Assessment of the Economic Impact of Porcine Reproductive and Respiratory Syndrome Virus on U.S. Pork Producers

An economic analysis published in 2005 estimated that productivity losses from clinical porcine reproductive and respiratory syndrome (PRRS) virus infections cost U.S. pork producers $560 million dollars annually. Since the 2005 study, pig production and health strategies have evolved, PRRS virus control/elimination strategies have improved, and structural adjustments have occurred in the industry. Because of these developments, it was reasonable to question whether the incidence, severity, and/or impact of PRRS outbreaks on pig health and productivity in the U.S. herd may have changed since the 2005 study was conducted.

The primary objective of the 2011 study was to estimate the current economic impact of PRRS virus in the U.S., taking into account the noted changes in the industry. The secondary objective of the study was to conduct an economic analysis of PRRS virus elimination from a herd. The information obtained from this analysis will provide data useful for veterinarians and producers responsible for the control and/or elimination of PRRS virus at the herd, local, regional, and national levels and for use by decision makers responsible for the allocation of resources for swine health research. Furthermore, the information will help producers and veterinarians make better decisions when considering strategies to control or eliminate PRRS virus from individual herds.

To initiate the study, a review of the literature was done to collect all information available in the public domain on the economic impact of PRRS virus. Thereafter, data for the economic analysis was compiled from several sources: (1) swine health surveillance data collected by the USDA National Animal Health Monitoring System (NAHMS) from commercial U.S. pork producers; (2) a survey of swine veterinary experts on the incidence and impact of clinical PRRS on pig production efficiency; and (3) a survey of production records recorded during the period 2005 to 2010 from commercial farms with known PRRS virus status.
 
The economic impact of productivity losses attributed to PRRS virus was estimated separately for breeding and the growing pig herds. Other PRRS virus-related losses evaluated included veterinary costs and other costs that may be attributed to the disease, such as those associated with enhanced biosecurity and changes to pig flow to reduce the impact of PRRS.

 

To manage the confounding effects of time post-outbreak on the analysis of productivity losses, breeding herds were categorized both by their current PRRS status and whether they had experienced a PRRS outbreak in the previous 12 months. That is, productivity and cost estimates were estimated in herds with outbreaks on a 12-month basis in order to capture the immediate effects of acute outbreaks on productivity, as well as the lingering, chronic effects of endemic PRRS. The PRRS herd classification definitions developed by the American Association of Swine Veterinarians (AASV) and the United States Department of Agriculture PRRS Coordinated Agricultural Program (PRRS-CAP) were used in categorizing herds. “PRRS virus-infected” breeding herds included herds that met the AASV/PRRS-CAP criteria for category I (positive unstable) or category II (positive stable) breeding herds. “PRRS virus-free” breeding herds included those that met the AASV/PRRS-CAP criteria for category III (provisional negative) or category IV (negative) herds. Once classified as PRRS virus-infected or PRRS virus-free using the AASV/PRRS-CAP criteria, herds were further categorized by whether they had an outbreak within the last 12 months. A herd was categorized as BH-A if it was PRRS virus-free, BH-B if it had experienced a PRRS outbreak within the last 12 months but was PRRS virus-free when the outbreak occurred, BH-C if it was PRRS virus-infected and had not experienced a PRRS outbreak in the previous 12 months or BH-D if it had experienced a PRRS outbreak within the last 12 months and was PRRS virus-infected when the outbreak occurred. The PRRS category assigned to a breeding herd may change over time.

 Since most growing pigs in the U.S. are raised in groups, rather than in a continuous flow setting, a simpler means of categorizing growing pigs by their PRRS status was devised. Groups of growing pigs were stratified into three categories according to their PRRS status at placement and at the time of marketing. GP-A groups were PRRS negative at weaning and remained negative until marketing, GP-B groups were PRRS negative at weaning, but became infected sometime prior to marketing, and GP-C groups were PRRS positive at weaning and remained positive throughout the growing period.

 

Similar to the 2005 cost of PRRS study, a partial budgeting approach was utilized to determine the cost of productivity losses due to the disease in the U.S. industry. This approach had the advantage of producing a result that was directly comparable to the 2005 cost estimate. To avoid the effect of farm-to-farm variation in prices, capital expenditures, and variable input costs, standard values were used in the budgeting model.

The budgeting model was applied to each of the breeding herd categories (BH-A, B, C, D) using estimates for productivity measures obtained from the survey of production records. An estimate of the percent of breeding herds in each category was obtained from the expert opinion survey. For the breeding herd, a “CURRENT” scenario was defined as the average outcome for all four categories, weighted according to the percentage of swine breeding herds in each PRRS category. The “WO PRRS” scenario assumed 100 percent of breeding herds in the U.S. were in category BH-A (PRRS virus-free herds). A similar approach was applied to each of the growing pig herd categories (GP-A, B, C). Estimates of productivity measures obtained from the survey of production records for each growing pig herd category were used in the budgeting model. An estimate of the percent of groups of growing pigs in each category was obtained from the expert opinion survey. The CURRENT scenario was defined as the average outcome for all three categories weighted according to the percentage of groups of pigs in each category. The WO PRRS scenario assumed 100 percent of groups in the U.S. were in category GP-A (negative at placement and at closeout).

 

The total annual loss from PRRS in U.S. breeding herds was estimated at $302.06 million, i.e., $52.19 per breeding female or $2.36 per pig weaned. The majority of the loss in the breeding herd was due to reduced revenue ($300.4 million) resulting from weaning 8.3 million fewer pigs. Combining the losses in the breeding and growing pig herds resulted in 9.9 million fewer pigs, or 2.41 billion fewer pounds of pork (carcass weight), sold per year in the U.S. The estimated annual loss in the growing pig herd was $361.8 million or $62.52 per breeding female. As in the breeding herd, lost revenue of $1.62 billion, rather than increased cost, was the primary source of losses attributed to PRRS. With PRRS, costs were lowered by $1.25 billion because fewer pigs and pounds of pork were produced, thereby partially offsetting the lost revenue.

In summary, the present study estimated the total cost of PRRS in the U.S. national breeding and growing pig herd at $664 million annually ($1.8 million per day); an increase of approximately $104 million from the $560 million annual cost estimated in 2005. The 2011 study differed most significantly from the 2005 study in the allocation of losses between the breeding and the growing pig herd. Specifically, losses in the breeding herd accounted for 12% of the total cost of PRRS in the 2005 study compared to 45% in the current analysis. Differences between the 2005 and the 2011 studies may be attributed to changes in the prevalence of PRRS virus and incidence of outbreaks, production and animal health management practices, inflation and other pathogens that have emerged since 2005 such as porcine circovirus type 2 (PCV2).

 

In addition, information on veterinary costs, biosecurity costs, and other costs from the survey of expert opinion were used to estimate an annual costs attributed to PRRS virus. The additional veterinary costs were estimated to be $140.11 million annually. The annual biosecurity and other outbreak related costs attributed to PRRS were estimated to be $191.86 million and $145.82 million, respectively. The total additional costs attributed to PRRS for veterinary, biosecurity and other outbreak related costs were $477.79 million annually.

 
A substantial number of U.S. swine farms are currently PRRS virus-free. Based on October 1, 2010 data, it was estimated that 28 percent of the breeding females in the U.S. were in PRRS virus-free herds (BH-A). Forty-two percent of all breeding females were in herds that had a PRRS outbreak in the 12 months prior to October 1, 2010 (BH-B and BH-D), 6 percent were PRRS virus-free before the outbreak (BH-B) and 36 percent PRRS virus-infected before the outbreak (BH-D).

For the year ending October 1, 2010, 60 percent of weaned pigs in the U.S. were estimated to be negative at placement, 25 percent were negative at weaning and remained negative through marketing (GP-A) and 35 were negative at weaning but became infected before they were marketed (GP-B). Forty percent of weaned pigs were positive at placement (GP-C). Of the pigs that were negative at placement, 58 percent were infected before they were marketed.

In breeding herds that had an outbreak, productivity and economic losses in the 12 months after the outbreak were greater when the herd was PRRS virus-free before the outbreak compared to those that were PRRS virus-infected. The timing of infection in growing pigs affects how the pigs performed. Productivity was better in groups of growing pigs that were infected after weaning (GP-B) than those infected before (GP-C).

A net present value (NPV) analysis was performed to evaluate PRRS virus elimination from individual herds. The NPV analysis conducted for this study is the first analysis of which the authors are aware that accounts for the more severe negative production and economic consequences of a PRRS outbreak when a PRRS virus-free herd becomes reinfected. Two approaches to eliminating PRRS virus from a herd were evaluated: (1) complete depopulation and repopulation (CDR) of the herd with PRRS virus-free breeding animals and (2) herd closure and rollover (HCR). When HCR was the method of elimination, the time herds needed to remain PRRS virus-free to break even on the cost of elimination ranged from 4 months to 26 months. When CDR was the method of elimination, the time herds needed to remain PRRS virus-free to break even ranged from 18 to 83 months.