Production diseases can cause substantial economic losses to pig producers in the long term because they have a direct impact on the competitiveness of the pig sector. Improved control of production diseases can both enhance productivity of farming and provide opportunities for concepts which create or add value from quality attributes, such as antibiotic-free or high animal welfare meat.
Producers search for the best interventions to control diseases. Stakeholder consultations carried out by PROHEALTH suggest that pig stakeholders’ preferred ways to control production diseases include interventions such as re-designing housing, provision of enrichment materials for pigs, improved ventilation control, reducing stocking density, vaccination, enhanced monitoring of pigs and housing, adjustments to feed composition, and improved biosecurity and hygiene.
Whether a farmer has incentives to apply a preventive measure depends on multiple factors. Different cases leading to animal health and welfare improvements include the cases where improvements are motivated i) by changes in farm productivity, for instance due to reduced disease incidence, or ii) by additional a price premiums obtainable from the market. The larger unfavorable impact disease has on production parameters such as feed conversion ratio or mortality, the less expensive or the more effective the intervention is, the more likely farmer is to apply the intervention.
Two scenarios under investigation
While good pig health and welfare is highly important in pig farming, there has been little research on how much the prevention of production diseases benefits stakeholders financially. Recently published PROHEALTH results show that especially proper hygiene and biosecurity on pig farming can provide substantial financial benefits to the pig farmers in the EU. However, in a competitive market it may be the consumer who benefits the most.
PROHEALTH utilized a value chain analysis to assess how two different intervention scenarios to mitigate and control production diseases in the intensive pig sector influenced the food chain actors financially. Intervention scenario 1, “improved hygiene in pig fattening”, was based on a pig rearing trial by conducted during the project, which showed that dirty housing and inadequate biosecurity are risk factors for pig health, and that an intervention where hygiene practices were improved, enhanced pig performance and health. Under clean (high hygiene) conditions, the pig group had less weight variation at slaughter, fewer respiratory lesions and produced 22% more meat per pig space unit per year than pigs kept in dirty conditions.
Intervention scenario 2 by contrast focused on enhanced care of piglets and sows in order to improve piglet survival and to reduce piglet mortality. It included measures such as using gilts with superior genetics in relation to disease resistance, providing piglets support for both suckling and thermoregulation, positive handling of sows, and adjustments in the dietary composition of feed offered to problem piglets.
Of the two scenarios, the most beneficial intervention in financial terms was improved hygiene in pig fattening which was estimated to contribute around 50% of the gross margin received under good hygiene scenario. These results show the value of work carried out on farms to maintain high biosecurity and good animal health. The intervention scenario on enhanced care of piglets and sows was also estimated to increase the gross margin, but only by a few percentage points. Hence, improved control of production diseases can, depending on the case, benefit the farmer financially.
When considering the consumer perspective merely through the meat price lens, the first intervention scenario had the potential to reduce the consumer price for pig meat by up to 5% when applied at large, and the second intervention scenario by less than 0.5%.
Enhanced animal health contributes to competitiveness
So what are the implications of this for the competitiveness of farming and for the consumers? In competitive markets, where profit margins are tight and pig farmers struggle to gain adequate income, farmers who fail to apply an appropriate level of hygiene in the house may face significantly increased production costs. Therefore, a farm suffering from disease would need to achieve a higher price in order to cover the additional costs of production and to remain in business. While a few percent increase in the production costs per pig may sound small, it should be pointed out that the farm’s profit margin is only a small proportion of the total cost. Hence, without a rise in the market revenue, increasing production costs may leverage a substantial decrease in the gross margin per pig.
One may also argue that in a competitive market it is ultimately the consumer who benefits from enhanced hygiene and biosecurity and animal welfare when the intervention is applied at large. The benefits to consumer are delivered in many ways. Firstly, improved productivity may be passed on to consumer prices and therefore the consumer will also gain access to less expensive food. In this respect, improved biosecurity and hygiene are highly beneficial to the consumers. Secondly, the microbial quality and safety of meat can be increased when farms are complying with high hygiene standards. This reduces the risks a consumer may face and consumers can benefit economically because of reduced cost burden of food-borne diseases.
Thirdly, animal welfare is improved and this provides benefits to the consumers. Animal welfare was particularly relevant in the second intervention scenario, which added value through food quality attributes. There is plenty of evidence, including a meta-analysis conducted by PROHEALTH, that the consumers are willing to pay for various quality attributes of meat. Meta-analyses have shown that the consumers are willing to pay some 10–15% extra for products which have been produced by taking animal welfare into account, although the exact figure varies by how the welfare attribute is formulated.
Changing emphasis from quantity to quality
Changing emphasis from volume to value and increasing the market penetration of concept-based production, could help to build public trust and how the public value intensive livestock production systems. The findings of PROHEALTH are relevant to recent policy discussions within the European Union, where the promotion of animal welfare labelling has been on the table. Labelling is an important way to convey information to the consumers. For a successful labelling it is important to structure the marketing concept so that it enhances animal health and welfare, it is credible and verifiable and that the consumer is willing to pay for the attributes that are promoted by the label.
How citizens value animal welfare and what they think about it depends on factors such as their cultural background, education, profession and familiarity with livestock production. Consumers are a heterogeneous group and there are different views also between individual consumers. This creates room for different concepts to emerge.
Jarkko Niemi, Richard Bennett, Beth Clark, Lynn Frewer, Philip Jones, Thomas Rimmler, Richard Tranter. (2020). A value chain analysis of interventions to control production diseases in the intensive pig production sector. PLoS ONE 15(4): e0231338. https://doi.org/10.1371/journal.pone.0231338
Jarkko K. Niemi (2020). Animal welfare and farm economics. An analysis of costs and benefits. pp 68-116 in: Bouda Vosough Ahmadi, Dominic Moran, and Rick B. D’Eath (eds.) (2020). The economics of farm animal welfare : theory, evidence and policy / https://lccn.loc.gov/2019056038.