Finances and returns for robotic dairies

Abstract

Automatic milking systems (AMS) became commercially available in the early 1990s. These systems provide flexibility and improve the lifestyle of farmers installing them. Because of the larger capital cost per kilogram of milk produced, observational studies in Europe and simulation studies have shown AMS to be less profitable than milking parlor systems, although previous findings are somewhat mixed. Improved performance of newer generations of AMS, better facility design to accommodate cow behavior, and better management of these facilities have the potential to make AMS more profitable. Wage rates are also increasing and sourcing high-quality milking labor is challenging. We developed partial budget simulations to model profitability of AMS compared with parlor systems for 120-, 240-, and 1,500-cow farms. Both the 120-cow and 240-cow AMS were more profitable than the parlor systems. However, the 1,500-cow parlor system was more profitable than the AMS. Breakeven labor analysis of the 1,500-cow system showed that at a wage inflation rate of 1% and a 0.91 kg/d lower milk production with the AMS system, the breakeven labor rate was $27.02/h. If the farm is able to achieve similar milk production between the 2 systems and wage inflation averages 3% over the 30-yr time horizon, the breakeven wage rate drops to $17.11/h. The major management factors that influenced the net annual impact were changes in milking labor cost and milk production. Another significant factor affecting net annual impact was the economic life of the AMS. An economic life of 13 yr or longer was required for an AMS to have a consistently positive net annual impact (depending on milk production per cow and labor cost). For every 227-kg increase in daily milk production per AMS, net annual income increased approximately $4,100. Cost-effective ways to optimize milk per AMS are to minimize attaching and milking times and to optimize milking settings.

Keywords: automatic milking system; economic analysis; economic simulation; net annual impact.