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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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© 2017 Regents of the University of Minnesota. All rights reserved.
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
1/2/2018
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© 2017 Regents of the University of Minnesota. All rights reserved.
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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© 2017 Regents of the University of Minnesota. All rights reserved.
• “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
1/2/2018
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© 2017 Regents of the University of Minnesota. All rights reserved.
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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© 2017 Regents of the University of Minnesota. All rights reserved.
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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© 2017 Regents of the University of Minnesota. All rights reserved.
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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© 2017 Regents of the University of Minnesota. All rights reserved.
Free flow traffic system
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© 2017 Regents of the University of Minnesota. All rights reserved.
Milk first guided flow
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© 2017 Regents of the University of Minnesota. All rights reserved.
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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© 2017 Regents of the University of Minnesota. All rights reserved.
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
1/2/2018
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© 2016 Regents of the University of Minnesota. All rights reserved.
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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© 2017 Regents of the University of Minnesota. All rights reserved.
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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© 2017 Regents of the University of Minnesota. All rights reserved.
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)
U of MN Finbin www://finbin.umn.edu, data from 2015-2016
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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)
U of MN Finbin www://finbin.umn.edu, data from 2015-2016
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© 2017 Regents of the University of Minnesota. All rights reserved.
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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© 2017 Regents of the University of Minnesota. All rights reserved.
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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© 2017 Regents of the University of Minnesota. All rights reserved.
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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© 2017 Regents of the University of Minnesota. All rights reserved.
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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© 2017 Regents of the University of Minnesota. All rights reserved.
Four robot system compared to D8 Parlor1
14589
17765
21328
5967
10987
16445
$0
$5,000
$10,000
$15,000
$20,000
$25,000
1% wage inflation 2% wage inflation 3% wage inflation
Ne
t A
nn
ua
l Im
pa
ct (R
ob
ot
–P
arlo
r)
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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© 2017 Regents of the University of Minnesota. All rights reserved.
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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© 2017 Regents of the University of Minnesota. All rights reserved.
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
1% wage inflation 2% wage inflation 3% wage inflation
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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© 2017 Regents of the University of Minnesota. All rights reserved.
$32.30
$29.59
$27.05$27.23
$24.95
$22.91
$0
$5
$10
$15
$20
$25
$30
$35
1% wage inflation 2% wage inflation 3% wage inflation
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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© 2017 Regents of the University of Minnesota. All rights reserved.
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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© 2017 Regents of the University of Minnesota. All rights reserved.
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
Robot lifespan (years)
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
Robot lifespan (years)
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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© 2017 Regents of the University of Minnesota. All rights reserved.
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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© 2017 Regents of the University of Minnesota. All rights reserved.
Milk per robot
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© 2017 Regents of the University of Minnesota. All rights reserved.
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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© 2017 Regents of the University of Minnesota. All rights reserved.
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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© 2017 Regents of the University of Minnesota. All rights reserved.
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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© 2017 Regents of the University of Minnesota. All rights reserved.
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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© 2017 Regents of the University of Minnesota. All rights reserved.
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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© 2017 Regents of the University of Minnesota. All rights reserved.
Milk per cow
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© 2017 Regents of the University of Minnesota. All rights reserved.
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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© 2017 Regents of the University of Minnesota. All rights reserved.
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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© 2017 Regents of the University of Minnesota. All rights reserved.
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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© 2017 Regents of the University of Minnesota. All rights reserved.
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
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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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© 2017 Regents of the University of Minnesota. All rights reserved.
Keys to success with robots
Focus on maintenance
Daily maintenance important
Equipment is expensive
Downtime is more expensive
Be prepared for higher repair costs
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Keys to success with robots
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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Keys to success with robots
Requires excellent business and management skills
Higher management than conventional system
Mindset to maximize output/robot
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© 2017 Regents of the University of Minnesota. All rights reserved.
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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© 2017 Regents of the University of Minnesota. All rights reserved.
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