FINANCIAL CONSIDERATIONS FOR YOUR ROBOTIC MILKING PROJECT

In my experience, the first thing that gets people to start thinking about robots is labor. First there is the struggle to find and retain good help. In addition, the chart below shows that average labor costs have increased from $1.64 per hundredweight in 2016 to $1.90 at the end of 2024 – and there is no doubt that the cost is even higher today. Even at those rates, labor alone may not justify the cost of robots. Most people planning robot projects also expect more milk, more data, and healthier cows. Calculating the real return on the project begins with accurate expectations for system capacity, cost of service, and capital investment.

Labor cost per cwt

Some robotic milking systems can and do produce over 7,000 pounds per robot per day. But think about what that means – 65 cows averaging 107 pounds per day. That’s why the US average production per robot is closer to 5,000 pounds. If your cows are not averaging 107 pounds, you should not expect 7,000 pounds per robot. Even if they are averaging 107 pounds, there will be a learning curve for you, and for the cows, and they probably won’t maintain 107 pounds through the first year. Budget for 5,000 pounds per robot. Similarly, top producing robots complete 180 milkings per day, but 150 is more realistic. Use 150 milkings to calculate the number of cows per robot. If you want 2.8 milkings, you should expect to milk 55 cows per robot. If those 55 cows average 90 pounds, you will have 5,000 pounds per robot. You can and should expect more milkings, and more milk, per robot as you and your cows learn to work with the system. A realistic production goal is the first step in evaluating the service costs and capital investment.

Realistic service costs are difficult to pin down. Most reliable estimates range between $10,000 and $25,000 per robot per year. That’s like the weatherman forecasting between 2” and 12” of snow. But consider the variables. Values in this range consistently include parts, labor, repairs, chemicals and maintenance. Extra water and electricity are usually not included. Cost of operation will increase as robots get older because more parts wear out and the warranty expires. Older models are more expensive to service than current models. Producers who do their own service spend less than those who regularly rely on dealer technicians. The number of milkings matters too. Service costs are quoted on an annual basis, but service is more frequent with more milkings per day. 1 or 2 major breakdowns will inflate the cost for that year. Above all, understand that your cost will vary from year to year. With 55 cows, service cost ranges from $180 to $450 per cow. At 5,000 pounds, it’s $0.55 to $1.40 per hundredweight.

The capital investment can vary almost as much as the service cost. So many people have

asked me what a milking robot costs. The best answer is, it really doesn’t matter. It doesn’t matter because there are so many other costs involved. Is it a green site project or a retrofit? How many robots are involved? With larger projects, the cost of the bulk tank, milk transport system, water and electrical systems are shared between more robots. Will the project involve adding manure storage and feed storage? The chart shows that the robotic milking equipment only accounts for $5,000 of the $18,000 per stall cost of a green site facility.

The bottom line is, there really are no cookie-cutter values for the cost to build and service a robotic milking facility. To get the right values for your project, establish realistic expectations for production, anticipate that service costs will vary from year to year, and include everything that your construction project requires. Cow Corner has experience with all of these variables. Our information is objective and unbiased and we can connect you with established producers who can share their experience.

Charts courtesy of Matthew McFadden - Farm Credit Mid-America