Economy analysis after introducing au-tomatic milking system

TEAN 2PAKR MIN KYUYANG DAE HEEHAN SOL HEE

PRJOECTGOAL

MANAGEMENT RESULT ANALY-SIS

3 4

1 2

INVESTMENT EFFECT ANALYSIS

CONCLUSION

CONTENT

2

About Ranch

Total number of cows : 89 cowsThe number of milk cow : 45 cows

Milk Production : 1.3 ton2 times milking -> delivery

Waiting time -> Stresses -> Low quality and pro-duction

manual milking -> Cause that can get hurt

Problems

Quick and accurate data acquisition

Reason for selection

Production system optimization (Production capability improvement)

Maximum profit creation

About Ranch

Datacollection

Data anal-ysis

Additional data acqui-

sition

Data com-parison

Draw a conclusion

System application

Plan

1About Goong-san ranch

54 milk cows

Side by side system swing arm

Product :milk

Necessary of consulting

<the necessary time for milking among their working

time >

• under 10 cows - 30.6%

• more than - 31.9%→ if the ranch scale is bigger, the working hours for

milking also increase2 < the necessary time for milking >• 2 times a day per one head : 10.0~13.4

minute→ more than 2 times milking that is impossi-

ble.< the annual necessary time for milk-

ing >• per one head : 65.3~80.8 hours

→ mostly dairy farm consists of family labor, re-cruiting is difficult in this labor environment

Necessity of consulting

2 •High per-sonel ex-pense

•Reduction of man-power and flexibility of labor

•Productiv-ity im-prove-ment through cow's env-iron-ment improve-ment

•Concen-trate business by reduc-ing work-ing time

Technical side

•Transfer business to suc-cessor

•Increas-ing farm scale

•Family size farm has viabil-ity

Industrial & econom-ical side

3Goal of project

More than 2 times milking

The person who can care the farm only alone regardless of farm's scale

Reduc-tion of man-power

Productiv-ity im-

provement

Milking system process

4# 1make comfortable milking environment for preven-tive getting stress.# 2doing milking stimulus for preventive mastitis# 3teat cleaning with elimination microbial contami-nants.# 4completely dry to teats that reduce bacterial contam-ination# 5after milking stimulus attach the teat cup within 45-90second# 6for effective milking attach the milking unit and keep# 7if milking is finish, block the vacuum pressure and then remove milking unit prevent over milking# 8after eliminate teat cup, readily do sterilize

Milking process in Goong-san

4•round up cows for milking in wait-ing area

•it has 2 line. each line accomo-dates 10 cows. worker manually attach the unit to one side cows. after milking attach unit to the another side.

•the cow not yet milking have to wait small wait-ing area

Data acquisition

5 ItemMea-suredValue

Item cost

Average daily milk

yield

1.4ton(30kg/

54 head)

Unit milk price

1,200 \

number of somatic cell

in milk210,000 cell Calf price 452,000 \

Breeding Period

14.5month(440days)

1st parturi-ent cow

cost3,500,000 \

Average number of

calving2.4 cows

Feed cost(per kg)

600\

<04.01~04.07 raw data>

Specific method for goal

6 Increase productivity

Increase milking fre-quency

Install the new system

Specific method for goal

6<Effect of milk quantity according to increase milking frequency>

Re-searcher Summary of study

R.E.Pearson 등(1979)

산유초기우에 대한 280 일 까지 2 회와 3 회 착유실험결과 3 회 착유가 2 회 착유보다 평균 10% 의 산유량 증가 효과가 있음

D.A.Poole(1982)

초산우와 경산우에 대하여 분만 후 20 두까지 2 회와 3 회 착유를 실시한 결과 초산우는 19.3Kg(3 회 ), 17.1Kg(2 회 ) (p<0.05) 산유량을 나타내었으며 , 경산우의 경우는 28.4Kg(3 회 ), 23.9Kg(2 회 ) (p<0.001) 을 나타내었다고 하여 각각 19% 와 13% 증가하는 것으로 나타났음

D.D.GISI 등 (1986)

캘리포니아 홀스타인 젖소 28 군을 가지고 실험한 결화 3 회 착유가 2 회 착유보다 전체군 평균 12%, 산유초기우 14% 의 산유량 증가

Diana B.Allen 등 (1986)

DHI(Dairy Herd Improvement) 의 기록을 이용하여 3 회 착유 7 개군 , 2 회 착유 7 개군을 시험한 결과 1, 2, 3, 4 산차까지 305 일 FCM 에서 3 회 착유가 2 회 착유보다 19.4, 13.5, 11.7, 13.4% 의 산유량 증가가 있었다고 하였음

M.A.Barmes 등 (1990)

100 두의 초산우 Holstein 을 가지고 시험한 결과 selection group 에서 3 회 착유시 2 회 착유보다 1 산차 , 2 산차에서 각각 25%, 30% 의 유량증가가 있었다고 하였음

6 <Example of new systems>

• Tandem system

• Pipe line system

• Herring born system

• Side by side system

• Automatic system(robot system)

Specific method for goal

In the next time

7introduce 5 system.

research the pros and cons of the

system

cost analysis about current budget

apply the optimum alternative

find out expected result

4

Supplement current system’s problem for improving milk yield Project

goal

1

Cut the

milk-ing

time

Increas-ing

Milk yield

Cut the waiting time for decreasing stress, increase

the number of times being milked. Improving milk

yield.

Using better system reduces milking time. Make just

a worker control the system regardless of scale. La-

bor cost can be reduced

4

Finding solution through ana-lyzing various milking system

2

Type of milking machine

Any type of milking system operation principle is similar. It can divided 2 system how system automatically carry milk. bucket and pipe line.And then if additional milking area has pipe line system, in that case we called milking parlor’s milk machineMilking machine is divided by the arrangement of milking stall. Herringbone, tandem, side by side, rotary, automatic milking sys-tem. Meanwhile well used pipeline milking system in tiestall installed top of the cattle, this is high line system. if pipe installed in bot-tom of the cow, this is low line system.

* Tie stall is a cow ties in cattle shed, it has’nt milking parlor. Just milk under tiedGrazing cow shed puts the cattle out to pasture. It has separately milking parlor.

analysis system

4

과제 목표

Tie stall

Pipe line This system is installed in Tie stall. Milk is transported by pipe line. The worker manually attach the units, he has to bent his waist. A worker can handle 3 units, he con-trol 30 cows. It suits for small scale ranch with tie stall 

시스템 분 석

Finding solution through ana-lyzing various milking system

2analysis system

4

Grazing parlor

HerringboneHerringbone milking parlor is parastichy array structure stall shaped fish bones. This is represen-tative way in Europe. small size handle 4 cows in a row , big size handle 16 cows in 2 raw. This sys-tem is simple compare to other systems. And stall installation fee is cheap. It hardly uses automatic facility up to 4cows in 2row. If 10 cows in 2rows, they use automatic system. a worker do milk above 100 cows. It suits small scale ranch which has below 40 cows.

The worker’s positioning task is located lower point milking machine below 65-90cm. it doesn’t need bent worker’s waist. So it can offer to comfortable working condition. And then the work does only in the milking parlor so it can reduce working distance and waste factor

Finding solution through ana-lyzing various milking system

2analysis system

4

Tendom systemHerringbone system is accommodate whole cows but this system is accommodate a cow. It has spe-cial stall’s gate. If a cow finish milk. It leaves par-lor and Next cow enter the gate. So this system has high turnover ratio compare to herringbone. But stall is complicate and working distance also long. After introduction of tendom system, it was not used for quite some time. Nowadays, high-priced automatic equipment is developed. It has also high turnover ratio. And per head of cattle in-stallation fee is cheaper than herringbone. Ranch tend to use tendom system. But it has some prob-lems like moving line or array method. It can’t in-stall large scale. Therefore, if the ranch automate 3cows per 2row, it can be suitable within 50 cows.

Finding solution through ana-lyzing various milking system

2analysis system

Grazing parlor

The worker’s positioning task is located lower point milking machine below 65-90cm. it doesn’t need bent worker’s waist. So it can offer to comfortable working condition. And then the work does only in the milking parlor so it can reduce working distance and waste factor

4

Side by SideCurrently, Goong-san ranch apply this system. 10 cows per 2row. Cows are vertically stand in work-ing passage. so length is long and width is short compare to herringbone system. It needs Au-tonomously Mooring gear or median strip for fixing position. unless it can milk, cows are not occupied in a parlor. Cow’s back part faced to a worker. Par-lor and worker get dirty by poop. So, we have to install washable poop plate .When 1st row fish work, it can milk in opposite site. Moving line and turnover ratio are shorter than herringbone. It’s suitable ranch which has less than 60 cows.

Finding solution through ana-lyzing various milking system

2analysis systemThe worker’s positioning task is located lower point milking machine below

65-90cm. it doesn’t need bent worker’s waist. So it can offer to comfortable working condition. And then the work does only in the milking parlor so it can reduce working distance and waste factor

Grazing parlor

4

Rotary systemThis way is whole cows can milk in this parlor at once. Each cow enter the Circular parlor stalls. It can ac-commodate about 100cows. It needs 2~3 worker. Installation cost is expen-sive. We can’t commonly find this sys-tem in our country.

Finding solution through ana-lyzing various milking system

2analysis system

Grazing parlor

The worker’s positioning task is located lower point milking machine below 65-90cm. it doesn’t need bent worker’s waist. So it can offer to comfortable working condition. And then the work does only in the milking parlor so it can reduce working distance and waste factor

4

Automatic milk-ing system

This system is optimized in ranch which has 50-70 cows. it operate to work computing. And it can handle most of the work. Therefore, worker can easily milk. This system can milk above 2 times. It is strong point. Because most of the system can milk just 1time. So, it get the limelight in Eco-nomic aspect. However, installation charge is too expensive so, the farm who has invested capital install this system. if we want to get economic ef-fect, we have to keep optimum level of cows. It can milk 3times per a cow without regard to time, automatically operate for milk.

Finding solution through ana-lyzing various milking system

2analysis system

Grazing parlor

The worker’s positioning task is located lower point milking machine below 65-90cm. it doesn’t need bent worker’s waist. So it can offer to comfortable working condition. And then the work does only in the milking parlor so it can reduce working distance and waste factor

28

Milking system condi-tion of selection

When we select milking system, we have to consider ranch structure, raising planning scale, the number of worker, milking time, power state, ability of mobilization fund and economic feasibility. As for ranch structure, tie stall has to be considered parlor’s in-stallation area. As for milking parlor, changing structure is diffi-cult so, at first time, we expect to the number of cows in near future.Milking time is contained preparatory work and arrangement time. Milking time of company farm takes 2h30m. private farm takes 1h30m.In tendom system, it takes 7m roated. In herringbone system, it takes 12m. preparatory work and arrangement time takes 30m. herringbone can milk 4cows per 2rows. However, milk speed is alter in depends on milky yield. High quality milk is needed spare time.

Condition selction

3

Result derivation through analyzing several of milking system 분

석결과

4

We use side by side milk system. Our analysis shows we can choose lottery system or automatic system. but in lottery sys-tem fits large scale ranch which has more than 100 cows and it keeps above 2 workers. In automatic system, it fit one man ranch, our scale also fitted so we want to apply automatic sys-tem. it can mange efficiently.

Resultderivation

4

WHY DO WE WORK THIS PROJECT

Milking is hard to delay and substitute to work in dairy management.

They have to manually work in entire process more than twice a day.

So, it is really hard Especially, after appearing high producing cow,

we need to increase frequency of milking. like 3times above. Com-

pare to before. It is required to plan preparation for substitute labor

so that owner lead management efficiently

GOALSUBJECT

1

RE-DUCED WATING

TIME

INCREASE IN MILK YIELD

cut waiting time. It can reduce stress

And increase in frequency of milking, we can get much

milk yield.

we have to change the system for re-

ducing milking time and labor.

31

WHAT IS THE AUTO-MATIC MILKING SYSTME GOAL

SUBJECT

1

<BUCKET MILKING SYSTEM><HERRINGBONE MILKING SYSTEM><TENDOM MILKING SYSTEM>

<AUTOMATIC MILKING SYSTEM>

32

Businessperformance

2FACILITIES CASH INFLOW COMPARI-SONwe analyze investment effect about automatic milking facility, which is substitute current milking system using real option. Management scale is based on 60 cow criteria.Cost of investment in current system is 70~80 million won but automatic system is minimum 2.6 hun-dred million won and maximum 3.3 hundred won. Average amount of money is 2.8 to 3 hundred won. Extra cost which is needed for installment of automatic system is required 48 milion won and operation expense. it can cover quota which can be delivery of raw milk over producted.installed automatic system's main benefit in ranch is as the followingto begin with, in personnel expenses side , 2 worker is needed in current system. however, a worker is needed in automatic system.secondly, frequency of milking twice a day is increased such as 3-4times a day. so, milk yield is increased 10-13%Current system can produce annually 9605L per head. Automatic system can produce 10666L. Price per liter is 759\. Extra production’s unit cost sale is 575\. Compare to current system’s profitability, farm can be earned above36~48 million won.

DivisioncurrentSystem

AUTOMATIC MILKING SYSTEM

Current milk yield

surplus total

Milk Yield 576,300 576,300 63,393 639,693

Cost 759 759 575 759 - -

Total milk yield

437,411,700

437,411,700

36,450,975

48,115,287

473,862,675

485,526,987

( unit : won, L/60 cow)

33

2COMPARING INBEST-ING EXPESNSE OF ACILITIESIt offers many convenient such as Mastitis prevention, keeping individual ranch control system and more usefully make working time.However, automatic system is too expensive according to depreciation. management scale’s invest-ing expense is 286,403 thousand won.Farm additionally has to invest 275,000\ per liter For enhancing Extra milk’s selling price. If ranch buy 50%~100% of whole milk yield quarter quantity, it requires extra cost like 23,881~47,476 thousand won.

( unit : won/year)

※ Purchasing quarter(50~100%) for selling extra milk yield : 23,881~47,762 thousand won

A COW 60 COWS A COW 60 COWS

labor charge 230,000 13,800,000 115,000 6,900,000

own labor charge 846,970 50,818,200 677,576 40,654,460

feed cost 2,547,369 152,842,140 2,639,776 158,386,560

cost of maintenance 646,501 38,790,060 646,501 38,790,060

treatment charge 32,400 1,944,000 21,456 1,287,360

the cost of materials 111,818 6,709,080 189,737 11,384,220

machinery depreciation 85,238 5,114,280 483,333 28,999,980

total 4,500,296 270,017,760 4,773,379 286,402,740

CURRENT SYSTEM AUTOMATIC SYSTEM

Businessperformance

34

INVESTMENTEFFECT

3FARM’S INVESTMENT EFFECT ABOUT AUTOMATIC MILKING SYSTEM IN-STALLATION

1) Investment effect analysis of Milk ingredient which is same grade

milks using automatic system, ingredient likes somatic cell keeps same grade. Investment effect analysis is as in the following. Therefore, according to quarter condition, payment per liter is 759\, cost of extra milk yield is 575\, interest rate is 5%, and we suppose that period of depreciation is 10 years. ( unit : million won/60 cows)

DIVISIONDelivery of ex-tra milk yield

Delivery of purchase raw

milk

Delivery of raw milk to extra

quarter

Interest rate 5% 5% 5%

Period of depre-ciation

10 years 10 years 10 years

NPV 101.2 165.3 253.3

Option value 0.2 5.1 79.2

e-NPV 101.4 170.4 332.5

Minimum re-quired milk cows

59 cows 54 cows 51 cows

※ on the basis of 60 cows criteria

35

AUTOMATIC MILKING SYS-TEM INSTALLATIONS ABOUT FARM’S INVESTMENT EF-FECT

Check the Outcome of investment effect. At first, when we handle the additional milk yield, we suppose that we sell extra milk instead of buying a quarter. Net present value is 101.2 million won for 10years which is depreciation period. Option’s Investment value by Changing raw milk cost is 0.2 million won. So, whole investment effect is estimated 101.4 million won.On the other hand investment effect is 170.4 million won. Net present value is 165.3 million won and option value is 5.1 milion won Lastly, if additional milk without quarter adds their current milk yeild investment effect is 332.5 million won.

INVESTMENTEFFECT

3

36

2) Investment analysis by dropping one grade of somatic cell (1->2)

When somatic cell’s grade drops one grade, investment effect analysis is as in the following.Raw milk’s cost per liter is 731.19\ by delivering quarter, extra raw milk is 575\, interest rate is 5% and we suppose that period of depreciation is 10 years.

( unit : million won / 60 cows)

DIVISIONDelivery of extra

milk yieldDelivery of pur-chase raw milk

Delivery of raw milk to extra

quarter

Interst rate 5% 5% 5%

Period of deprecia-tion

10 years 10 years 10 years

NPV -22.6 27.9 109.1

Option value - - 0.4

e-NPV - 27.9 109.5

Minimum required milk cows

- 59 56

INVESTMENTEFFECT

3

※ on the basis of 60 cows criteria

AUTOMATIC MILKING SYS-TEM INSTALLATIONS ABOUT FARM’S INVESTMENT EF-FECT

37

Analysis result Installment of invest effect Selling extra raw milk with-out quarter Net present value is -22.6 million won.Increase in raw milk to sell without purchasing quarter the extra price to sell to the installation of the automatic milking system. investment effect is that net present value is -22.6 million won for 10 years. Therefore, the increase in production of extra raw milk and sell the surplus is of no effect. Investment effect for 10years is 27.9 million won with quarter For sell-ing extra raw milk.Investment option value is 0\.Investment effect For selling extra raw milk without quarter just using current quarter is 109.1 million won.

INVESTMENTEFFECT

3AUTOMATIC MILKING SYS-TEM INSTALLATIONS ABOUT FARM’S INVESTMENT EF-FECT

38

CON-CLU-SION

4CONCLUSION

Analyzed result about Installation Automatic system, average of pur-chase unit cost is 29 million won in abroad. So initial investment is too excessive. But if extra milk yield handle by purchasing quarter on 60 cow criteria It is worth 170 million won, sell extra milk yield it is worth 101 million won.Earning the investment effect, it maintain a minimum cows on the form by the sales type each 51,54,59 cows. As a result, initial purchasing cost is expensive, so small size ranch feel burden. However if milk quality keep 1st grade, it is worth to in-vest. this system with a wide variety of features, but it also has some disad-vantage, such as difficulty in use, frequently break down, managerial difficulty. Therefore, installation of automatic milking system is re-quired careful selection.

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