Although labor savings are important robotic benefits, milk production and milk value drive the economic equation.
Increased production drives profitability
It’s the $180,000 question. Will that type of investment for a robotic milker actually pay for itself?
The answer: It’s complicated, and it depends. The three biggest variables are labor savings, increases in milk production and milk prices.
The complex interrelationship of these factors prompted Jim Salfer and Bill Lazarus, both with the University of Minnesota, to develop a spreadsheet to help answer the question. Salfer in an Extension dairy educator; Lazarus is an Extension economist.
The Minnesota spreadsheet is based on an earlier version developed by Iowa State. The Minnesota version is a partial budget that looks at increased returns and expenses. It is best used comparing a switch in milking systems to a robotic milker, and it is not designed to look at expansion scenarios.
Labor savings and the elimination of labor issues are often touted as the driving forces toward robotics. But both can sometimes be difficult to quantify.
That’s particularly true for small and mid-sized farms that often provide family labor for some or all of the milking. Unless that family labor is redirected into other areas that improve nutrition, reproduction or herd health, savings won’t contribute to cash flow or profitability, says Salfer.
Managing less labor—recruiting, training, supervising and so forth—is also touted as a big advantage of robotic milkers. Here again, if that time and effort isn’t redirected into other profit centers, it’s difficult to quantify the monetary benefits, he says.
Increased milk production is another often-cited benefit of robotic milkers, especially for herds milked 2X. The belief is that robotically milked cows will visit the robot close to three or more times per day, thus getting the benefit of increased milking frequency.
Salfer and colleagues are collecting data from some 50 farms in the Midwest with robotic milkers. Their experience is that cows on these farms visit the robots from 2.6 to 3.0 times per day, averaging 2.8X. The average increase in production attributable to this increased frequency is just 3 to 6 lb., and not nearly the 7 to 10 lb. one might expect with 3X.
"Robots in and of themselves won’t get you that much more milk—maybe 3 to 6 lb. per cow per day," says Salfer. "As one producer told me, ‘Management makes milk; robots only harvest it.’"
Some producers do see production jump 8 and even 12 lb. per cow per day. But that extra milk likely comes from better management or higher quality feed, made possible by freed-up labor.
And the flip side is also true. "If you get no milk increase, it gets pretty ugly," Salfer says.
Because of high capital costs, owners have to focus on milk per robot and maximizing milking time.
From his survey work, herds were averaging about 75 lb. of milk per cow, with a range of 57 lb. to 100 lb. The average might seem low, but all cows milked through the robot were included in that number. That meant fresh cows, sick cows and lame cows—all were averaged.
Milk price is another driver. A $17.50-per-cwt average price might be breakeven in some herds with high milk production. A $20 price could typically push robots into profitability, but a $15 average would bleed budgets red.
- March 2014