Dairy Modernization
Transcript of Dairy Modernization
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Budgeting
for a
Dairy Modernization
David W. Kammel
Professor
BSE
UW-Madison
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WI and NY Dairy Farms by Herd Size, 2007*
0
2,000
4,000
6,000
8,000
1-29Head
30-49Head
50-99Head
100-199Head
200-499Head
500 +Head
WI
NY
WI 11,400 herds or 80% of 14,200 herds
NY 4,250 herds or 75% of 5,700 herds Average herd size NY 118 cows (2012)
Average herd size WI 111 cows (2012)
NY 5,150 dairy herds (2012)
WI 11,490 dairy herds (2012)
NY ???? (2014)
WI 10,500 dairy herds (2014)
*USDA/NASS
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Milk Cows by Type of Housing
Wisconsin, 2010
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Common Goals
• What are your goals for the dairy farm business?
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Common Goals
• Economic
– Manage Debt Load
– Low Capital Cost
– Improve Profitability
• Labor
– Milk in a Reasonable
Amount of Time
– Use Existing Labor
Force
– Improve Labor
Efficiency
• Improved Quality of Life
– Increase Family Time
• Improved Health/Safety
• Transition In/Out
– Allow Senior Partner to Exit Operation
– Allow New Partner to Enter Operation
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Dairy Modernization
Improved cow comfort
Increased dry matter intake (DMI)
Labor efficiency (2 x more cows)
Improved operator health and safety
Increased profit
Improved quality of life
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Farmstead Master Plan
A farmstead master plan is a set of
drawings and documents that describers
the site plan with:
Physical boundaries
Natural boundaries
Existing facilities
Planned/ Proposed improvements
Define the benefits/limits of the site
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Limitations to growth
What are the limitations of growing
your family dairy farm business?
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Limitations to growth
Physical Resources
– Site Conditions
• Topography
– Elevations/slopes
• Drainage Patterns
• Streams
• Water Bodies
• Water well
– Current Facilities
• Parlor Size/Capacity
• Housing
• Manure Storage
• Feed Storage
Physical Resources
– Site Restrictions
• Land Base (Acres)
• Property Boundaries
• Setbacks
• Roads
• Zoning
• Utility Corridors
– Electric
– Gas
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Limitations to growth
Personal Resources
– Goals
• Personal
• Business
– Labor
• Availability
• Management
– Peer Pressure
– Neighbors
• Ag
• Non-Ag
Economic Resources
– Equity
– Debt Capacity
– Risk Tolerance
• Generational
differences
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Strategies to Manage a Small
Budget
“Build in Phases”
• Phase 1 Build new cow barn
– with short term manure storage
• Phase 2 Retrofit a parlor in the stall barn
• Phase 3 Build feed storage
• Phase 4 Add more cow barn(s)
• Phase 5 Build new parlor
• Phase 6 Add more cow barn(s)
• Phase 7 Build new long term manure storage
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How much for a new Freestall Barn
Parlor, Feed Storage, Manure
Storage on a new site for
150 cows?
$300,000
$600,000
$900,000
$1,200,000
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Step 1
Build cow barn for cow
comfort
Housing System Design which:
Provides adequate space for resting, eating,
drinking, and walking
Protects the cow from severe environmental
conditions
Limits the likelihood of injury and/or disease
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Facility Costs in Wisconsin
• Housing Cost
$2,000-$3,000/ cow
• Milking Center Cost
$20,000 - $25,000/ milking stall
Double 8 parlor cost - $320,000 - $400,000
• Feed Storage
$500/ cow
• Manure Storage
$700/ cow
• Total Capital Cost
$8,000-$10,000/Cow
• Calf Housing Cost
$750/ calf
• Heifer Housing Cost
$1,000 - $1,500/ animal
• Bio Gas Generation
• Plug Flow - $1100/cow
• Mixed Flow - $900/cow
• Sand Separation $750/cow
• Solid Separation $200/cow
• Freestall Bedding Cost Sand @ $11/ Mton
23 kg/cow-day = $.25/cow-day
Wood Shavings @ $110/Mton 7 kg/cow-day = $.75/cow-day
Biogas solids @ $33/Mton 10kg/cow-day = $.33/cow-day
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Dairy Modernization Impacts
Pre
Modernization
Post
Modernization
Change
Average Herd Size 82 203 + 121
Average Production per
Cow (lbs)
20,245
21,684
+ 1,439
Milk Production per
Farm Annually (lbs.)
1,660,090
4,401,852
+ 2,741,762
Annual Hours of Labor
per Cow
51.8
26.0
- 25.8
Milk Cows / F.T.E. 35 50 + 15
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Pre and Post Labor Requirements Average Per Cow/Day
**P= <.001 *P= <.01
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Pre and Post Labor Requirements Average Per Cow/Day
**P= <.001 *P= <.01
8.51 minutes/cow-day
4.27 minutes/cow-day
- 4.24 minutes/cow-day
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Economic Impacts from Reduced Hours Labor
Per Cow
Reduction/Cow/Year Dollar Impact
Milking Setup/Cleanup 1.16 hours @ $12/Hour = $13.92
Milking Time 12.05 hours @$12/Hour = $144.60
Feeding Time per Cow 5.72 hours @ $12/Hour = $68.64
Time Handling Cows 1.58 hours @ $12/Hour = $18.96
Maintaining Stalls 2.92 hours @ $12/Hour = $35.04
Handling Manure 2.37 hours @ $12/Hour = $28.44
Totals: 25.80 Hours/Cow/Year $309.60/Cow/Year
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Milking System Throughput
Change = 21.4 cows/person/hour
P = 0.001
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Step 2
Build a Milking Facility
Options
1. Remodel Parlor into stall barn and use milk
house
2. Add shell for parlor to stall barn and use stall
barn for holding area and use milk house
3. Build new shell at new site with cow barn
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Parlor Annual Capital and Labor Costs
Tie Stall • $42,048/year labor
Low Cost Remodeled Parlor • $25,000-capital ($4,250 annual)
• $21,024/year labor
Medium Cost Remodeled Parlor • $50,000-capital ($8,500 annual)
• $21,024/year labor
High Cost Remodeled Parlor • $100,000-capital ($17,000 annual)
• $21,024/year labor
New Parlor • $320,000 ($54,400 annual)
• $21,024/year labor
AMS • $500,000 ($85,000 annual)
• $7,500/year labor
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
Co
st $
/cw
t-y
r
TS LCP MCP HCP NP AMS
System
Labor Cost
Capital Cost
$1.40
$.84
$1.27
$.98
$2.51
120 cows 25,000 lbs
@ $12/hr labor
7 year payback @ 5% $3.08
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Annual Cost Payback Timeframe
Tie Stall
Labor Only
Medium Cost Remodeled
Parlor = $50,000
7 year $17,000/year
10 year $13,000/year
20 year $4,000/year
$0.00
$0.50
$1.00
$1.50
$2.00
Cost
$/c
wt-
yr
TS 7 Year 10 year 20 year
Payback
Labor Cost
Capital Cost
$1.42
$.98 $.92 $.83
120 cows 25,000 lbs
@ $12/hr labor
@ 5%
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Annual Parlor Throughput Cost
Tie Stall
25 cph = $42,048/year labor
Medium Cost Remodeled
Parlor = $50,000
New Parlor Cost = $320,000
50 cph = $21,024/year labor
60 cph = $17,520/year labor
80 cph = $13,140/year labor
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
Co
st
$/c
wt-
yr
25
cph
50
cph
60
cph
80
cph
NP
60
cph
Parlor Throughput
Labor Cost
Capital Cost
$1.42
$.98 $.86 $.72
120 cows 25,000 lbs
@ $12/hr labor
@ 5% $2.39
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Strategies to Manage a Small Budget
for the Milking Center
1. Space
2. Parlor Stall Choice
3. Milking Equipment Choice
4. Parlor Interior Finish
Receiver Group Location
Milking Unit Storage and Cleaning
Location
5. Sweat Equity
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Strategies to Manage a Small Budget
“Space ”
• Use the existing milk house in a new way
• Use the existing stall barn space in a new way
• Minimize moving posts and structural changes
• Minimize new construction
– Add new space if necessary
• Value of existing facilities
– Structure
– Electrical
– Plumbing
– Value can be $75,000 - $100,000
• New Parlor Space $30-$40/s.f.
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Use the Existing Stall Barn
in a new way
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Use the Existing Milk
House in a new way
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Strategies to Manage a Small Budget
“Parlor Stall”
• Home built parlor stall < $3,000 for steel for double 8 (16
stalls)
• Dealer built parlor stall, $ Steel x 2 for $ Labor = $400-
$500/stall
• Buy used parlor stall, $2,500-$5,000/stall
• Buy economical new parlor stall, $5,000-$10,000/stall
• New parlor stall, $10,000-$15,000/stall
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Parlor Equipment Costs*
Parlor
Type
Average
Number
of Stalls
Number of
Parlors
Cost per
Milking Stall
Autoflow 9 2 $14,800
Flat 11 5 $3,550
Herringbone, used 16 2 $3,925
Herringbone, new 16 7 $7,575
Parallel, used 24 2 $6,775
Parallel, new 22 26 $9,250
Rotary 28 2 $7,750
Swing 20 3 $2,650
* FCA Cost Data 2007
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Parlor Cost per Milking Stall 2008 Dollars
Parlor Stall Type
Retrofit Construction (n=55)
New Construction n= 34
Flat barn $3,360 (n=6)
NA
Parabone $3,845 (n=30)
$6,016 (+$2,171) (n= 10)
Herringbone $9,657 (n=8)
$18,769 (+$9,112) (n=3)
Parallel $7,478 (n=11)
$22,361 (+$14,883) (n=18)
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E xterior Footing
Interior W all to W all* N ote: B ond all steeland reinforcing to formequipotential plane andbond to grounding system
2"x2" S quare Tubeor 2" D iameter P ipe
B reast R ail
48" - 54"
7' 6" 0' 8"
Frames S paced@ 6' -8' O.C . Typical
3' 6"
6' 0"
3' 0"2' 0"
24" +/- 2"32" +/- 2"
24" +/- 2"
D imensions may vary
A djustableJersey-H olstein
1/2"x8"anchor bolt
1' 6"
0'2"
0' 8"
1' 6" 1' 6"
0' 6"
40" +/- 2"
22' 8"
H orizontal #4 R einforcingB ars @ 12" O.C .
W ashed S tone
V ertical #4 R einforcingB ars @ 18" O. C .
R umpR ail
K ick R ail
A TOS upport
A FrameOption
0' 6" Minimum
1" C row nC hamferC orner
9' 0"
0' 3"D rop
3' 0"
24" minimum
21' 0"
6" compactedgranular fi l l
V ertical #4 R einforcingB ars @ 18" O.C .
2 - # 4 H orizontal R einforcingB ars run continuously
2- #4 H orizontal R einforcingB ars run continuously
H orizontal #3 R einforcingB ars @ 12" O.C . B oth W ays
H orizontal #4 R einforcingB ars @ 12" O.C .
H orizontal #3 R einforcingB ars @ 12" B oth W ays
N ote* * 12" S teel D evelopmentLength on all bars
0' 8"
3' 0"
0' 8"
0' 5"
0' 8"
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10' 0"
8' 0"
7' 6"
22' 4"
8' 0"
8' 0"
8' 0"
8' 0"
8' 0"
8' 6"
2' 0"
7' 6"
2' 0" 2' 0"2' 0"
St eps
of Cow
Cent er Line
Par king
Angle
Adjust able
Br east
Rail
O pt ion B
4' 0"
Pendulum
G at e
70o
2%
Slope
O pt ion A
Rail
Br east
Adjust able
2%Slope
2%Slope
Cr own 1"
Cow
Plat f or m
Ext end
Hinged
G at e
Par lor
15 Squar e
Feet per cow
St eps
48" - 54"
Adjust ableJer sey - Holst ein
Fr am eSpacing6- 8' O . C.
Var ies
Var ies
Holst ein 27" x # St alls + 24"Jer sey 24" x # St alls + 24"
O pt ionCont inuousG ut t er orFloor Dr ains@ 6- 8' O . C.
Dr ain
M ilking UnitSpacing24" Jer sey27" Holst ein
Dr ain
O pt ionalG r at e w/ Dr ain
O per at orAr ea
CowPlat f or m
Holding
Ar ea
3- 5%Slope
ExitAr ea
16"
Var ies
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Used parlor stall
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Strategies to Manage a Small Budget
“Milking System”
• Recycle and use existing milking system in different configuration
– Swing line milking system
– Use existing milking units
– Use existing automatic takeoffs
• Buy good used milking system
• Buy economical milking system
– Upgrade at a later time when cash is available
• Add new technology at a later time
– Low Line
– Additional units
– ATO
– RFID
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New vs. Used
n = 89 n = 91
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Use existing units and takeoffs
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Use existing units and takeoffs
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Strategies to Manage a Small Budget
“Receiver Group Location and Storage and
Cleaning of Milking Units”
• No need to finish interior of parlor
– Receiver group location in milk house space
– Mini milk house in parlor
– Store and Clean milking units in milk house space
– Dry Parlor
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Receiver Group in Milk House
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Receiver Group in Milk House
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Equipment
Upgrades
Clean Units in Milk House
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Mini milk house
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Low Line
Receiver Group
In Parlor
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Dry Parlor
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• Milk house grade finishes in parlor space – Receiver group location in parlor space
• High Line
• Low Line
– Store and clean milking units in parlor space
Strategies to Manage a Small Budget
“Receiver Group Location and Storage and
Cleaning of Milking Units”
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Receiver Group in Parlor
Mid High Line
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Receiver group in Parlor
Low Line
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Clean Units in
Parlor
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Clean Units in
Parlor
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Clean Units in
Parlor
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Strategies to Manage a Small Budget “Sweat Equity”
• Use the skills you have
– Demolition
– Carpentry
– Welding
– Concrete
• Neighbors and friends
– (Parlor raising)
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Low Cost Parlor
It can be done!
It has been done!
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Think outside the box
• Calculate how many
cows it will take to
pay for a new parlor
• Calculate a parlor
budget based on
the number of cows
you want
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$1,000 Parlor
$1,000 Truck
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$17,000 Parlor
$17,000 Truck
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$25,000 Parlor
$25,000 Truck
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$30,000 Parlor
$30,000 Truck
![Page 62: Dairy Modernization](https://reader034.fdocuments.us/reader034/viewer/2022051318/5866aa541a28abf73f8b8bc0/html5/thumbnails/62.jpg)
$50,000 Parlor
$50,000 Truck
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$70,000 Parlor
$70,000 Truck
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$100,000 Parlor
$100,000 Truck
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$150,000 Parlor
$150,000 Truck?
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$500,000 Parlor
$500,000 Truck?
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Challenges to Keep Cost Low
• No plan or design work
• Know what you want (Meet your goals)
• You are in charge, (It won’t just happen)
• Visit and milk in a similarly designed
parlor
• Find an equipment dealer that is willing
to work with you
• Find contractors that are willing to work
with you
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Goodbye!