Finances and returns for robotic dairies

Abstract Text:

Automatic or robotic milking systems (AMS) are being adopted by dairy producers at a relatively fast rate. Previous studies of the economic returns of AMS compared to parlor milking systems (PMS) are scarce and offer mixed results mostly because of the assumptions used by the researchers. The key parameters that affected these results pertained to the costs and economic life of AMS and the prospect of the AMS to increase milk production and decrease labor. Another key factor affecting profitability of AMS is milk production per AMS milking unit. Increasing average milk flow rate and reducing milking preparation time along with increasing the percent of milking box occupation time has been shown to increase milk production per AMS unit. The non-financial lifestyle improvement factor is another consideration that influences the decision to install an AMS. We developed a simulation model to compare the economics of alternative milking systems under current Minnesota conditions. As an example, for a 120-cow operation currently switch milking in a tiestall barn, the most profitable alternative is to build a new freestall barn and install a retrofit PMS (double 8) in the old building. A new PMS is slightly less profitable because of the higher cost of investment. Another factor affecting profitability in our model is how much money is spent on the freestall barn. Many AMS freestall barns constructed in cold climates are warm barns and have expensive manure handling systems (slatted floors or automatic scrapers). An AMS is less profitable than a PMS under those circumstances, if milking and chore labor is valued at $15/hour. It would require a labor rate of around $50/hour to make the AMS and PMS equally profitable. Including inflation in labor rate also increases the profitability of AMS systems compared to PMS because of the labor saved. If the barn is equipped more like a typical parlor operation, an AMS may be similar to a PMS in profitability. Those results assume a labor reduction and a milk production increase with the AMS compared to the PMS. Surveys have shown that most farmers are happy with the decision to install AMS. Much of the satisfaction is not based on economic returns, but on improved lifestyle. Maximizing milk per robot by optimizing cow numbers and milking speed along with improved labor efficiency and increased milk production per cow will maximize dairy farm returns.

Keywords: Automatic milking systems, profitability