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7 Costs of Eliminating Subtherapeutic Use of Antibiotics
Pages 179-187

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From page 179...
... To gauge the cost to consumers of eliminating the subtherapeutic use of antibiotics, the Committee on Drug Use in Food Animals conducted an economic analysis. Under current production practices in the United States, it is difficult to quantify either the probability that subtherapeutic drug use results in human health problems, or the economic value of the current and potential stock of antibiotics.
From page 180...
... The estimated cost measures can be compared among themselves to elucidate the sensitivity of the results to various assumptions and to provide an understanding of the magnitude of the costs. CONSIDERATIONS IN DETERMINING THE EFFECT OF A BAN The best way to determine the economic benefits of subtherapeutic antibiotics is to examine what would occur if the U.S.
From page 181...
... An alternative economic measure would be to enumerate the consequences for farm profits and farm costs. Approximately 100 percent of chickens and turkeys, 90 percent of swine and veal calves, and 60 percent of beef cattle receive diets containing antibiotic drugs during some part of their lives (Manchanda 1994)
From page 182...
... Using a consumer measure also makes sense from an economic perspective, because all changes in production costs must eventually be passed on in output prices in a competitive industry. The effects of a ban on subtherapeutic drug use might need to be offset by technological improvements to obtain equal levels of production.
From page 183...
... Assumptions also must be made on the responses of consumers to higher prices and to any improvement or reduction in the quality of the meat. Attempts have been made in previous economic analyses to allow consumers to respond to higher prices by reducing consumption and to provide potential responses from retailers and meat processors (Allen and Burbee 1972; Dworkin 1976; Mann and Paulsen 1976; CAST 1981; Wade and Barkley 1992; Gilliam et al.
From page 184...
... . Per capita cost is estimated as follows: Per capita Costs = %C × P × Q Where %C is %increase in annual production cost, P is retail price, and Q is annual retail quantity sold per capita.
From page 185...
... Numbers are based on the quantity effects presented in Tables 24 and 25 (that is, a 2.052 percent change in production costs was used) of the CAST report; Column 4: FAPRI 1998; Columns 5–8: Calculated from Columns 2–4.
From page 186...
... For example, the animal health industry invested $381 million in research and development: $355 million was spent for internal research and $26 million was invested in external research, primarily at universities. Seventeen percent of the total research and development investment was allocated to feed additives (Richard Carneval, AHI, 1996, personal communication)
From page 187...
... The total change in FCE was, therefore, calculated at 3.6 percent. Assuming that ration costs equal 70 percent of total production costs, the total change in retail prices represent a 2.5 percent increase.


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