Haseeb Ahmed, Karin Alvåsen, Charlotte Berg, Helena Hansson, Jan Hultgren, Helena Röcklinsberg, and Ulf Emanuelson, "Assessing Economic Consequences of Improved Animal Welfare in Swedish Cattle Fattening Operations using a Stochastic Partial Budgeting Approach," August 2019 (available here).
The authors simulate the short-run effects on Swedish farms (with initially, 50 head of cattle) of two reforms aimed at raising animal welfare: more space per animal, and lower reliance on food concentrates. Spoiler alert!: both reforms reduce farm profits in the short-run. (Presumably the opposite result would be unexpected, as it would suggest that farm owners had not seen that they could do better by unilaterally providing better animal welfare.)
The simulation of adding an extra square meter of space for cattle (above the required 4 square meters per animal) posits a 20% reduction in herd size (from 50 to 40) in the short-run. One benefit to the farmer of increasing space is more weight gain per animal within the smaller herd -- though feed intake per animal rises, too.
The simulation of raising the forage-to-concentrate ratio in cattle feed (from 40-to-60 to 65-to-35) raises animal welfare by reducing the incidence of digestive and other diseases, while slowing the rate of weight gain and changing feed costs.
As noted above, both the interventions studied reduce farmer profit, whether the changes are applied to dairy cattle or beef cattle herds. The size of the per-animal decline in profits ranges from about 11 percent to more than 50 percent, with the animal feed reform being more detrimental in terms of profitability. These simulations suggest, therefore, that under current (Swedish) conditions, farmers have no monetary incentive to improve animal welfare along the dimensions studied.
