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Profitability on dairy farms with automatic milking systems compared to farms with conventional milking systems

Author

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  • Hansen, Bjorn Gunnar
  • Herje, Hans Olav
  • Hova, Jonas

Abstract

The objective of this study was to explore differences in profitability between farms with automatic milking systems (AMS) and farms with conventional milking systems (CMS). To explore profitability, we analysed the gross farm income from dairy cows. Accounting and production data for over a thousand dairy farms were collected. Using kernel-matching, we made CMS farms more comparable to AMS farms. We then used ordinary least squares regression to estimate the effect of AMS relative to farm size and time passed since last investment in milking systems. The results show that farms must have 35 to 40 cows before AMS becomes more profitable than CMS. Further, any profitability gains will only be visible after a transitional period of approximately four years. Milk revenues are higher on AMS farms, and the difference increases with the size of the farm. Production-related costs are also higher on AMS farms.

Suggested Citation

  • Hansen, Bjorn Gunnar & Herje, Hans Olav & Hova, Jonas, 2019. "Profitability on dairy farms with automatic milking systems compared to farms with conventional milking systems," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 22(2).
    • Handle: RePEc:ags:ifaamr:284935
    DOI: 10.22004/ag.econ.284935
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    Cited by:

    1. Hansen, Bjørn Gunnar & Moland, Kathrine & Lenning, Monica Ilstad, 2019. "How can dairy farmers become more revenue efficient? Efficiency drivers on dairy farms," International Journal of Agricultural Management, Institute of Agricultural Management, vol. 8(2), August.
    2. Uter, Zachary, 2023. "Economic Assessment of Automated Milking Systems in Minnesota," Master's Theses and Plan B Papers 335419, University of Minnesota, Department of Applied Economics.

    More about this item

    Keywords

    Livestock Production/Industries;

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