PRODUCER INCENTIVES FOR ANTIBIOTIC USE IN U.S. PORK PRODUCTION

Antibiotics have been used in animal production for several decades. Antibiotics are used routinely now in pork production (NAHMS 2002). There is increasing concern about the use of antibiotics in animal production. There is no hard evidence supporting the link of antibiotic use in animals to observations of antibiotic resistance infections in people. Nonetheless a careful examination of the value of continued antibiotic use in agricultural, and in pork production in particular is warranted. Therefore, the objective of our study is to validate the productivity and economic impacts of antibiotic use for pig producers at the farm level. We use data from the NAHMS 2000 swine survey. We estimate the combined affects from antibiotics used for growth promotion (AGP) and antibiotics used for disease prevention (ADP) on 4 productivity measures. We also estimate the economic impact of AGP and ADP for individual pig producers. We estimate these 4 productivity measures using seemingly unrelated regression analysis. We evaluate 4 scenarios which ban antibiotic use, and use a simple synthetic firm partial budget to estimate the economic consequences of these scenarios. We find that pig productivity is improved with AGP, but decreased with ADP. A total ban on AGP would cost pig producers $1,271 in lost profits per 1,020 head pig barn. A total ban on ADP however, would result in pig producers improving profits slightly. This occurs because productivity is negatively influenced by ADP. A ban of both AGP and ADP results in a small loss of producer profits ($376/1,020 head barn) because of the offsetting effects of ADP compared to AGP. Producers have higher profits when AGP and ADP are applied at levels where pig productivity is maximized. In this case, producers gain $4,146 for each 1,020 head barn compared to no antibiotic use