OBJECTIVES: Mastitis is one of the most frequent and costly diseases in the dairy industry with gram-negative bacteria being the main causal agent. Since most antibiotics have minimal effect on shortening the duration of clinical mastitis caused by gram-negative pathogens (gram-CM) and because of a high spontaneous cure rate, antibiotics are often not recommended for treating Gram-CM. The purpose of this study was to develop a model comparing 5-day treatment with ceftiofur hydrochloride to no treatment of gram-CM, also allowing easy adaptations to reflect the high variability of prices and cost data in livestock. METHODS: A decision tree was developed in MS Excel considering first and recurrent CM episodes, culling and death of cows with gram-CM. Cure rates and other clinical data were derived from published studies.  Costs and losses associated with CM and its treatment, culled or dead cows as well as income generated from saleable milk production or sold cows were considered. Cost and income values were derived from public sources (US-2010, perspective of the producer). All input parameters were varied extensively in one-way sensitivity analyses. RESULTS: With US-2010 cost/prices, income from saleable milk was $3,039.35 (ceftiofur) and $3069.67 (no treatment), and costs associated with the disease and treatment totaled to $215.12 (ceftiofur) and $246.60 (no treatment) over the entire lactation period, resulting in a $1.16 higher margin per treated cow with a 5-day treatment with ceftiofur compared to no treatment of gram-CM. More cows were cured and fewer cows culled or died with ceftiofur. The model was most sensitive to ceftiofur cure rate and self-cure rate. CONCLUSIONS: Compared to no treatment, ceftiofur’s higher treatment costs and less income due to milk discard were offset by a better efficacy, resulting in less disease associated costs of gram-CM.