Economic implications of moving to improved standards of animal welfare

 replacing existing buildings and equipment with higher welfare systems often involves very large capital outlay costs. However, these costs will be much reduced if the change is delayed until the existing facility has reached the end of its working life;  where a producer is constructing a new building (rather than replacing an existing one) the capital costs entailed in selecting a higher welfare system will in some cases be greater but sometimes will be less than those of a lower welfare system;  overall production costs (including running costs as well as depreciation and interest in respect of capital outlay) are generally higher in better welfare systems although in some cases they are lower;  the additional costs associated with higher welfare systems may be relatively small in some cases. However, for such systems to be economically viable, producers must receive a price premium that covers the extra costs In the EU and US a reasonable proportion of consumers are willing to pay higher prices for higher welfare products. However, consumers in the non-EU countries covered by this report may not be able or willing to do so;  in some cases there is a ‘win-win’ with improved welfare producing economic benefits. For example, animals with higher welfare may be healthier resulting in lower veterinary costs and reduced disease and mortality as well as in some instances better growth rates and feed conversion;  Improved welfare may in some cases entail very few additional costs. For example, gentler handling of cattle may involve few costs other than training but may bring substantial economic benefits in reduced bruising and carcase downgrades.