21,489

16,743

per cow, €/cow

269

209

per kg milk fat plus protein, €/kg

0.72

0.58

per ha, €/ha

537

419

Net profit at 24 € c/l milk price per farm , €/farm

-617

-4,463

per cow, €/cow

-8

-56

per kg milk fat plus protein, €/kg

-0.02

0.15

per ha, €/ha

-15

-112

Net profit at 34 € c/l milk price per farm , €/farm

43,640

37,992

per cow, €/cow

546

475

per kg milk fat plus protein, €/kg

1.45

1.32

per ha, €/ha

1,091

950

Conclusions The BoHV-1 status of a herd has a significant effect on the performance (Sayers, 2017) and profitability characteristics basedon Irishherddata. On average across threedifferentmilk prices the averageprofitability was reduced by approximately €60 per cow per year when herds were classified as seropositive for BoHV-1. When scaled up to an overall industry level with the assumption of 1.296 million cows nationally and an 80% herd-level prevalence it can be concluded that BoHV-1 is costing the Irish dairy industry approximately €62 million annually.

17 Animal Health Ireland | Teagasc

COSTS ASSOCIATED WITH IBR STATUS ON IRISH DAIRY FARMS

References Ackerman, M., and M. Engels. 2006. Pro and contra IBR-eradication. Vet. Microbiology . 113: 293-302. Bowen, R.A., R.P. Elsden, G.E Seidel Jr. 1985. Infection of early bovine embryos with bovine herpesvirus 1. Am. J. Vet. Res. 46:1095-1097. Chiang, B.C., P.C. Smith, K.E. Nusbaum, D.A. Stringfellow. 1990. The effect of infectious bovine rhinotracheitis vaccine on reproductive efficiency in cattle vaccinated during oestrus. Theriogenology 33:1113-1120. Drennan, M.J., A.F. Carson, S. Crosse. 2005. Overview of animal production frompastures in Ireland. Pages 19-35 in Utilisation of grazed grass in temperate animal systems. Proc. of Satellite workshop of the 20 th International Grassland Congress, Cork, Ireland. Geary, U., N. Lopez-Villalobos, D.J. Garrick, L. Shalloo. 2010. Development and application of a processing model for the Irish dairy industry. J. Dairy. Sci. 93:5091-5100. Givens, M.D. and M.S.D. Marley. 2008. Infectious causes of embryonic and foetal mortality. Theriogenology 70:270-285. Graham, D.A. 2013. Bovine herpes virus-1 (BoHV-1) in cattle- a review with emphasis on reproductive impacts and the emergence of infection in Ireland and the United Kingdom . Ir. Vet. J. 66:15. Hage, J.J., Y.H. Schukken, T.H. Dijkstra, H.W. Barkema, P.H.R. van Valkengoed, G.H. Wentink. 1998. Milk production and reproduction during a subclinical bovine herpesvirus 1 infection on a dairy farm. Prev. Vet. Med. 34:97-106. Jarrige, R. (Editor). 1989. Ruminant nutrition, Recommended allowances and feed tables. John Libbey Eurotext, Montrougue, France. Kramps, J. A., M. Banks, M. Beer, P. Kerkhofs, M. Perrin, G. J. Wellenberg, and J. T. Van Oirschot. 2004. Evaluation of tests for antibodies against Bovine Herpesvirus 1 performed in national reference laboratories in Europe. Vet. Microbiol. 102:169–181. Miller, J.M., C.A. Whetstone, M.J. Van der Maaten. 1991. Abortifacient property of bovine herpesvirus type 1 isolates that represent three subtypes determined by restriction endonuclease analysis of viral DNA. Am. J. Vet. Res. 52:458-461. Moeller Jr., R.B., J. Adaska, J. Reynolds, P.C. Blanchard. 2013. Systemic bovine herpesvirus 1 infections in neonatal dairy calves. J. Vet. Diagn. Invest . 25:136-141. Muylkens, B., J. Thiry, P. Kirten, F. Schynts, E. Thiry. 2007. Bovine herpesvirus 1 infection and infectious bovine rhinotracheitis. Vet. Res. 38:181-209. Nandi, S., M. Kumar, M. Manohar, R.S. Chauhan. 2009. Bovine herpes virus infections in cattle. Anim. Health. Res. Rev. 10:85-98. O’ Doherty, E; Sayers, R; O’ Grady, L; Shalloo, L. 2015. Effect of exposure to Neosporacaninum, Salmonella, and Leptospira interrogans serovar Hardjo on the economic performance of Irish dairy herds. J. Dairy. Sci. 98 4 2789.

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Analysis of the economics of BoHV-1 infection in Ireland

Raaperi, K., S. Bougeard, A. Aleksejev, T.Orro, A. Viltrop. 2012a. Associationof herdBRSVandBHV-1seroprevalence with respiratory disease and reproductive performance in adult dairy cattle. Acta Vet. Scand. 54:4. Sayers, R.G. (2017) Associations between exposure to bovine herpesvirus 1 (BoHV-1) and milk production, reproductive performance, and mortality in Irish dairy herds. Journal of Dairy Science 100(2):1340-1352. Sayers, R.G., N. Byrne, E. O’Doherty, S. Arkins. 2015. Prevalence of exposure to bovine viral diarrhea virus (BVDV) and bovine herpesvirus-1 (BoHV-1) in Irish dairy herds. Res. Vet. Sci. 100:21-30. Shalloo, L., Dillon, P.G., Rath, M. and Wallace, M. 2004. Description and Validation of the Moorepark Dairy System Model. J. Dairy. Sci. Vo. 87, No. 6, 2004 1945-1959 Waldner, C.L. 2005. Serological status for N. caninum, bovine viral diarrhea virus, and infectious bovine rhinotracheitis virus at pregnancy testing and reproductive performance in beef herds. Anim. Reprod. Sci. 90:219-242. Waldner, C.L. and R.I. Kennedy. 2008. Associations between health and productivity in cow-calf beef herds and persistent infection with bovine viral diarrhea virus, antibodies against bovine viral diarrhea virus, or antibodies against infectious bovine rhinotracheitis virus in calves. Am. J. Vet. Res. 69:916-927. Wellenberg, G. J., E. R. A. M. Verstratem, M. H. Mars, and J. T. van Oirschot. 1998. ELISA detection of antibodies to glycoprotein E of bovine herpesvirus 1 in bulk milk samples. Vet. Rec. 142:219–220.

19 Animal Health Ireland | Teagasc

3 Prevalence of bovine herpesvirus 1 (BoHV-1) in spring calving suckler herds on the island of Ireland and a bioeconomic analysis of the impact on herd profitability

M.H. Parr 1 , D. Barrett 2 , R. Lynch 1 , P. Crosson 1 and D.A. Kenny 1 1 Teagasc, Animal & Grassland Research and Innovation Centre, Grange, Dunsany, Co. Meath; 2 Department of Agriculture, Food and the Marine, Backweston, Co. Kildare.

Introduction - ‘BeefCow’ research programme ‘BeefCow’ is a large Department of Agriculture, Food and the Marine (DAFM) funded all-Ireland beef cow fertility research programme, led by Teagasc Grange and involving University College Dublin (UCD), Irish Cattle Breeding Federation (ICBF), Agri-Food and Biosciences Institute in Northern Ireland (AFBI-NI) and the Irish Farmers Journal (IFJ). The aim of the project, which is on-going, is to examine a range of factors affecting the fertility of beef heifers and cows. One of the main elements of this research programme was to conduct a comprehensive epidemiological study on the key factors affecting reproductive efficiency of commercial beef cow herds, with particular emphasis on the prevalence and impact of the pathogens leptospirosis (hardjo bovis), bovine viral diarrhoea virus (BVDV), bovine herpesvirus 1 (BoHV-1) and Neospora caninum . Results relating to the seroprevalence of BoHV-1 (causative agent for infectious bovine rhinotracheitis) will be discussed in this brief report. Specifically, the main objectives of this aspect of the study were to determine: (i) the seroprevalence of BoHV-1 in beef cow herds on the island of Ireland, (ii) the relationship between BoHV-1 herd status and herd reproductive (calving interval and survival/re-appearance of the cow herd) and productive (mortality and live weight gain of progeny) and, iii) to model the economic implications of herd seroprevalence to BoHV-1. Materials and methods Almost 6,000 cows from 161 spring calving suckler cow herds (Table 6) across the island of Ireland (32 counties) were blood sampled during the summers of 2014 and 2015. A comprehensive survey was also carried out to determine farm management practices including the vaccination policy undertaken in each individual herd in the sample. These herds consisted, principally of those involved in: (i) The Teagasc/Irish Farmers Journal BETTER Farm Beef Programme; (ii) The ABP Beef UK, College of Agriculture, Food and Rural Enterprise (CAFRE) and IFJ sponsored Northern Ireland Suckler Beef Programme (NISBP); (iii) research herds in both the Republic of Ireland (Teagasc) and Northern Ireland (AFBI and CAFRE) and (iv) commercial herds sourced through the Teagasc Advisory service in the Republic of Ireland and AFBI and CAFRE in Northern Ireland.

20

Analysis of the economics of BoHV-1 infection in Ireland

Table 6. Breakdown of participating spring calving herds in the Republic of Ireland (ROI) and Northern Ireland (NI).

Herd type

Number of herds

Number of cows

Teagasc/IFJ BETTER Beef herds (ROI)

17

984

Northern Ireland Suckler Beef Programme herds (NI)

8

349

Research herds (ROI &NI)

5

392

Commercial herds (ROI & NI)

131

4,212

Total

161

5,937

A questionnaire was completed with all herd owners enrolled in the study to determine the vaccination status of each herd for BoHV-1 (and other pathogens). Seroprevalence of BoHV-1 in vaccinating herds was measured using a commercially available BoHV-1 gE Antibody Kit. Seroprevalence in non-vaccinating herds was tested for using a commercially available BoHV-1 gB Antibody Kit. All analyses were conducted by the DAFM Regional Veterinary Laboratory Service. For the purposes of the analyses conducted a seropositive herd was defined as a herd harbouring at least one seropositive case of BoHV-1. BoHV-1 gE antibody kit Sera from cows in vaccinating herds were screened using a commercially available BoHV-1 gE Antibody Kit (Idexx Laboratories) without modification. A sample/negative ratio (S/N) of less than 60% was the cut-off for determining positive serum samples. Samples with an S/N of greater than 70 % were considered negative and samples with an S/N greater than 60 % and less than 70 % were considered suspect. The manufacturer reports the sensitivity to be 98.4 %, while the specificity is estimated at 99.8 %. BoHV-1 gB X3 antibody kit Sera from cows in non-vaccinating herds were screened using a commercially available BoHV-1 gB X3 Antibody Kit (Idexx Laboratories) without modification. A blocking % of greater than 55 % was the cut-off for determining positive serum samples. Samples with blocking % of less than 45 % were considered negative and samples with a blocking value of greater than 45 % and less than 55 % were considered suspect. The manufacturer reports the sensitivity to be 100 %, while the specificity is estimated at 99.8 %. Bioeconomic modelling The Grange Beef Systems Model (Crosson et al., 2006; GBSM) was used to model the effect of seroprevalence to BoHV-1 on whole farm physical and financial performance. The GBSM is a bioeconomic model of Irish pasture- based suckler beef systems. The French net energy system (Jarrige, 1989) modified for Irish conditions (O’Mara et al., 1997) is used in GBSM to calculate animal feed requirements. Where the energy consumed in the form of grazed grass or grass silage is unable to meet the animals’ energy requirements within the animals’ intake capacity, supplementary concentrates are fed to meet the energy deficit. Financial performance is calculated as net farm margin. Net farm margin includes all livestock revenues, direct costs and overhead costs. Costs and prices prevailing in 2016 were used to facilitate economic analysis. No subsidy payments (farm support

21 Animal Health Ireland | Teagasc

PREVALENCE OF BOVINE HERPESVIRUS 1 (BOHV-1) IN SPRING CALVING SUCKLER HERDS

payments) are included in revenues. Labour and land costs are not included in direct or overhead costs since it is assumed that family labour is freely available and land is owned; however, a rental charge is included for any land requirement in excess of that owned by the farmer. Animal level prevalence of BoHV-1 was matched to calving interval, calf mortality and average daily gain records for all cows (n = 4,240) and their calves available from the Irish Cattle Breeding Federation (ICBF) database. The definitions assumed for the outcome variables were as follows: Calving Interval : Calving to calving interval was determined from calving records for 2013, 2014, 2015 and 2016 for all cows enrolled on the study. Cows which had a calving to calving interval of less than 300 days were removed from all analyses. Re-Appearance: Re-appearance rate effects were quantified as the percentage of cows that were scanned pregnant (at least 30 days after the end of the breeding season) and calved in the following spring-calving season (up 30 th June). Calf mortality (≤28 days): Calf mortality percentage (including stillbirths) was quantified up to 28 days of age and was determined from recorded pertaining to calf mortality for all calves born to cows enrolled in the study in 2014 and 2015. Calf mortality (29-225 days): Calf/weanling mortality percentage was quantified from 29 days to 225 days of age and was determined from records pertaining to calf mortality for all calves born to cows enrolled in the study in 2014 and 2015. Average daily gain to weaning (225 days): Average daily gain (ADG; kg/day) was determined from live-weight measurements extracted for all calves born to cows enrolled in the study in 2014 and 2015. Age at the time of measurement was accounted for in all statistical analysis pertaining to live-weight measurements. Calves with an ADG of greater than 2.5kg/day were removed from all analyses. Control terms for herd, year, parity, calf sire, calf sex, calf breed (early or late maturing), cow breed (early or late maturing), number of lifetime movements (cows) were also included in the statistical model. These data were then used to generate two scenarios (representing herds that were either entirely seropositive or entirely seronegative to BoHV-1) for a 40 hectare spring calving (mean calving date 15 March) suckler herd using the GBSM (Crosson et al., 2006).

22

Analysis of the economics of BoHV-1 infection in Ireland

Results In order to analyse the within herd seroprevalence, sampled herds were divided into seven regions (Table 7) similar to those outlined by Ryan et al. (2012).

Table 7. Regions in the Republic of Ireland and Northern Ireland. Region Counties 1

Donegal, Leitrim, Sligo, Roscommon

2 3 4 5 6 7

Mayo and Galway

Clare, Tipperary and Waterford

Limerick, Kerry and Cork

Wexford, Kilkenny, Carlow, Wicklow, Laois, Offaly, and Kildare Longford, Cavan, Monaghan, Louth, Meath, Westmeath, Dublin

Northern Ireland

Overall, 90% of herds sampled in the study were classified as being BoHV-1 positive based on the identification of at least one seropositive case within the herd. The within herd seroprevalence of BoHV-1 recorded by region is presented in Table 8. At an individual herd level, the overall mean BoHV-1 seroprevalence was 39.8% (median 38.1%), with seroprevalence ranging from 18.6% in Region 2 (Mayo /Galway) to 52.3% in Region 7 (Northern Ireland). The level of seroprevalence reported for Northern Ireland may be an overestimate, as non-marker vaccines continue to be available on the Northern Irish market and the laboratory analysis used in the current study was not capable of differentiating between seroconversion as a consequence of vaccination or natural exposure to BoHV-1. Table 8. Within herd seroprevalence of BoHV-1 in accordance with geographical location (as per Ryan et al., 2012). Cows tested (n) BoHV-1 Prev. % Geographical region No Herds % BoHV herds Mean Median Mean Median 1 14 90 32.5 30.5 49.2 54.8 2 18 83 23.2 19.0 18.6 10.6 3 16 94 39.5 36.0 48.2 46.3 4 17 76 32.0 31.0 30.6 26.9 5 48 94 38.4 30.5 44.1 48.2 6 26 96 38.7 33.0 36.1 33.1 7 22 100 37.1 38.5 52.3 44.5 Overall 161 90 35.5 30.0 39.8 38.1

23 Animal Health Ireland | Teagasc

PREVALENCE OF BOVINE HERPESVIRUS 1 (BOHV-1) IN SPRING CALVING SUCKLER HERDS

The proportion of herds vaccinating against BoHV-1 by region (as per completed survey response) is shown in Table 9. The overall level of vaccination across all regions was 18.6%. Region 1 had the lowest proportion of herd owners who indicated an active vaccination programme for BoHV-1 (7.1%), whilst the region with the highest proportion of herds vaccinating for BoHV-1 was Northern Ireland (45.5%). In addition to the questionnaire used in this study, the findings of a recent national breeding and reproductive management survey carried out by our group, incorporating data from 537 beef cow herd owners indicates that the level of vaccination in beef cows for BoHV-1 was 15% (Parr et al., 2017, in preparation).

Table 9. Effect of geographic region on proportion of herds vaccinating against BoHV-1. Geographical region Number of herds

Herds vaccinating for BoHV-1 Number %

1

14

1

7.1

2

18

2

11.1

3

16

2

12.5

4

17

2

11.8

5

34

3

8.8

6

40

10

25.0

7

22

10

45.5

Total

161

30

18.6

Only cows (n = 4,240) blood sampled in the Republic of Ireland with accompanying production and mortality measures (supplied by ICBF) were used. As expected, the frequency of seropositivity increased with cow parity (Table 10), which reflects the increased potential for exposure to the pathogen as the animal ages.

Table 10. Prevalence of BoHV-1 according to parity group 1 .

BoHV-1 - Negative

BoHV-1 – Positive

Parity 1

73% (512/699)

27% (187/699)

Parity 2-3

62% (781/1258)

38% (477/1258)

Parity 4-5

56% (918/1628)

44% (710/1628)

Parity ≥6

52% (337/655)

48% (318/655)

1 Only data from cows (n = 4,240) in herds in the Republic of Ireland included.

24

Analysis of the economics of BoHV-1 infection in Ireland

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