What Else is BRD in Your Cattle Herd Costing You?

Considering the multidimensional impact and costs of BRD

At a glance 

We can often underestimate the short-, medium- and long-term costs of BRD by only considering the direct animal health costs instead of the more substantial impacts it can have across the production system. 

With so many factors impacting the cattle industry and production, from processing facility closures and feed and product supply issues due to COVID-19, to labor shortages, business relationship management, inflation and inclement weather impacts, cattle producers often fall victim to considering each issue separately using partial budgeting instead of taking a holistic approach. When producers manage BRD either one-dimensionally as a cost or two-dimensionally with a partial-budget ROI calculation, it’s possible to undervalue the potential impact of BRD on their operation.   

“Closeout-to-closeout partial-budget economics is a useful business tool that focuses on changes in income and expenses when implementing an alternative but may not be the best option for achieving long-term profitability, sustainability and system wellness,” says Dr. T. Robin Falkner, veterinary technical consultant for Elanco Animal Health.  

The potential effects of BRD on human resources, facility use, decision-making and operational efficiency of the business model(s) can be more dramatic and impactful than those directly attributed to BRD. 

Opportunity cost of time

Producers and their business models are under a lot of pressure and face difficult constraints. There may only be narrow windows of profitable buying or marketing opportunities. While it is natural to manage what you can measure, a partial-budget projection does not really measure BRD’s true impact. When BRD is consuming constrained resources, interconnected business decisions and activities are often impacted. An example is the opportunity cost of human resources.  

“A case of BRD might consume 10-30 minutes of skilled employee time, meaning an owner or a caretaker’s time is being spent away from other critical tasks, such as husbandry, maintenance and employee, supplier and customer relationships that are important for keeping your animals and business healthy and sustainable for the future,” says Dr. Falkner.  

BRD management is too often seen as the here-and-now. However, the most effective management is in managing the wellness of future groups. Cattle brought into a well-maintained facility with less disease, cared for by fully engaged, long-term employees will have more positive outcomes than those coming into a poorly maintained facility with a history of high disease rates, employee turnover and disengagement. When we make decisions on cattle purchases and BRD management from a partial-budget perspective, we do not consider what else isn’t completed or completed very well because of BRD.   

The seven dimensions of business wellness

To ensure decisions are properly weighed, Dr. Falkner suggests considering them from a seven-dimensional perspective. Partial budgeting yields a two-dimensional return/cost ROI estimate, which is important, but the seven-dimensional approach is imperative for overall business well-being. The additional five dimensions include:  

Each dimension plays an important role in the success of your business and ultimately how well you can manage diseases in your herd. Dr. Falkner believes that, while those who operate primarily with partial-budget decision-making can improve current closeouts and short-term financial performance, this apparent success can be a path to failure.  

“When we do not properly consider the impact of our decisions on the upper dimensional outcomes critical to success, we are often placing unaccounted debts on the operation, and these will eventually come due,” Dr. Falkner emphasizes.  

A successful BRD management plan starts with understanding and managing for the wellness of your entire business. If it does not, BRD may be costing you much more than you realize. 

Ready to learn more about animal and business wellness?  
Visit ElancoBRD.com or talk to your Elanco representative today.