Case study of the month: individual application of animal health products
Strategic application of animal health products based on the weight of individual sheep reduced total cost of drenches, injections and backline products for Scott Newbey.
Owner: Scott Newbey, ‘Kerang Vale’
Property location: East Broomehill
Property size: 2500 hectares
Stock: 1500 Merino and composite ewes, Suffolk stud
Technology: Automed® medication system
Scott uses a sheep handler for drenching, vaccinating and applying backline for lice control. Load bars, as part of his sheep handling system, make the automed® applicator for the application of drenches, injections and backline a viable proposition.
Prior to introducing the automed® applicator, Scott would drench to the heaviest weight in the mob, or at least near to it, which meant that some sheep did not get enough and others too much.
The automed® medication system calculates the optimal dose for each animal based on their individual weight. It records treatments, manages inventory, integrates with weigh indicators and electronic identification (EID) readers using an app and web portal to capture all the information as applications occur. Individual login means that the application of medication is traceable to the operator.
By applying an accurate dose to every animal, the smaller size animals do not receive more than required, reducing the amount of animal health product used. Correct application of drench, vaccine and backline has the potential to improve productivity and reduce the risks associated with resistance to animal health products. Additionally, there is a benefit in having a complete record of animal health treatments for on-farm inventory audits, or if selling to an abattoir or feedlot.
Business Case
Investment analysis found that the automed® was a positive investment for Scott that resulted in a reduction in consumption of animal health products (other benefits were not assessed). Table 1 shows the difference between ‘with’ and ‘without’ the automed® system for Scott’s flock (1317 weaners and maiden ewes, 1500 ewes).
Table 1 Difference in cost with and without automed® for animal health products for Scott’s flock. Note: 1 imidacloprid; 2 Virbac Cydectin; 3 cyromazine; 4 abamectin, oxfendazole and levamisole; 5 Cydectin eweguard; 6monopantel; 7spinosad; 8 Weanerguard Se B12; 9dicyclanil
|
| Without automed®. Total cost on max weight | With automed®. Total cost | Difference (savings)
| |
| Lower priced products | ||||
| Weaners and maiden ewes | Backline1 | $1501 | $892 | $609 |
| Injection2 | $1106 | $553 | $553 | |
| Pour-on3 | $737 | $438 | $300 | |
| Ewes | Drench4 | $924 | $768 | $155 |
| Backline1 | $3000 | $2503 | $506 | |
| Injection5 | $1953 | $1625 | $329 | |
| Pour-on3 | $1478 | $1230 | $249 | |
| Higher priced products | ||||
| Weaners and maiden ewes | Backline7 | $1923 | $1142 | $780 |
| Injection8 | $1475 | $ 737 | $738 | |
| Pour-on9 | $1093 | $ 649 | $444 | |
| Ewes | Drench6 | $2190 | $1822 | $369 |
| Backline7 | $3854 | $3206 | $648 | |
| Injection8 | $2587 | $2152 | $435 | |
| Pour-on9 | $2904 | $2416 | $488 | |
The benefit for Scott depends on the type of products he uses. The net present value (NPV) for the lower priced products using the automed® is $17,474 and benefit-cost ratio (BCR) is 17.2 (a ratio of 1 or more indicates the investment is worthwhile), whereas the NPV for the higher priced products is $26,390 and BCR is 25.8. The payback period was one year for either of the product groups. The automed® system is clearly more advantageous when using higher priced products.
This analysis assumed that the automed® system is an add-on to a system already using several technologies, namely electronic ear tags, an EID reader and sheep handling equipment with capacity to weigh the animals. Therefore, the additional cost for the applicator and subscription is a small investment to achieve financial gains from savings in consumption of animal health products.
For farmers without these technologies, the minimum piece of equipment required to use the automed® system is a weighing crate and indicator with the capacity to talk to the automed® device. The minimum cost for this equipment is estimated to be $8500. The additional capital cost for a weighing device reduces the NPV, and the BCR is 1.6 and 2.8 for lower and higher priced products respectively, although it remains a positive investment especially when using higher value products.
When the analysis is extrapolated to larger sized flocks, economies of scale are evident: as the flock size increases, the NPV and BCR increase (Table 2).
Table 2 NPV and BCR at different flock sizes
|
|
| Without a weighing crate | With a weighing crate | ||
| Number of mated ewes |
| Lower priced products | Higher priced products | Lower priced products | Higher priced products |
| 2000 | NPV | $22 314 | $23 736 | $13 814 | $25 155 |
| BCR | 22 | 32.8 | 2.3 | 3.8 | |
| Pay-back (years) | 1 | 1 | 4 | 1 | |
| 3500 | NPV | $40 560 | $60 290 | $32 000 | $51 950 |
| BCR | 39 | 58 | 4.8 | 7.5 | |
| Pay-back (years) | 1 | 1 | 2 | 1 | |
| 5000 | NPV | $58 952 | $89 290 | $50 450 | $78 943 |
| BCR | 57 | 84 | 7.3 | 11.3 | |
| Pay-back (years) | 1 | 1 | 2 | 1 | |
Even though the NPV, BCR and payback period on the automed® look very favourable, they need to be considered in the context that purchasing an automed® is ‘value adding’ a previous purchase of sheep handling equipment, rather than a stand-alone investment within the sheep enterprise.
For more information on this case study, please contact Development Officer John Paul Collins, john.collins@dpird.wa.gov.au
Disclaimer: Mention of product names should not be taken as endorsement or recommendation.