This chapter presents the basic principles of production economics with examples applied to livestock production systems. It explains the concepts of costs, output response to inputs, and the use of resources to maximize profits and/or minimize costs.

This chapter examines the origin of the economics of livestock and their associated diseases. The pioneers in the field of animal health economics are presented as well as their contributions to its development.

The paper used for the text pages in this book is FSC certified. The FSC (Forest Stewardship Council) is an international network to promote responsible management of the world's forests.

Schmallenberg virus (SBV) was first detected in 2011 in Germany and then in France in 2012. This study simulates the production of different ruminant systems in France and estimates, through partial budget analyses, the economic cost of SBV at the farm level, under two disease scenarios (a high-impact and low-impact scenario). A partial budget is used to evaluate the financial effect of incremental changes, and includes only resources or production that will be changed. In the high-impact scenario, the estimated impact of SBV ranged from €23 to €43 per cow per year and €19 to €37 per ewe per year. In the low-impact scenario, it was approximately half (for cows) or one-third (for ewes) of this amount. These financial impacts represent 0.6% to 63% of the gross margin, depending on the chosen scenario and the livestock system being considered. The impacts of SBV come mainly from: the extra costs from purchasing and raising replacement heifers and losses in milk production (dairy cows); the losses in calf or lamb production (beef systems and meat sheep); and the losses in milk production and from unsold replacement lambs (dairy sheep). The use of integrated production and economic models enabled the authors to estimate the cost of SBV and to tackle the problem of scarce data, which is a difficulty for most emerging diseases, by their very nature. It also allowed the authors to develop an accurate disease impact assessment for several production systems, over a short time span. Extrapolating from this economic assessment to predict the scenario in coming years depends on the immunity period of the disease and the length of the production cycles.

This chapter discusses the economics of zoonoses as well as that of their control. Analysis of the cost or burden of zoonotic diseases in humans, animals and society is given focus. The components of the burden of zoonotic disease in animals are summarized. The analytical challenges posed by the economics of controlling zoonoses are presented.