ECONOMIC IMPACT OF AUTOMATIC MILKING SYSTEMS ON DAIRY FARMS

Authors: Rotz, Clarence - Al; Coiner, Colette; Soder, Kathy

Submitted to: Journal of Dairy Science
Publication Type: Peer Reviewed Journal
Publication Acceptance Date: 5/29/2003
Publication Date: 12/15/2003
Citation: Rotz, C.A., Coiner, C.U., Soder, K.J. 2003. Economic impact of automatic milking systems on dairy farms. Journal of Dairy Science. 86(12):4167-4177.

Interpretive Summary: Automatic or robotic milking systems are now reliable and practical for routine use on dairy farms. In Europe, at least 1,000 farms are using automatic milking, and several units are operating on Canadian farms. This technology is now used experimentally on a few farms in the USA awaiting approval by government regulatory agencies. Automatic milking systems offer two major benefits to dairy producers: an elimination of the labor required for the routine chore of milking and an increase in milk production. The initial cost of this milking equipment is high though, and the long-term economic benefit is dependent upon farm size and other farm management characteristics. A comprehensive whole-farm study showed that automatic milking systems were economically competitive with traditional milking systems on a farm size of around 60 cows. At this farm size, the capacity of one automatic unit was well matched to the number of animals milked, which made efficient use of this costly milking equipment. When multiple units were well matched to herd size (around 120, 180 and 240 cows), farm profitability using automatic milking approached that with traditional systems. On other farm sizes, the automatic milking equipment was not efficiently used and farm profit was less than that of traditional milking systems. As this technology is developed further, a reduction in the initial equipment cost and an increase in the useful life of the equipment will greatly improve the potential economic benefit of automatic milking. This information will help dairy farmers better plan for the adoption of automatic milking systems on their farms.

Technical Abstract: Automatic milking systems (AMS) offer dairy farmers relief from the time consuming and demanding routine of milking. This new technology is now reliable and practical for use on commercial farms, and it is widely used in northern Europe. Although this technology is beginning to be adopted in the USA, the economic impact on American farms is uncertain. A farm simulation model was used to determine the long-term, whole-farm effect of implementing AMS on farm sizes of 30 to 270 cows. Adoption of automatic milking provided a gain in annual net return for a farm size of 60 cows at a moderate milk production level (8,600 kg/cow) where the capacity of one AMS unit was used to its maximum. On other farm sizes with moderate production and on all farms with a high milk production (10,900 kg/cow), a loss in annual profit of $0 to $200/cow was found. Milk production level of the herd had only a small effect on the economic difference between traditional and automatic milking systems with a greater difference (about $50/cow) at higher production levels. The potential benefit of AMS was improved when a substantial (5 to 10%) increase in production was maintained through a greater milking frequency with automatic milking. A 20% reduction in the initial cost of AMS equipment or a 100% increase in the value of milking labor improved the economic return of AMS relative to traditional milking systems by up to $110/cow. However, farm profitability was reduced by $115/cow if the economic life of the AMS was reduced to 7 yr for a more rapid depreciation than that normally used with traditional milking systems.