Measuring the impact of improved animal health practices on the economic efficiency of Irish dairy farms

Cost and production efficiency gains must be achieved across herds if the Irish dairy sector is to prosper in a post-quota environment. As such, improvements in animal health are required and the costs of diseases such as mastitis must be reduced. Elevated levels of somatic cell count (SCC) found in milk are an indicator of the prevalence of clinical and subclinical mastitis in dairy herds. Given an EU regulatory limit of 400,000 (cells/mL) (Council Directive 92/46/EEC), the adverse effect of the disease on milk quality and the increasing practice of milk processors offering financial incentives for reduced cell count levels, the benefits of improved farm management practices resulting in lowered SCC are quantified here at the farm-level. Teagasc National Farm Survey data from over 300 nationally representative Irish dairy farms over a four year period (2008-2011) is utilised in the analysis. Preliminary regression results from a pooled OLS model indicate that a cell count reduction of 100,000 (cells/mL) results in an increase in gross margin of 6% or €87 per cow when all other pertinent factors are controlled for. The efficacy of herd management practices such as milk recording in improving animal health was also confirmed within the model. A cell count reduction of 17% was found as a result of milk recording within the herd, when all other variables were taken into account.