ECONOMICS OF ROBOTIC MILKING ON A DAIRY FARM IN THE UNITED STATES

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

Submitted to: Proceedings of the XXVIII International Congress of CIOSTA-CIGRV
Publication Type: Proceedings
Publication Acceptance Date: 6/20/2001
Publication Date: 6/27/2001
Citation: Rotz, C.A., Coiner, C.U., Soder, K.J. 2001. Economics of robotic milking on a dairy farm in the united states. Proceedings of the XXVIII International Congress of CIOSTA-CIGRV. 1:115-120.

Interpretive Summary: Automatic or robotic milking systems have become practical for routine use on dairy farms. These systems offer a method for relieving the farmer from the time consuming and demanding routine of the milking chore. In Europe, about 700 farms are using automatic milking, and several systems are now operating on Canadian farms. In the U.S., a few research and commercial farms are adopting this technology this year on an experimental basis, awaiting approval by government regulatory agencies. The initial cost of an automatic milking system is high and the long-term economic benefit is dependant upon the management characteristics of the farm. Automatic milking is best suited to smaller dairy farms that are expanding and thus have a need to replace their milking facility. This technology promises a reduction in farm labor and an increase in milk production per animal. With increased production, more feed is required and the milk price may decrease due to a small decrease in the concentration of milk solids. Whe all of these factors were integrated in a whole farm model, the long-term economic benefit was found to be marginal at best. The only scenario where robotic milking increased farm profit was when high producing Holstein animals were used and the number of milking animals was well matched to the maximum capacity of the milking system. Therefore, the early adopters of this technology in the U.S. will be smaller dairy farms with high producing animals and a need to expand their milking facility. For best economic return, the herd size on the farm must be set to maximize efficient use of the milking system.

Technical Abstract: Automatic (robotic) milking systems are just becoming available in the United States. The early adopters of this technology are expected to be the smaller dairy farms in the northeastern and upper midwestern states. A whole-farm simulation model was used to determine the impacts of implementing this technology on such a farm with a Jersey herd in southern Pennsylvania. Impacts included an increase in feed consumption, increased milk production, reduced labor use and costs, a large increase in the annualized cost of milking equipment, and a decrease in farm net return of $30,000 per year. When the Jersey animals were substituted with a higher producing Holstein herd, fewer animals were needed to produce the same level of income from milk sales. With fewer animals, one less robotic milking unit was required, reducing the initial investment by $175,000. With this scenario, the use of the automatic milking system provided a small ($5,000 per year) decrease in the long-term net return to the farm. When the animal numbers for either the Jersey or Holstein herds were increased to better match the full capacity of an automatic milking system, the long-term economic benefit improved to an $18,000 loss with the Jersey herd and an $8,000 increase in annual profit for the Holstein herd. As this technology is adopted in the United States, the greatest economic benefit can be expected on farms with smaller, high producing herds where the number of animals is well matched to the capacity of the milking system.