What is the cost benefit of EID?
Most of the economic benefits of using EID are based on improved decision-making and improved management. However, there are some direct labour savings in collecting data.
Cost:benefit labour-saving
If looking simply at the labour saving achieved for a single task, Table 1 illustrates the differences in labour cost associated with recording individual live weights using visual tags, as opposed to EID tags.
| Operation 1 | Operation 2 | |||
|---|---|---|---|---|
| Visual tags | RFID | Visual tags | RFID | |
| No. of sheep | 700 | 700 | 600 | 600 |
| No. of labour units | 3 | 2 | 3 | 2 |
| No. of man hours | 11.67 | 4.67 | 13.5 | 3 |
| Cost @ $40 per hour | $466.80 | $186.80 | $540 | $120 |
| Cost per weight recorded | $0.67 | $0.27 | $0.90 | $0.20 |
| Estimated error rate | 5% | 0.05% | ||
| No. of corrections needed | 30 | 0.3 | ||
| Time/error | 0.1 | 0.1 | ||
| Hourly rate for data management | $80 | $80 | ||
| Cost of time for tag correction | $240 | $2.40 | ||
| Cost per unit correct data | $1.30 | $0.20 |
Cost:benefit extra productivity
The cost:benefit was calculated from the extra productivity required per ewe to achieve a 3:1 return on the cost of the equipment, assuming a 10-year equipment lifespan, and not factoring in opportunity cost, finance cost or a cost differential between EID and visual tags.
For example, if a producer running 2000 ewes was to invest in $6000 worth of EID equipment, then the extra productivity that would need to be achieved per ewe to produce a 3:1 return on investment in equipment would be $0.90 per ewe.
If that same producer were running a prime lamb operation, then with lamb prices at $4.50/kg, the producer would need to increase productivity per ewe by 0.2kg of carcase weight. If the same concept were applied to a wool production enterprise assuming a wool price of $12/kg clean, the producer would need to increase wool production by 0.07kg clean or about 0.11kg of greasy wool per ewe.