Veterinary costs, productivity and profitability on Norwegian dairy cow and sow farms

TL;DR

This paper explores how veterinary costs relate to productivity and profitability on Norwegian dairy and pig farms, finding that higher veterinary costs are linked to lower income per animal.

Contribution

The study provides new insights into the economic implications of stringent antibiotic regulations on Norwegian livestock farms.

Findings

Higher milk production per cow is associated with increased veterinary costs by 1.1 Euro per additional 100 liters.

Selling more piglets per sow increases veterinary costs by approximately 2.48 Euro per extra piglet.

Norwegian livestock productivity is relatively low compared to other European countries, but profitability is maintained through subsidies.

Abstract

The continuous call for reduced antibiotic use on farms is challenging for farmers without compromising productivity and profitability. In Norway, stringent antibiotic use regulation and disease prevention measures have contributed to achieving the lowest veterinary antibiotic sales in Europe. The aim of this paper is to examine the relationship between veterinary costs (including antibiotic expenditures but also veterinary advice services to support low level of antibiotic use) and farm performance (productivity and profitability) amongst both dairy cow and sow farms in Norway. To examine this relationship, the Farm Accountancy Data Network (FADN) database comprising cross-sectional farm data from 2011 to 2021, was analysed. Average veterinary costs amounted 172 Euro per cow and 84 Euro per sow in 2021. Furthermore, FADN panel data analysis revealed that a higher milk production per cow is associated with higher veterinary costs, namely 1.1 Euro per additional 100 liter per cow. The estimated effect of more piglets sold per sow on veterinary costs amounted approximately 2.48 Euro per extra piglet sold per sow. Dairy and sow farms with higher veterinary costs per animal tend to have lower income per animal. Compared to other European countries livestock productivity is relatively low in Norway while profitability is maintained by means of subsidies easing the need to maximise productivity enabling restrictive antibiotic use.