Livestock Pharmaceuticals: A Positive R.O.I.?

A recent Iowa State University study found that in times of high feed costs, such as the cattle industry experienced in 2007, the positive economic impact of pharmaceutical technologies commonly used in beef production increased from 430-dollars per animal to 524 per head. That’s an increase of 22 percent. The previous study was conducted in 2005.

Dr. John Lawrence, PhD and professor of economics at ISU says, - since most of these pharmaceutical technologies improve feed efficiency and/or increase pounds of gain, it should not be surprising that they have a greater impact during times of high feed costs. While the market price for calves and feeder cattle going into the feedlot has decreased as feed costs have increased, Lawrence said, - the price decline would have been larger if stocker operations and feedlots did not use efficiency-improving technologies. If the pharmaceuticals had not been used, Lawrence calculated that the U.S beef industry would have seen - a 14 percent smaller calf crop – a 19 percent reduction in total beef produced – a 11 percent increase in retail beef prices – a 9 percent decrease in beef consumption and a 247 percent increase in beef imports.