Automatic Milking Systems
Jim Salfer
University of Minnesota
St. Cloud, MN
© 2011 Regents of the University of Minnesota. All rights reserved.
Why robotic/automated milking?
• Improve lifestyle
• Labor management
• Human health
• Latest technology
© 2011 Regents of the University of Minnesota. All rights reserved.
A dairy farmer’s day
Business management
50-60%
Feeding 10-20%
Reproduction & Health 5-15%
Milk harvesting 5-10%
Milk harvesting 50-60%
Feeding 10-20%
Reproduction & Health 5-15%
Business management 5-10%
© 2011 Regents of the University of Minnesota. All rights reserved.
Automated/Robotic Milking Systems
Box systems• Lely
• DeLaval
• GEA Farm Technologies
• AMS-Galaxy
• BouMatic Robotics
Parlor systems• Rotary Parlor
• Herringbone or
Parallel
© 2011 Regents of the University of Minnesota. All rights reserved.
Single Box
Systems
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GEA Farm Technologies
Photo courtesy Erica Kiestra, KIE Farms
© 2011 Regents of the University of Minnesota. All rights reserved.
AMS-Galaxy, USA
Photo courtesy Brad Biehl, Corner View Farm
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BouMatic Robotics
Photo courtesyFour Clover Dairy Inc.The Van Wierens
© 2011 Regents of the University of Minnesota. All rights reserved.
What data are we collecting?• Visited 52 farms in 2012 (all single box)
• Collected data on facility layout and design
• Questionnaire on management, nutrition
• Daily data from AMS computer (ongoing)
• A minimum of 30% of cows in each pen scored for:
– Locomotion (1 to 5 scale, 1=normal, 5=severely lame)
– Hygiene (1 to 5, 1=clean, 5=severely dirty)
– Severe hock lesions (swollen hocks or open sores)
© 2011 Regents of the University of Minnesota. All rights reserved.
Results
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Farm demographics
Item Average Min Max
No. robots/farm 2.6 1 8
No. robots/pen 1.4 1 3
© 2011 Regents of the University of Minnesota. All rights reserved.
Number of milkings per day
No. of milkings No. of refusals
Average 2.8 0.9
Minimum 2.4 0.4
Maximum 3.2 2.0
Caution – Preliminary!
© 2011 Regents of the University of Minnesota. All rights reserved.
Milking time, speed, robot use
Milking time
(minutes)
Milking
speed
(L/min)
Robot idle
time (%)
Average 5.5 2.8 19
Minimum 4.5 2.3 8
Maximum 6.3 4.7 66
Caution – Preliminary!!
© 2011 Regents of the University of Minnesota. All rights reserved.
Guidelines for Efficiency
• 140-190 attaches/24 hrs
• 2.4-3.0 milkings/cow/day
• 4000-5500 lbs of milk/AMS/day
© 2011 Regents of the University of Minnesota. All rights reserved.
Economics
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Cost/ValueExpensive – compared to what???
Family dairy looking to expand
Trade offs
– labor (hired and family)
– capital investment
– lifestyle
Choices:
– low cost parlor – hired/family labor
– modern parlor – hired/family labor
– AMS – family labor
© 2011 Regents of the University of Minnesota. All rights reserved.
Slide complements of Tranel & Schulte, 2013
© 2011 Regents of the University of Minnesota. All rights reserved.
Inputs – Two robotshttp://z.umn.edu/robotmilker
and Jim Salfer
Extension Educator, Dairy
[email protected], 320-203-6093
University of Minnesota
by William F. Lazarus
Professor and Extension Economist
[email protected], 612-625-8150
Robotic Milking System Economic Analysis
Herd Size -- both milking and dry 144 no. of cows
Number of Robots Needed 2 no. robots
Estimated Cost per Robot $190,000 $ per robot
Total investment for the robots alone $380,000 total $ for farm
Related housing changes needed/cow $175
Related housing changes needed $25,200
Total investment for the robots and housing $405,200
Per cow $2,814 $ per cow
Interest rate required on the overall investment 5.0% interest rate
Estimated Annual Change in Milking System Repair $7,000 $ per robot
Robots - Years of Useful Life 12 years
Related housing - Useful Life, multiple of robot life 2 x robot life
Related housing - Years of Useful Life 24 years
Value per Robot after Useful Life $25,000 $ per robot
Increased Insurance Value of Robot & Housing vs. Current $350,000 $ per farm
Insurance Rate per $1,000 Value 0.5%
© 2011 Regents of the University of Minnesota. All rights reserved.
Inputs – Two robotshttp://z.umn.edu/robotmilker
and Jim Salfer
Extension Educator, Dairy
[email protected], 320-203-6093
University of Minnesota
by William F. Lazarus
Professor and Extension Economist
[email protected], 612-625-8150
Robotic Milking System Economic Analysis
Labor Changes
Current Hours of Milking Labor with setup&cleanup 7 hours per day
Anticipated Savings in Milking Labor, hrs/day 5 hours per day
Anticipated Hours of Milking Labor 2 hours per day
Current Hours of Heat Detection 0.65 hours per day
Anticipated Hours of Heat Detection 0.25 hours per day
Labor Rate for Milking and Heat Detection $15.00 $ per hour
Increased Hours for Records Management 0.6 hours per day
Reduced Hours for Labor Management 0 hours per day
Labor Rate for Records and Labor Management $18.00 $ per hour
Milk Production, Herd Health, Reproduction and Milk Quality Changes
Mailbox Milk Price 18.5 $ per cwt.
Lbs of Milk per Cow per Day, Past Year 75 lbs/cow/day
Projected Change in Milk Production 5 lbs/cow/day
SCC Premium per 1,000 SCC Change 0.003 $ per cwt
Current Annual Bulk Tank Average SCC 240000 SCC per ml
Estimated Percent Change in SCC -5 %
Reproduction and Herd Health Value of Software 50 $ per cow/year
Feed Costs and Intake Changes
Milk fat content 3.70%
Projected Change in Dry Matter Intake Per Day 1.77 lb DM/day
Cost per lb of TMR Dry Matter 0.11 $ per lb DM
Pellets Fed in Robot Booth 11 lb/day
Extra Cost for Pellets Fed in Robot Booth $20 $ per ton
© 2011 Regents of the University of Minnesota. All rights reserved.
OutputsPartial budget analysis (before-tax)
Positive Impacts: Negative Impacts:
Increased Incomes: Decreased Incomes Expected: $0
Increased Milk Production $43,956 Increased Expenses:
Increased Milk Premiums $1,369 Increased Repair and Insurance Costs $15,750
Increased Cull Cow Sales (minus = decrease) $0 Change in Feed Quantity Due to DMI Change $9,239
Software Value to Herd Production $7,200 Extra Cost to Pellet the Feed Fed in the Robot Booth $5,227
Total Increased
Incomes $52,525 Increased Cow Replacement Costs (minus = decrease) $0
Decreased Expenses: Increased Utilities and Supplies $972
Reduced Heat Detection $2,190 Increased Records Management $3,942
Reduced Labor $27,375 Capital Recovery Cost of Robots (Dep & Int) $42,874
Reduced Labor Management $0 Total Increased Expenses $78,004
Total Decreased
Expenses $29,565 Total Negative Impacts $78,004
Total Positive Impacts $82,090 NET ANNUAL FINANCIAL IMPACT w/o Housing = $4,085
Capital Recovery Cost of Housing (Dep & Int) $1,826
Total Capital Recovery Cost of Robots & Housing $45,717
NET ANNUAL FINANCIAL IMPACT with Housing = $1,242
Robot's salvage value at the end of its useful life:
Estimated value at end $50,000 Annualized PV
Estimated value at end, present value (PV) at 5%/year, $27,842 $3,141
NET ANNUAL IMPACT with with
Robot's salvage value $4,383
© 2011 Regents of the University of Minnesota. All rights reserved.
Sensitivity Analysis
-$40,000
-$30,000
-$20,000
-$10,000
$0
$10,000
$20,000
$30,000
$40,000
$50,000
0 2 4 6 8 10
Imp
act
Projected Change in Milk lb/day
NET ANNUAL IMPACT
Imp
act
NET ANNUAL IMPACT
© 2011 Regents of the University of Minnesota. All rights reserved.
Sensitivity Analysis
-$30,000
-$20,000
-$10,000
$0
$10,000
$20,000
6 8 10 12 14 16 18 20
Imp
act
Years of useful life
NET ANNUAL IMPACT
© 2011 Regents of the University of Minnesota. All rights reserved.
After Tax Cash Flow
Annual cash flows (after-tax) Users Guide:
Total investment for the robots and housing $405,200
Robot Loan
1
Robot Loan
2
Housing
Loan
Years of Useful Life 12 24
Amount borrowed $350,000 $0 $0
Interest rate on debt 5.5% Used for "interest on debt", below
Years of Loan 12
Balloon payment (principal) at end, if any $0
Equity capital required $55,200 Difference between the total investment and the amount borrowed.
Hurdle rate of return on equity for the NPV calc. 5.5% % interest rate charged on the equity capital
Marginal income tax rate (federal + state) 40% Enter 0% tax rate to do the cash flow calculation on a before-tax basis.
MACRS depreciation method
-$60,000
-$40,000
-$20,000
$0
$20,000
$40,000
$60,000
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Year
After-tax cash flows by year
© 2011 Regents of the University of Minnesota. All rights reserved.
Inputs – Four robots system
• 288 cows
• $180,000/robot
• $28,800 barn cost
• Decrease labor 8 hour/day
• $15 hour labor cost
• Varied milk production
http://z.umn.edu/robotmilkerand Jim Salfer
Extension Educator, Dairy
[email protected], 320-203-6093
University of Minnesota
by William F. Lazarus
Professor and Extension Economist
[email protected], 612-625-8150
Robotic Milking System Economic Analysis
© 2011 Regents of the University of Minnesota. All rights reserved.
Financial impact with 70 lb/milk base
Milk Price Production increase in milk
3 6 9
$15.00 -$26,795 $4,075 $34,946
$17.50 -$19,664 $18,331 $56,330
$20.00 -$12,539 $32,587 $77,714
© 2011 Regents of the University of Minnesota. All rights reserved.
Financial impact with 80 lb/milk base
Milk Price Production increase in milk
3 6 9
$15.00 -$26,453 $4,418 $35,288
$17.50 -$19,325 $18,674 $56,672
$20.00 -$12,197 $32,930 $78,056
© 2011 Regents of the University of Minnesota. All rights reserved.
Summary• AMS systems can work
• Most current AMS users are satisfied with decision
– Dairies can expand w/o hiring labor
– Producers can have more flexible schedule
• Must make the cash flow work!!!
• Whole system approach for best success
• Requires excellent management for success
© 2011 Regents of the University of Minnesota. All rights reserved.
Acknowledgements
• Dairy producers
• Lely
• DeLaval
• GEA
• David Kammel, UW-Madison
• Lucas Salfer
• Tyler Evink
• Michael Schmitt
© 2011 Regents of the University of Minnesota. All rights reserved.
Jim Salfer E-mail [email protected]: 320.203.6093