An assessment of the economic costs to the U.S. dairy market of antimicrobial use restrictions

Antimicrobial resistance is a public threat for humans, generated by the use of antimicrobials in human medicine as well as animal agriculture. Consequently, governments set public policies aim at curbing antimicrobial use (AMU). In dairy production, the occurrence of diseases triggers AMU to limit the costs associated with these afflictions. Therefore, any policies targeting AMU are likely to generate additional costs for farmer, and impact the dairy market. The objective of our research was to assess at the market level the costs associated with potential regulations (a prohibition scenario and tax scenarios) surrounding antimicrobial use in the U.S. dairy sector, comparing to a business as usual scenario. We conducted a two-step analysis, first at the farm and then the market level, to estimate the costs to both farmers and consumers. We found that potential policies restricting AMU would have a minor effect at the market level. In the case of prohibition of AMU, the average milk price would rise from $0.423 to $0.425 per liter. In the short run, the total annual losses would be $152 million. Implementing taxes on AMU would also slightly increase milk price, up to $0.426 in the case of a tax multiplying by five the initial antimicrobial price. Under the prohibition scenario, the quantity of milk produced would decrease by 356 million kilograms, representing 0.4% of the average U.S. milk production over the period 2012-2016. Implementing such policies would lead to a slight increase in costs of production, borne by both consumers and farmers through higher milk prices and lower milk production. As AMU in animal agriculture also fulfills animal welfare and public health objectives, the impacts of restricting AMU should be weighed with these other objectives in policy decisions. Further research is necessary to assess the distributional benefits and costs of AMU policies across farmers, retailers, animal and human health workers, and the public, incorporating multiple dimensions, such as animal welfare and food safety.