milking robots do they pay? - dunn.uwex.edu 3 5 © 2017 regents of the university of minnesota. all...

1/2/2018

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© 2017 Regents of the University of Minnesota. All rights reserved.

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Milking robots – Do they

pay?J.A. Salfer1, M.I. Endres2, W. Lazarus2, K. Minegishi2 ,

E.R. Berning1

University of Minnesota1St Cloud, MN; 2St. Paul, MN

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Results-Why Choose AMS?Top reasons for choosing AMS Frequency

Labor 60%

Lifestyle/Time flexibility 55%

Human Health 28%

Need for investment 23%

Access to Information/Technology 18%

Cow Health 15%

Increased Production/Quality 15%

Consistency of Milking 13%

Individual milking/quarter milking 10%

Seiwert, 2017

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Provides Data

Milk production etc

Over 100 measurements at every milking

Timely decision making

Other benefits:

Consistent milking routine

Higher skilled labor

Never late for work

Never needs training

Doesn’t need scheduling or holidays off

Potential AMS Advantages

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• “Plug and play,” “Plug and pray,” or “Plug and pay”

• Low Return on Investment? (compared to what?)

• Obsolescence

• Repair costs

Potential challenges

Adapted from Bewley, 2015

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Outline Types of robots

Comparing profitability of robotic

systems to parlor systems

– Herd size effect

– Milk production effect

– Labor effect

Keys to optimizing robot efficiency

http://z.umn.edu/RobotParlor

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Box robots

Single box– Free flow

– Guided flow

Multibox– Free flow

– Guided flow

Choices in the market place

Rotary robots

Batch milking

Voluntary milking


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You must like working with cows

“Management makes milk – Robots only harvest it” Doug Kastenschmidt – Ripon WI

Cow management must still come first

Keys to success with robots

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Free flow traffic system

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Milk first guided flow

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Need to accommodate movement of:

Feed

Manure

Cows– Comfort

– Easy access to robot

People

Challenge: Minimize labor

Work around cows in pens for bedding and/or manure

removal

Design to encourage natural cow movement to milk box area

System to handle cows that need management interventions

Key barn design considerations

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Free Flow vs Guided Flow

Item Free Flow Guided Flow

Fetch rate (labor) 16%1 8.5%1

Initial investment lower higher

Level of mgmtcomplexity

lower higher

Feeding

complexity

higher lower

1Rodenburg, 2007

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© 2017 Regents of the University of Minnesota. All rights reserved. Photo compliments Barry

Rotary Robots

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Batch

Similar mgt to

conventional milking

Control over milking

frequency

Labor in barn

24/7/365 If milking 24/d

Pens are empty for

activities

No change in feeding

Voluntary Deal with imperfections

of cow behavior

Lose some control of

milking frequency

Flexible milking

frequency

Flexible labor

Feed changes have

impact on visits

Fetch cows in each pen

Batch vs Voluntary Milking

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Cost/Value (small farms) Expensive – 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

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Cost/Value (larger farms) Do you need a new parlor?

How much is the information worth?

2X vs 3X vs robot milking

How much time is spent hiring, training

and managing labor?

Future labor availability

Trade offs (what devil do you want to deal with?)

– labor (hiring, training and managing)

– repair costs

– on call 24/7

– trickier feeding management

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Conventional farms have greater margin than robot farmsItem Robot Conv P

Gross margin over direct

costs

$231,542 $232,519 0.754

Total nonaccountable costs $79,614 $65,025 0.002

Contractor labor $21,783 $15,361 0.004

Utilities $10,337 $8,788 0.021

Mach & Equip maint & ins $28,088 $24,411 0.136

Land, Bldg, maint & ins $7,404 $5,371 0.104

Avail for overhead & profit $151,198 $167,494 0.046

Bijl et al, 2007, JDS, 90:239-248

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On a FTE-basis, robots have greater margin than conventional farms

Item Robot Conv

Cows/FTE 74 59

Total revenues/FTE $206,378a $164,250b

Total costs/FTE $57,796 $48,463

Margin on dairy production/FTE $148,582a $115,787b

Gross margin/FTE $163,056a $127,939b

Avail for overhead & profit/FTE $101,372 $88,429

Bijl et al, JDS, 2007, 90:239-248 a,b Difference within row (P <0.05)

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FinBin Data indicates that robot farms produce more milk per cow and FTE with less labor per cow.

Item Avg

AMS

Top 40%

AMS

Conv

Milk/cow, lb 25,701 26,255 22,393

Milk per FTE, lb 2,649,140 2,983,293 1,685,597

Feed cost/cwt milk $8.06 $7.27 $8.63

Milk price/cwt milk $15.94 $16.06 $17.07

Turnover rate 33.7% 32.3% 35.1%

Estimated labor/cow 26.91 hrs 24.39 hrs 37.05 hrs

Net Margin, $/cow $-86 $446 $222

U of MN Finbin www://finbin.umn.edu, data from 2015-2016

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Direct costs per cow and per cwt.

Item Robot Top 40%

AMS

Conv

Feed cost 2071 (8.06) 1907 (7.27) 1932 (8.63)

Veterinary 137 (0.53) 136 (0.51) 101 (0.45)

Repairs 184 (0.72) 166 (0.63) 137 (0.61)

Utilities 80 (0.31) 38 (0.14) 42 (0.19)

Hired labor 152 (0.59) 146 (0.56) 423 (1.21)

Total labor 318 (1.55) 372 (1.42) 532 (2.34)


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Overhead costs per cow and per cwt.

Item Robot Top 40% AMS Conv

Interest 236 (0.92) 208 (0.79) 92 (0.41)

Depreciation 406 (1.58) 353 (1.34) 161 (0.72)

Building leases 62 (0.24) --- 39 (0.17)


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Assumptions consistent across all scenariosItem Value

Chore labor rate $16.00/hour

Management labor rate $25.00/hour

Milk Price $7.71/kg ($17.00/cwt)

Cost per kg/DM $0.050/kg ($.011/lb)

Loan interest rate 5%

Equity interest rate 5%

Weighted avg cost of capital 3%

Loan term on barn 20 year

Loan term on robot 10 year

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120 cow scenario assumes two

robots and D8 parlor

Investment1

Robot (2)

– $1,440,000

Parlor (D8)

– $804,000

Milking Labor

Robot (45 min/RMS/d)

1.5 hr/d

Parlor (64 cows/hr)

2 people

8.5 hr/d

1Includes new barn cost

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Two robot system compared to D8

Parlor1

6064

7676

9485

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

1% wage inflation 2% wage inflation 3% wage inflation

Ne

t A

nn

ua

l Im

pa

ct (R

ob

ot

–P

arlo

r)

120 cows 2X milking1Robot milk per cow +5.0 lb/day

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240 cow scenario assumes 4 robots and D8 parlor

Investment1

Robot (4)

$2,400,000

Parlor (D8)

$1,352,000

Milking Labor Robot (45 m/r/d)

2.5 hr/d

Parlor (64 c/hr)

2X - 16 hr/d

3X – 24 hr/d1Includes new barn cost

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Four robot system compared to D8 Parlor1

14589

17765

21328

5967

10987

16445

$0

$5,000

$10,000

$15,000

$20,000

$25,000


Ne

t A

nn

ua

l Im

pa

ct (R

ob

ot

–P

arlo

r)

240 cows 2X milking 240 cows 3X milking1Robot milk per cow +5 lb/day for 2x milking and -2.0 lb/d for 3X milking

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1500 cow scenario assumes 25 robots and D24 parlor

Investment

Robot (25)

$13,750,000

Parlor (D24)

$6,786,000

Milking Labor Robot (45 min/RMS/d)

16.75 hr/d

Parlor (200 c/hr)

81.2 hr/d

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Net annual income for a 1500 milking cow dairy - 25 robots compared to D24 parlor

-$162,672

-$147,542

-$130,571

-$111,210

-$96,080

-$80,672

-$180,000

-$160,000

-$140,000

-$120,000

-$100,000

-$80,000

-$60,000

-$40,000

-$20,000

$0


Ne

t A

nn

ua

l Im

pa

ct (R

ob

ot

–P

arlo

r)

Robot -2.0 lb m/c/d Robot +0 lb m/c/d

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$32.30

$29.59

$27.05$27.23

$24.95

$22.91

$0

$5

$10

$15

$20

$25

$30

$35


Bre

ake

ve

n la

bo

r $

/hr

Robot -2.0 lb m/c/d Robot +0 m/c/d

Breakeven labor rate for 1500 milking cow dairy - 25 robots compared to D24 parlor

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Milk production and wage inflation affect annual impact 25 robot system compared to D24 Parlor

-34,017

-3256-8286

22,433

17,445

48,385

-$40,000

-$30,000

-$20,000

-$10,000

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

1% wage inflation 3% wage inflation

Ne

t A

nn

ua

l Im

pa

ct (R

ob

ot

–P

arlo

r)

Robot +3.0 lb/m/c/d Robot +4.0 lb/m/c/d Robot +5.0 lb/m/c/d

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Affect of labor and lifespan on annual profitability per robot for 4 robot system1

Robot lifespan (years)

8 10 13 15 17

Pro

jec

ted

Milk

ing

La

bo

r

(min

/ro

bo

t/d

)

38 ($5618) ($2789) $62 $1439 $2572

45 ($6159) ($3283) ($452) $912 $2031

60 ($7122) ($4272) ($1480) ($143) $950

No

change

in milk

yield


8 10 13 15 17

Pro

jec

ted

Milk

ing

La

bo

r

(min

/ro

bo

t/d

)

38 ($2329) $527 $3851 $5026 $6228

45 ($2810) $133 $3067 $4499 $5687

60 ($3774) ($855) $2039 $3445 $4606

2 lb/cow/d

increase in

milk yield


8 10 13 15 17

Pro

jec

ted

Milk

ing

La

bo

r

(min

/ro

bo

t/d

)

38 ($9045) ($6223) ($3475) ($2167) ($1103)

45 ($9526) ($6717) ($3989) ($2694) ($1644)

60 ($10,489) ($7706) ($5016) ($3748) ($2725)

2 lb/cow/d

decrease in

milk yield

1New robot investment only

– no new barn investment

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Affect of production and useful life on annual profitability for 4 robot system1

-6773

-2945-2545

1123

5369

9197

-$8,000

-$6,000

-$4,000

-$2,000

$0

$2,000

$4,000

$6,000

$8,000

$10,000

10 year robot useful life (3 robot installations) 15 year robot useful life (2 robot installations)

Ne

t A

nn

ua

l Im

pa

ct

Robot +4 lb milk/cow/d Robot +6 lb milk/cow/d Robot +10 lb m/cow/d1 New robot and barn investment – 30 year barn life

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Milk per robot

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Net Annual impact by milk yield per robot1

$0

$5,000

$10,000

$15,000

$20,000

$25,000

4500 lb/robot 5000 lb/robot 5500 lb/robot 6000 lb/robot 6500 lb/robot

Ne

t A

nn

ua

l Im

pa

ct co

mp

are

d to

40

00

lb/r

ob

ot/d

1Net annual impact per robot compared to 4000 lb/robot/d

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Visits per day, milking speed, cows per robot

and robot feed, residual feed and failed visits

are associated with more milk per robot.

Variable Effect1

Milking visits per day +++

Milking speed, lb/min +++

Cows per RMS unit +++

Robot feed, lbs/cow ++

Residual feed, lbs/cow/d ---

Failed visits/cow/day --

Refused visits/cow/day --Siewert et al, 20171P<0.0001

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Herds with automatic feed push up

had more milk per robot and milk

per cow.

Item Milk per

robot (lb)

Milk per

cow (lb)

Automatic feed push up 4581a 80.2a

Manual feed push up 3805b 69.4b

Contained bunk 4178a,b 73.9a,b

Siewert et al, 2017

a,b,c Means within variables differ (P < 0.05)

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Keys to increasing milk per robot High milk production per cow

– Fetch early lactation cows more frequently to maximize lactation potential

– Well balanced diets and excellent transition cow program

– High reproductive efficiency

– Excellent cow comfort

– Low somatic cell count

Minimize box time per cow– Cows that attached fast

– Cows that milk fast

– Carefully thought out milking permission settings Each 5 seconds more/milking = one less cow

Minimize free time– May increase the number of fetch cows in free flow systems

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Reduced box time per cow

Select for cows that milk and attach fast

Keep RMS equipment in top working

condition

Singe udders

Trim tail switches

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Milk per cow

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Milkings per day, milking speed, robot feed,

residual feed and failed milkings are

associated with more daily milk cow.

Variable Estimate

Milking visits per day +++

Milking speed +++

Robot feed ++

Residual feed, lbs/cow/day ---

Failed visits/cow/day --

Refused visits/cow/day --

1P<0.0001 Siewert et al, 2017

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First lactation cows get off to a slow start compared to older cows

But – once

adjusted first

lactation cows’

milking

frequency

exceeds older

cowsWeek of lactation Month of lactationSiewert, et al, 2017

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Fourth week milking frequency was

lower than desired for many herds

Siewert et al, 2017

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Pre-training heifers decreases fetching after calving

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Labor Efficiency

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Reported labor savings varies greatly

No labor savings (Steenveld et al, 2012; Wade et al, 2004)

18-19% labor savings (Gustafson, 2004; Mathijs,

2004)

>25% labor savings (Bijl et al., 2007, Finbin U of MN,

2017)

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Larger guided flow farms were more labor efficient

$1.56

$1.24

$0.94$0.75

$0.00

$1.00

$2.00

One robot 2-3 robots 4-5 robots 6-8 robots

$ p

er

cw

t

Guided Flow Data1

Labor cost/cwt Linear (Labor cost/cwt)

76 lbs/c/d

1Personal communication, Jeff Peissig (18 farms) ; 2 www.finbin.umn.edu (16 farms)

MN2

Finbin

Avg Top

40%

Cost/cwt $1.53 $1.42

86 lbs/c/d

87 lbs/c/d

94 lbs/c/d

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Fresh cow management

Special observation of fresh cows

Observe rumination, activity and manure

daily

Palatability of PMR as well as pellets is

important

Frequent fetching of fresh cows

Multiple feeds through robot box allows

flexibility

http://www.finbin.umn.edu/

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Feeding COWsistency

Consistent PMR dry matter

Consistent mixing and delivery

Consistent feed push ups

Consistent and frequent fetching

Highly palatable PMR

Highly palatable, consistent, high quality

milking box feed

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Focus on maintenance

Daily maintenance important

Equipment is expensive

Downtime is more expensive

Be prepared for higher repair costs

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Start up & Dealer support

Use proven tactics at start up

Successful start up minimizes financial stress

Good dealer support is essential

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Requires excellent business and management skills

Higher management than conventional system

Mindset to maximize output/robot

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SummaryMain management factors affecting profitability include:

Milk production per robot

Milk production increases compared to other milking systems

– Trading manual to more productive management labor

Labor savings compared to other milking system option

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Summary

Other factors include:

Robot useful life

Wage inflation

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This material is based upon work supported by USDA-NIFA under Award Number 2015-49200-24226.

Jim Salfer

E-mail [email protected]

Phone: 612.360.4506http://z.umn.edu/RobotParlor


milking robots do they pay? - dunn.uwex.edu 3 5 © 2017 regents of the university of minnesota. all...

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