jim salfer university of minnesota st. cloud, mn 12 pre-conference...© 2011 regents of the...

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


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%


Automated/Robotic Milking Systems

Box systems• Lely

• DeLaval

• GEA Farm Technologies

• AMS-Galaxy

• BouMatic Robotics

Parlor systems• Rotary Parlor

• Herringbone or

Parallel


Single Box

Systems


GEA Farm Technologies

Photo courtesy Erica Kiestra, KIE Farms


AMS-Galaxy, USA

Photo courtesy Brad Biehl, Corner View Farm


BouMatic Robotics

Photo courtesyFour Clover Dairy Inc.The Van Wierens


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)


Results


Farm demographics

Item Average Min Max

No. robots/farm 2.6 1 8

No. robots/pen 1.4 1 3


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!


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!!


Guidelines for Efficiency

• 140-190 attaches/24 hrs

• 2.4-3.0 milkings/cow/day

• 4000-5500 lbs of milk/AMS/day


Economics


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


Slide complements of Tranel & Schulte, 2013


Inputs – Two robotshttp://z.umn.edu/robotmilker

and Jim Salfer

Extension Educator, Dairy

[email protected], 320-203-6093


by William F. Lazarus

Professor and Extension Economist


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%

http://z.umn.edu/robotmilker


Inputs – Two robotshttp://z.umn.edu/robotmilker

and Jim Salfer








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



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


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


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


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


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










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


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


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


Acknowledgements

• Dairy producers

• Lely

• DeLaval

• GEA

• David Kammel, UW-Madison

• Lucas Salfer

• Tyler Evink

• Michael Schmitt


Jim Salfer E-mail [email protected]: 320.203.6093

jim salfer university of minnesota st. cloud, mn 12 pre-conference...© 2011 regents of the...

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