1. Biosecurity Vulnerability and Strategy evaluation Continued

2. Total Welfare Total Welfare for CB analysis TSW=CS+PS

3. Appraisal Based on Changes in Net Income Examining situations where economic agents are operating with varying biosecurity attributes where all other factors either do not vary or can be controlled Estimating a relationship between net income and the biosecurity attribute Calculating the change in net income induced by the change in biosecurity attributes Utilizing quantitative relationship between biosecurity change and net income. Assumes prices don’t change so demand is perfectly elastic

4. Appraisal Based on Changes in Net Income Assumes prices don’t change so demand is perfectly elastic

5. Processing Markets Feed Mixing Other Resources AUM Grazing Labor Pasture Land Natl. Inputs Forestland Water Livestock Production Crop Production Export Domestic Demand Import Biofuel/GHG Demand Forest Production Cropland Initial Accomplishments (V) Applying Sector modeling

6. Model Economic Structure

7. Primary Commodities Cotton Corn SoybeansSorghum SOFT HRWW DURW HRSW Rice Oats BarleyPotatoes Silage Hay Alfalfa Sugarcane SugarbeetTomatofrshTomatoprocOrangefrsh Orangeproc GrpfrtfrshGrpfrtproc SwitchGras HybrPoplar Willow Cornres SorgResRiceResWheatRes OatsResBarleyRes Sheep CowCalf BeefFeed Dairy HogFarrow FeedPig PigFinish OthLvstk StockSCav StockHCav StockSYea StockHYea VealCalf Turkeys Broilers Eggs BeefcowsBioManure

8. Secondary Commodities OrangeJuic GrpfrtJuic SoybeanMealSoybeanOil HFCS Beverages Confection Baking Canning RefSugar GlutenMeal GlutenFeed DDG CornStarch CornOil CornSyrup Dextrose FrozenPot DriedPot ChipPot FedBeef NonFedBeef Pork Chicken Turkey WoolClean FluidMilkwholFluidMilkLowFat SkimMilk Cream EvapCondM NonFatDryM Butter AmCheese OtCheese CottageChe IceCream Bagasse Lignin LigninHardwdLigninSoftwd EdTallow NonEdTallow YellowGrease CropEthanol CellEthanol Biodiesel BiodieselWO MktGasBlend SubGasBlend Tbtus

9. Corn Belt Great Plains Lake States Northeast Pacific Southwest Pacific Northwest South Central Southeast South West West East Rocky Mountains FASOM Agricultural Regions

10. Foreign Regions in FASOM FASOM has supply and demand curves for corn, 4 types of wheat, soybeans, rice and sorghum across the above regions and within 11 major US regions where the region trades the commodity. FASOM also maintains transportation costs between all regions. The model determines exports to the point where prices are in equilibrium considering transport across all markets.

11. Modeled Beef Cattle Flow Cow/Calf Beef Steer Calves Beef Heifer Calves Cull Cows Replacement Breeding Stock Steer Yearling Stockers Steer Calves Steer Calf Stockers Heifer Yearling Stockers Feedlot Beef Yearlings First Grazing Program Second Grazing Program Heifer Calves Heifer Calf Stockers Feedlot Beef Calves First Grazing Program Second Grazing Program Feedlot Beef Slaughter Cull Cows Non-Fed Beef Slaughter Bulls

12. Modeled Dairy Cattle Flow Dairy Milk Dairy Steer Calves Dairy Heifer Calves Cull Dairy Cows Replacement Breeding Stock Raw Fluid Milk Dairy Steer Calves* *Dairy Steer Calves merge in with the Steer Calves in the Beef Cattle Flow Steer Yearling Stockers Steer Calves Steer Calf Stockers First Grazing Program Second Grazing Program Feedlot Beef Yearlings Feedlot Beef Calves Feedlot Beef Slaughter Dairy Cull Cows Non-Fed Beef Slaughter Dairy Heifer Calves Bulls

13. Rift Valley Fever An emerging disease and agro-bio-terror threat Mosquito-borne viral disease of livestock and humans Transmission modulated by weather Demonstrated ability to travel Unknown outside Africa and Arabian Peninsula Appearance in US expected to impact agriculture sector severely Cost of cattle illness and death Potential bans on US livestock Limited analytic tools to support decision- making or operational planning French vector model USDA/NASA risk assessment method

14. Epidemic/Economic Modeling Biology and Epidemiology Economics Disease Vectors Environment Modeling Infection Estimates Animal Production Analysis Costs & Impacts Subject Matter Experts

15. Items changed in FASOM/ASM for Rift Study For both beef and dairy on a geographic basis Calving rate Adult beef production (Deaths and culling) Culled cattle (those who lost calves) Replacement needs (lost adults and lost replacements) Milk production (Deaths and cows that lost calves) In model other indirect effects Feed usage Calf movement Released feed usage expanded elsewhere (exports, biofuels) Regional locus of feeding Production Commodity prices Dairy and beef products

16. High Plains FMD Epidemic/Economic Modeling 64 scenarios over various outbreak and disease mitigation scenarios – Early detection vs. late detection – Ring vs. targeted vaccination – Adequate vs. inadequate vaccine availability – Regular vs. enhanced surveillance – Slaughter options: ring slaughter, slaughter of infected, and slaughter of dangerous contacts

17. AusSpread Output – Duration of epidemic in weeks – Expected number of infected herds – Expected number of dangerous contacts – Expected slaughter – Expected vaccination

18. Integration into FASOM Unlike Rift, FMD affects more than cattle Adjustment of sheep and swine budgets as well Estimate percentage impacts and adjust budgets by these percentages Spatially lock infected region at the production level

19. Specific Adjustments Cow/Calf Dairy Milk Sheep Wool Feeder Pig Production Hog Farrow to Finish

20. Example: Dairy Dairy budgets are on a per cow basis A single dairy cow produces, on average a certain amount of milk and a certain amount of dairy calves each year as well as cull cows To do this she needs a certain amount of inputs The conversion of FMD effects into percentage allows the modeler to adjust these outputs across an entire region the model automatically shifts input to alternative uses

21. Baseline SpecificationAverageUnits / Description base.Silage-6.600US tons for dairy production base.Hay-5.060US tons for dairy production base.Milk193.906100 lbs of raw milk base.CullDairyCows1.657100 lbs of cull dairy calves base.DairyCalves2.057100 lbs of dairy calves base.biomanure4.940tons manure available for bioprocesses base.SoybeanMeal0.860tons soybean meal base.DairyCon0108.529100 lbs grain blend for dairy cattle base.Pasture1.750Acres of pasture land base.Labor31.587Hours base.othercosts1272.391Dollars base.Profit1435.851Dollar difference between revenues and costs base.Head1.000Budget is for one animal

22. Code in FASOM *adjust budgets for slaughter livestockbud("TxHiPlains",ANIMAL,livetech,eftech,"DairyCalves") $(livestockbud("TxHiPlains",ANIMAL,livetech,eftech,"DairyCalves") and avgeffectsonherd("dairy",newscenarioname,"TxHiPlains",herdcomponent)) =(livestockbud("TxHiPlains",ANIMAL,livetech,eftech,"DairyCalves") -2.057*(avgeffectsonherd("dairy",newscenarioname,"TxHiPlains","infected")+ avgeffectsonherd("dairy",newscenarioname,"TxHiPlains","immune")+ avgeffectsonherd("dairy",newscenarioname,"TxHiPlains","dead"))); *handle milk loss livestockbud("TxHiPlains",ANIMAL,livetech,eftech,"milk") $(livestockbud("TxHiPlains",ANIMAL,livetech,eftech,"milk") and avgeffectsonherd("dairy",newscenarioname,"TxHiPlains",herdcomponent)) =(livestockbud("TxHiPlains",ANIMAL,livetech,eftech,"milk")* (1-(avgeffectsonherd("dairy",newscenarioname,"TxHiPlains","latent")+ avgeffectsonherd("dairy",newscenarioname,"TxHiPlains","infected")+ avgeffectsonherd("dairy",newscenarioname,"TxHiPlains","immune")+ avgeffectsonherd("dairy",newscenarioname,"TxHiPlains“,“dead”)));

23. Initial Accomplishments (VI) Estimated Economic Impacts of an FMD outbreak Welfare for Agriculture Base millions Economic Impacts Large FeedlotGrazing OperationBackyard (1) Early Detection (57) Late Detection (15) Early Detection (7) Late Detection (40) Early Detection (16) Late Detection US Consumers $1,587,043-$218-$354-$64$163$172-$21,106 US Processors $2,681$13$0.0142$13-$15-$44$46 US Producers $54,951-$22,384-$44,849-$1,514-$3,498-$4,213-$7,108,210 US Total $1,644,676-$22,590-$45,203-$1,565-$3,350-$4,085-$7,129,270 Foreign Consumers $188,107-$87-$89-$65-$37-$62-$1,691 Foreign Producers $15,039$21$19$10-$15-$10$1,329 Rest Total $203,146-$66-$70-$54-$53-$72-$362 Total Globally $1,847,823-$22,656-$45,274-$1,620-$3,404-$4,158-$7,129,632

24. Costs for Disease Management and Carcass Disposal Disease Management – Vaccination (per head and per farm) – Testing (per farm) – Surveillance (per farm/ per visit) Carcass Disposal – Appraisal (per farm) – Euthanasia (per head) – Disposal (per farm) – Cleaning and Disinfecting (per farm)

25. Average Costs Across Scenarios Disease Management – $5,912,086.82 Carcass Disposal – $39,998,352.68 Average Across Scenarios: $45,910,439.5

26. Price Changes from Pre-Event Base Drops in – Cotton, soybeans, wheat, barley, silage, hay and sugarcane (less than 1%) – Feeder Pig prices dropped about 15% across scenarios – Feeder calves, stocker calves dropped 2-7% – Not much change in cattle yearlings Prices Increased for – Fresh vegetables and raw milk (less than 1%) – Broilers, pork and fed beef (small 0.1 – 2%) – Generally no change in lamb Certain late detection, backyard index cases were exceptions. – Very large drops and increases (15-40%) – Rarely, dairy calves and steer calves dropped almost 100%.