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American ®

In This Issue

Vol. 43 No. 12 • December 2017

Columns

6 Publisher Statement Industry News 8

Trending news from around the dairy world.

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12 16 24

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Calf Care for Winter Weather Don’t let calf care take a back seat during the up and coming cold weather. Calves are the future of the dairy farm, and it is essential for future success to provide adequate and consistent care for each and every calf during cold weather conditions.

Trends in Dairy Cattle Breeding and Genetics This article talks about tools to develop a genetically superior productive and profitable dairy herd and what methods are the best to use.

Dairy Robotic Milking Systems What are the Economics? Over 35,000 robotic milking systems (RMS) units are operational on dairy farms around the world. This article explains the main reasons dairy producers install milking robots to improve their lifestyle and to expand without hiring additional labor.

Sponsored Features

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Industry Features

Embracing Oregano Oil in Feed Supplements Oregano oil has proven to be active component of natural animal feed supplements—leading many dairy farmers and ranchers to turn to RopaPharm International, Mensink’s leading animal feed supplement company—to meet their animals’ dietary needs and improve the health of livestock.

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Publisher Statement

Where did the year go? I say it every year around this time, but it’s hard to believe that the year is coming to an end! It seems the older I get the faster the years fly by. Maybe it’s the busy schedules we hold or is it we pay more attention to time as we age, or quite possibly a combination of both? Nevertheless, the calendar is flipping the page to a new year, which always makes me reflect back on everything that has taken place during the year both personal and business related. Personally, I had a lot of changes! I won’t bother you with the details, as some were good and some were not so good, but such is life and the best we can do is to cherish the good and deal with the bad the best we can and look to turn those into a positive. Not only were there changes personally for me, there were also changes in American Dairymen Magazine. At the start of the year, we as a team sat down and reviewed our publication. Looked at our layout, our content and our marketing opportunities, then discussed what could we do to move our publications to the next level. As many of you probably have noticed we added sections: • Industry news- trending news from around the dairy world • Columns- informational articles on different topics in the dairy industry • Sponsored Features- paid content opportunities available to our advertising partners • Market Place- your go to section for equipment and services

American ®

Products and Services

for American Dairymen

Vol. 43 No. 12 • December 2017

President/CEO Gale McKinney VP/CFO Audra McKinney Group Publisher/COO Patrick McKinney Publisher Dustin Hector Associate Publisher Lissa Baker Office Manager Dawn Busse Creative Director Brandon Peterson Advertising Account Executives Kathy Davidson Mary Gatliff Lori Seibert Irene Smith Joyce Kenney Ed Junker Circulation Coordinator Shawna Nelson Subscription Sales Kendra Sassman Jack Maggio Falon Geis

We are now at the time of year again to review and reflect on our work over the past 12 months. Do we make more changes or stay with what we have? This is where we would like to hear from our readers and advertising partners, give us feedback and we will do our best to accommodate your wants and needs. We believe we have a great product for the industry to use, but we will never stop trying to better the product. With your help and feedback we know

Livestock Media Group 4685 Merle Hay Rd • Suite 200 Des Moines, IA 50322 877-424-4594 www.americandairymen.com

there will always be a better version of this publication. Most importantly it is our time to thank every one of you and show our

FEMA

appreciation for another wonderful year. Without our readers and advertising partners we would not be the publication we are today. With all of your support over the years, 2018 will mark our 44th year in the dairy industry. American Dairymen wish you a Merry Christmas and Happy New year! God Bless you all in the remainder of 2017, and throughout 2018. Best Regards, Lissa Baker Associate Publisher

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©Twin Rivers Media, LLC, 2017. All rights reserved. This publication may not be reproduced in whole or in part, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopy, recorded or otherwise without the prior written permission of Twin Rivers Media, LLC, 2017. The information and advertising set forth herein has been obtained from sources believed to be reliable. Twin Rivers Media, LLC, 2017 (“Publisher”) however, does not warrant complete accuracy of such information and assumes no responsibility for any consequences arising from the use thereof or reliance thereon. Publisher reserves the right to reject or cancel any advertisement or space reservation at any time without notice and for any reason. Publisher shall not be liable for any costs or damages if for any reason it fails to publish an advertisement. Advertisers are solely responsible for the content of their respective advertisements appearing in this publication and Publisher is not responsible or liable in any manner for inaccuracies, false statements or any material in such advertisement infringing upon the intellectual property rights of others. Advertisements appearing in this publication are not necessarily the views or opinions expressed by Publisher.

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Industry News

Protect What Matters With Improved Patz Magnet Article provided by Patz Corporation Patz Corporation, designer and manufacturer of agricultural, industrial, and environmental material handling products, is pleased to announce an improved, quick-opening system for our newly Patented Tub Mounted Magnets. The new magnet system is available on ALL Patz Stationary, Trailer, and Truck Mount Vertical Mixers. With the quick-opening system, the operator can easily unlatch the magnet by pushing up on the locking mechanism and pulling the lever forward. This instantaneously unlocks the magnet for opening, making cleaning and ser v icing effortless. It is imperative the face of the magnet stays clean to remove tramp metal from the Total Mixed Ration (TMR). Beneficial to both operator and livestock, the magnet is able to pull metal objects that may be hidden in TMR ingredients. Metallic materials remain secured to the magnet without being mixed back in to the ration. Tramp metal often causes Hardware disease (Bovine Traumatic Reticulopericarditis). As one of our satisfied customers stated, “If it saves one cow, it’s paid for itself.” This quick-open magnet is available as an option on all Patz Vertical Mixers and can be upgraded to an existing magnet by contacting your local Patz Dealer. Note: The

Patented tub mounted magnet is exclusive to Patz Vertical Mixers. Right now, Patz Corporation has a “Protect What Matters” Magnet Promotion. This limited time offer gives reduced pricing when a vertical mixer is ordered with a magnet. The bigger the mixer, the bigger the savings! Contact your local Patz Dealer today to learn more. Take advantage of this opportunity to Protect What Matters (your herd). A dairy farmer in Iowa stated, “We love the new tub magnet. We find metal on it every day we check it.” Patz Corporation thrives in an ever-changing market by listening

to the needs of our diverse customer base, from beef and dairy operations to commercial enterprises. • Patz Corporation announces an improved, quick-opening system for newly Patented Tub Mounted Magnets • Quick-opening system unlatches by pushing up on the lock and pulling the lever forward for instantaneous access • Ser v icing and cleaning are much easier with this new system • Patented Tub Mounted Magnet removes tramp metal from Total Mixed Ration (TMR) ingredients • Quick-opening magnet is available on ALL Patz Vertical Mixer sizes • Upgrade system available to convert old, knob style magnet opening to quick-opening style • “Protect What Matters” Magnet promotion available for a limited time. The bigger the mixer, the bigger the savings!

For more infor mat ion, v isit www.patzcorp.com.

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Industry News

Dairy Farmer Leader Receives Prestigious Lyng Award North Dakota’s Jerry Messer Recognized for Contributions to Dairy Promotion Article provided by Dairy Management IncTM. The National Dairy Promotion and Research Board (NDB) honored Jerry Messer as the 2017 recipient of the Richard E. Lyng Award for his contributions and distinguished service to dairy promotion. Messer, a dairy farmer from Richardton, N.D., was recognized at the Joint NDB/National Milk Producers Federation/ United Dairy Industry Association (UDIA) Annual Meeting in Anaheim, Calif. The award is named for former U.S. Department of Agriculture Secretary Richard E. Lyng, who played a critical role in implementing policies that led to the establishment of the NDB more than 30 years ago.

The Lyng Award honors leaders who have made a significant contribution to dairy promotion that benefits the entire industry.

“When you consider the qualities of leadership, including honesty, dedication, passion, foresight, strategic thinking and humility, Jerry demonstrates them all,” said Amber Horn-Leiterman, Wisconsin dairy farmer and chair of NDB. Messer serves as chair of Midwest Dairy Association’s North Dakota Division Board and the North Dakota Dairy Promotion Commission, roles he’s held for 25 years. Since the early 2000s, Messer also served on Midwest Dairy’s corporate board, holding the position of chairman from 2008-17. Nationally, he’s been a member of the United Dairy Industry Association (UDIA) and Dairy Management Inc. (DMI) boards and held national leadership positions as DMI Treasurer and UDIA 2nd Vice Chairman. Since 2012, Messer has been Chairman of the National Dairy Council. In this role, he’s served as a public face for youth wellness and the dairy checkoff’s Fuel Up to Play 60 program, an in-school initiative that promotes healthy eating and physical activity. Fuel Up to Play 60 was created in partnership with the National Football League and in collaboration with USDA. “According to Jerry, any idea that is good for today’s youth will also be good for dairy,” Horn-Leiterman said. As part of the Richard E. Lyng Award, the NDB will contribute a $2,500 scholarship in Messer’s name to North Dakota State University’s Animal Sciences Department. For more information about the dairy checkoff, visit www.dairy.org. The 37-member National Dairy Board, formed in May 1984 under the authority of the Dairy Production Stabilization Act of 1983, carries out coordinated promotion and research programs to help build demand and expand domestic and international markets for dairy products and ingredients. NDB funds, in part, Dairy Management Inc.™, which manages the national dairy checkoff program.

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Winter Preparation

Calf Care for

Winter Weather By Karen Anderson

As cold weather approaches, dairy farmers begin to think about the additional work that winter weather brings and the vital importance of preparation. Don’t let calf care take a back seat during the up and coming cold weather. Calves are the future of the dairy farm, and it is essential for future success to provide adequate and consistent care for each and every calf. Included in this article are several feeding and housing strategies to consider when raising pre-wean calves during this winter season. I used some additional insight about calf care and well-being from Drs. Noah Litherland (Dairy Youngstock Technical Specialist with Vita Plus) and Maurice Eastridge (Professor and Extension Dairy Specialist, The Ohio State University) when writing this article. Look at each calf on an individual basis - what signs do you see

that something is not quite right with that calf? Depending on age, calves experience cold stress at different temperatures. The critical temperature for newborn calves is 48°F versus 32°F for older calves. When cold stress takes effect on calves, there is an increase in the

All feedings and water available should be served at a calf’s normal body temperature of 101.5°F. calf’s energy requirement for maintenance. Cold stress causes calves to divert energy away from growth and immune function to fight the effects of being cold. Additional energy must be added to the ration as well as housing strategies must be used to help combat the effects of cold stress and as a result maintain a calf’s desired growth rate of

1.5 pounds per day. Feeding strategies for winter months include: • Consistency, consistency, consistency: Calves expect consistency when it comes to feeding. Calves should be fed the same volume, the same amount of solids, the same time of day and at the same temperature at every feeding. • Fat content: Due to the fact that calves are born with very little fat on their bodies, calves should receive a ration containing at least 20% fat. • Feeding times: In order to increase the feed intake of calves, the number of times fed or the amount fed may need to be adjusted. For example, increase the number of feedings per day from two to three while keeping the amount fed per calf the same. Or continue feeding the calves twice per day; however, increase the amount fed * Continued on page 14

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Winter Preparation

from 2 to 3 quarts per feeding. • Starter: Always have high quality, free choice starter available for calves to utilize for additional energy and to aid in rumen development. • Consider colostrum cubes: By freezing colostrum from a rota/ corona-vaccinated cow into an ice cube tray (using non-stick cooking spray), additional immunoglobins can be provided to the calf to help prevent bacteria from penetrating the gut. Just add two cubes per calf per feeding into their bottle or pail of milk. • Water: All feedings and water available should be served at a calf’s normal body temperature of 101.5°F. The reason for this is that if feedings and water are not served at body temperature, the calf must utilize additional energy to warm the feedings and water to 101.5°F. • Electrolytes: Have electrolytes on hand to help prevent the calf from getting dehydrated when ill. Additional housing strategies for proper calf care and well-being during winter months include: • Birth: All year round, following the appropriate calving protocols is 14

December 2017

essential for the health of both the cow and calf. More specifically to winter, calves should be kept clean, dry and warm in the first two hours after birth and then moved to a calf hutch or cold housing. Calf jackets are also helpful to keep calves warm during winter. Calf jackets should be laundered regularly especially between calves. • Bedding: Calves should be provided a clean and dry place to live, which is deep and allows calves to nestle down into bedding to reduce body heat loss. A suggestion is to take some time to observe the living conditions of your calves for yourself. If you can’t kneel in a calf’s pen for 15 seconds without having damp knees, additional cleaning or bedding is necessary. • Ventilation: Provide appropriate, draft-free ventilation. Taking steps to maintain health, growth, and well-being of calves is essential for the future of our dairy operations. Utilize these feeding and housing strategies for fighting the effects of cold stress when raising pre-wean calves during this winter season. www.americandairymen.com


Press Release

New Livestock

Waterers By PolyDome

PolyDome is now manufacturing a complete line of livestock waterers. Included in the new line are water tubs from 56 gallons to 1000 gallons; and heated water bowls large enough for herds from 40 to 200 beef cattle. Made from high-impact, UV stabilized polyethylene, these tanks will stand up to rough treatment from large animals and extreme temperatures. The Standard Water Tubs have reinforced outer lips, 2-inch drains, and are light enough to be moved to wherever your animals are. They are available in 4 sizes f rom 85 to 1000 gallons, and

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range in height from 19-inches to 28-inches. The Pro Series Water Tubs have a built-in f loat, that is protected from livestock, and a 3/4” diameter hose fitting for water hookup to maintain water levels. They have reinforced outer lips, and 2-inch drains. They are available in 4 sizes from 56 to 700 gallons, and range in height from 19-inches to 33-inches. New Heated Water Bowls are the perfect solution for farmers and ranchers in cold climates. The 2-piece design allows for easy installation and maintenance of

the plumbing. A round top f loat heater, secured by wing nuts, is designed to make it easier for your livestock to drink. Thermo cycling draws water to the heat source. Heated water bowls are available in 4 sizes for herd sizes ranging from 40 to 200 beff cattle, or 20 to 100 dairy cows. Pre-installed 3/4” plumbing connectors and 3/4” Rojo® valves are included. To learn more visit www.polydome.com

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Breeding and Genetics

Trends in Dairy Cattle Breeding and Genetics By Dennis Johnson

The number of tools to develop a productive and profitable dairy herd that is genetically superior continues to grow. All of the old methods, such as crossbreeding or selection, are still available and new information is coming from biotechnology. The latest aid comes from the new science of genomics. Genomics is the mapping and sequencing of genetic material in the DNA of a particular organism. As genomics becomes more sophisticated, it may actually identify genes and their role. But even now, it may be utilized to increase the effectiveness of sire evaluation. DNA provides the set of instructions (genes) that a cow needs in order to grow, produce milk, breed back, etc. Some parts of the DNA dictate the structure of proteins. Other sections of DNA tell genes

when to turn on or turn off and are the media for transmitting genetic information from one generation to the next. Some sections of DNA appear to have little or no useful function. Genomic selection is the new tool. Over the past several years,

Over time, selection of bulls on Lifetime Net Merit should lead to cattle that continue to improve in production but are also healthier over a lifetime. DNA has been saved from about 15,000 bulls used in AI. The DNA has been analyzed to identify the 50,000+ sites of single nucleotide polymorphism (SNP - say “snip�) markers located on the 30 chromosomes of the bovine genome. Each

marker site may have two of four base variants. There are about 3 billion SNPs in the genome of the cow, but the current technology identifies enough sites to give an animal a unique pattern of SNPs. Furthermore, the pattern of base pairs can be compared with the pattern of outstanding ancestors to predict the breeding merit of the animal. Up until now, the breeding merit of young bulls has been estimated from the average genetic merit of its parents derived by using DHIA records in progeny testing. But now the accuracy of breeding merit can be improved by incorporating information from the SNP scan with the accumulated transmitting ability of parents to create a genomic index. Thus, a young bull with a genomic index, but no tested * Continued on page 18

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Breeding and Genetics

daughters, can be evaluated with about the same accuracy as a bull with about 30 tested daughters and no genomic information. This shortens the length of time to iden-

The large X-shaped structure is a chromosome; a nucleotide pair is a SNP. Source: “Horizon”, Jan. ‘09, Genex Cooperative, Inc.

tify superior bulls, which should increase the rate of genetic progress. Optimistic geneticists may go so far as to predict that progeny testing will eventually be replaced by genomic scans. Genomic selection may be especially helpful in identification of bulls that are strong in low heritability traits such as fertility and longevity. Because the data base on ancestors must be large, the method is currently most useful for the Holstein breed. For now, it is prudent to consider

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genomic selection, the process of combining information from a large set of genetic markers that cover the entire genome with traditional genetic evaluations to select the best animals, as a helpful refinement of progeny testing systems. Genetic super ior it y may be expressed as net merit over a lifetime, as opposed to superiority of production in a single lactation. Short-term evaluations may have contributed to observed decreases in daughter fertility and herd life. If sires are selected on Lifetime Net Merit, several important traits beyond production contr ibute to a bull’s index value. In recent years, the weights of fitness traits have increased relative to production. The health and management traits include length of productive life, somatic cell score, daughter pregnancy rate, calving ease, stillbirths, udder composite score, feet and legs composite, and body size. Somatic cells and body size have negative weights. Over time, selection of bulls on Lifetime Net Merit

should lead to cattle that continue to improve in production but are also healthier over a lifetime. It is important to develop a strong data base on fitness traits of ancestors to effectively utilize genomic selection for fitness traits. Crossbreed ing may be ut ilized to improve herd genetics. University of Minnesota research has demonstrated that three-breed rotational crossbreeding leads to dramatic improvement of fertility while maintaining high production. A crossbreeding program will be most effective if started by analyzing the traits you want to improve, then selecting bulls and breeds with a proven record of performance for those traits. Make a strong effort to utilize AI because proven bulls are available, fertility of semen is documented, and disease is less likely to be introduced. Strengths and weakness of breeds are documented so it is possible to set up a good three-breed rotation based on your own goals.

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Partnering with Producers for Success

Embracing Oregano Oil

in Feed Supplements By Maura Keller

When you think of oregano, what comes to mind? For most, oregano is thought to be a popular all-natural spice used in a variety of dishes for human consumption. But thanks to the innovations by leading Dutch investment banker, Paul Mensink, oregano oil has proven to be active component of natural animal feed supplements—leading many dairy farmers and ranchers to turn to RopaPharm International, Mensink’s leading animal feed supplement company—to meet their animals’ dietary needs and improve the health of livestock. It was over 22 years ago that Mensink founded RopaPharm, an innovative Dutch company that develops, produces, and sells animal feed supplements based on fully natural oregano essential oils. In the mid-1990s, two German veterinarians sought to test Mensink’s natural oregano in the field of pigeon racing. The results? Exceptionally healthy pigeons. This further led Mensink to establish a 400-acre

oregano farm in Turkey where he began providing oregano to the Chinese pigeon market in 1997. Fast forward 20 years, and today, RopaPharm provides animal feed supplements, additives and flavorings using oregano-oil as the active component to livestock producers worldwide who recognize the powerful impact oregano has on animal health. Motivated by the notion that both humans and animals should live a healthier lifestyle, Mensink and the team of nutritionists, technical consultants, and veterinarians

at RopaPharm continue to produce a range of oregano products that are proving extremely beneficial to livestock. So how are oregano oils extracted from plants for use in animal feed supplements? After cultivating the carefully selected plants, the oregano essential oil is obtained via steam distillation. By its own plantation areas and distillation facilities, RopaPharm provides sustainable quality of raw materials and controls the amount of active components in oregano essential oil from which the

Data arranged and compiled by Dan L. McDermott CEO/Managing Member RopaPharm U.S. Llc Confidential

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company’s feed additives are manufactured. Using a unique formula that is high in antioxidants, RopaPharm’s products work to feed the animals defenses against bacteria, fungi and parasites while reducing or even eliminating the use of artificial substances in animal feed supplements. “RopaPharm products are unique in the fact that, based on research, the ideal ratios for the primary active ingredients, which cause symbiotic responses, are being identified and

put into product improvement years ahead of the competition,” says Dan L. McDermott, CEO of RopaPharm U.S. Llc Here’s why: Essential oils, such as oregano oil, are the secondary metabolites of plant materials that are obtained by distillation. These oily liquids consist of several chemical components, and while they are generally in liquid form, they are considered volatile because of the easy evaporation properties. These volatile components provide the plant with vital properties. Specifically, oregano oil, which is obtained from hybridized origanum onites, consists of >62-68%

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carvacrol, 1-3% thymol and <8% p-cymene. It’s the large percentage of carvacrol in oregano oil that is resulting in the plant’s increased role in animal digestive health. In fact, the USDA Agricultural Research Service (ARS) has identified oregano essential oil—because of its large percentage of carvacrol—as having some important properties

spasms, headaches, E. coli, hepatitis, viral pneumonias, meningitis, Lyme disease, allergies, bronchitis, diarrhea, gingivitis, sinusitis, asthma, aphtha, eczema, neuritis, ankle twists, prostates, parasites, cricks, psoriasis, colitis, insects bite, gastritis and mycosis. “There are many herbs that do one or two of these modes of action

including immune modulation, antibacterial, anti-inflammatory, antiparasitic, enzyme stimulation, and antifungal. A Canadian patent was issued to Ropaphar m International in 2012 based on the anti-inflammatory mode of action. Oregano oil also is the most known and used essential oil because of its strong antibacterial properties. Today, carvacrol is used to fight against infections and is present in medicines for treating such conditions as cold, flu, sore throat, ear ache, lung infections, infectious diseases, injuries, analgesics, arthritis, muscle

well, but none have the entire balance of effective modes as does correctly ratioed oregano essential oil,” McDermott says. The company’s signature product line for pigs, poultry and ruminants is called Ropadiar, which is an oregano-based natural feed additive used to improve general health, milk yield and reduce the somatic cell (SCC) score for dairy cows. Within the dairy industry, Ropadair oregano products are currently being used in the manufacturing of calf milk replacers and specialty nutrition products. It is also added to milk on the farm, used in all

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Partnering with Producers for Success

phases of rations and mixed with free choice minerals. As McDermott explains, due to the active components of oregano oil, using Ropadair as a feed additive effects dairy cows intake due to the flavor, as well as improves the antibacterial, anti-parasitic, anti-oxidative, fungicidal, enzyme and immune modulation. Ropadair also eliminates pathogens in an animal’s digestive system and can provide protection during incidents of diarrhea

by increasing the nutrient absorption by protecting intestinal villis. Ropadair provides measurable yield increase, and improves herd health by increasing immunity. A c c o r d i n g t o Mc D e r m o t t , the results of a survey of several Wisconsin dair y far ms using Ropadair have found a reduction in staph infections, lower somatic cell counts, reduced mastitis flare up, better breed backs, reduced parasites,

and stabilized production during warmer months. Using Ropadair as a feed additive not only has proven to increase milk yield, reduce the SCC score, and grow nursery calves significantly faster, but the product also improves the general health and provides extra protection during stressful times that animals may experience. In addition, the fungicidal and anti-oxidative properties that are consider active compounds of oregano oil help to improve feed

stability, quality and protect the feed material during storage. The use of oregano in dairy feeding has attracted the attention of researchers. For instance, a study designed for 170 milking cows in South Korea was performed to illustrate the effects of Ropadair on the dairy animals’ SCC score. Ropadair was given daily with an amount of 1 gr to 1kg of compound feed. The dairy cows were divided by their SCC

Data arranged and compiled by Dan L. McDermott CEO/Managing Member RopaPharm U.S. Llc Confidential

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score into three groups. One group consisted of cows with an SCC score lower than 200; the second group had scores ranging between 200 and 400; and the third group had SCC scores higher than 400. After 14 weeks of being fed Ropadair, the SCC scores for animals with original scores higher than 400, were drastically reduced. In an additional study designed for the Feed Innovation Service in the Netherlands, researchers wanted to see the in vitro effects of Ropadair on rumen volatile fatty acids and the reduction of methane. Three groups

of animals were involved in the study: a control group; a group that was given a high dosage of Ropadair; and a group that received a low dosage of Ropadair. Both groups of animals receiving Ropadair in low and high dosages experienced a decrease in total volatile fatty acids, acetic acids, propionic acids, and methane. Resulting in significantly high milk production. McDermott comments “it makes sense that the methane reduction observed is directly related to increased energy for lactation being used, resulting in the significant increase of lbs. of milk per day” “The future of solidly researched natural products is growing rapidly as science learns more about why these traditional herbs improve health and production,” McDermott says. “If you look at the economics of using RopaPharm oregano in your herds it really becomes the question of, ‘Who can afford not to improve productivity with this product?’” www.americandairymen.com


Robotic Milking Systems

Dairy Robotic Milking Systems

What are the Economics? This article is part of our series of original articles on emerging featured topics. Over 35,000 robotic milking systems (RMS) units are operational on dairy farms around the world. The main reasons dairy producers install milking robots are to improve their lifestyle and to expand without hiring additional labor.

What drives robot profitability?

Milk production per cow, milk produced per robot per day, labor savings, and length of useful life are the main factors af fecting RMS profitability. The primary disadvantage is the capital investment of $150,000 to $200,000 per robot that will milk 50 to70 cows each. Most historical data shows milking robots are less profitable than conventional milking systems. Advances in robotic technology, improved management skills, and higher labor costs may change these results.

Labor efficiency

USDA (2016) reports that wages paid to livestock workers increased 3% in 2014 and 4% in 2015. Reported RMS labor savings vary. Researchers have reported from no savings up to 29% savings with RMS. Barn design and management may explain much of this variation. Farm Management Records (Finbin, 2016) showed that Upper Midwest RMS farms averaged 2.2 million lb of milk per full time worker compared to 1.5 million lb for similar sized herds milking in parlors (Table 1). Our survey of 53 Minnesota and Wisconsin robot farms showed that even when total labor is similar, time saved from milking is used for activities, such as improving animal health, analyzing records, improving reproduction, and more timely forage harvest. Another factor affecting the decision to install robots is the future availability of labor for milking cows. A 2014 survey indicated that 51% of all farm labor was immigrant labor (Adcock et al., 2015). The future

availability of immigrant workers may be reduced if less foreign workers choose to work on farms or if tighter immigration laws are passed in the US.

Milk production change when transitioning to robots

The primary driver for the change in milk production with RMS is a change in milking frequency. de Koning (2010) found that robotic herds had production increases of 5 to 10% compared to milking 2X, but production decreased 5 to 10% compared to milking 3X. In our survey, the average RMS milking frequency was 2.8 with a range of 2.4 to 3.2. To optimize efficiency, the goal is to have high milking frequency in early lactation and lower milking frequency in later lactation. The primary factors that affect individual cow and herd average milking frequency include: 1. Number of cows per robot 2. Milking permission settings 3. Palatability and quality of partial mixed ration and robot box * Continued on page 26

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Robotic Milking Systems

feed 4. Robot free time (time robot is idle) 5. Cow fetching policy 6. Barn design and walking distance (a major factor for grazing herds)

Robotic milking systems compared to conventional parlor systems

Bijl et al. (2007) compared the economic performance of Dutch farms using RMS to closely matched conventional farms milking 2X. Because of higher costs for the RMS, conventional farms were more profitable. However, the labor requirement was 29% lower on the RMS farms resulting in more milk production and income per worker. They concluded that investing in RMS allows farms to milk more cows and produce more milk with less labor. Farm management records collected by the University of Minnesota show a similar pattern (Table 1). Herds utilizing RMS had higher milk production and gross margin, but costs were higher, resulting in slightly lower net farm income. We developed a web application

to compare the profitability of robots and parlors: https://kotamine.shinyapps.io/RobotParlor/. This tool was used to compare the economics of RMS and parlor systems on farms with 120, 240 and 1,500 lactating cows over a 20-year pay-back time. Milking labor costs were set at $16/ hr with a milk price of $17/cwt. We assumed milk production would increase 5 lb/day per cow with RMS compared to milking 2X and decrease 2 lb/day compared to 3X milking. The per cow barn investment is higher for the RMS, reflecting the additional cost to install labor savings features typical in RMS barns. We inflated labor costs at 1, 2, or 3% annually. Net annual impact refers to the net present value of projected differences in RMS cash flows converted to an annuity. The 120 and 240 cow RMS systems had higher net annual impact compared to a double 8-parlor system (Figure 1). Labor cost inflation and milk production per cow had a large impact on profit. For each pound change in daily production per cow, the net annual impact changed by $931. The 1,500-cow parlor system was

Table 1. Robot and parlor farm profitability, 2011-2015, Upper Midwest1 Item Milk/cow/yr Gross margin/cow/yr Feed cost/cow/yr Direct cost/cow/yr2 Overhead cost/cow/yr3 Net farm income/cow/yr Milk sold/Full time worker/yr Depreciation + interest/cow/yr

Robot 23,532 lb $4,564 $2,251 $3,261 $899 $185 2,206,107 lb $547

Parlor 21,528 lb $4,254 $2,206 $3,190 $581 $230 1,542,874 lb $249

Finbin, University of Minnesota www.finbin.umn.edu Feed, vet, supplies, bedding, fuel repairs, marketing and hired labor 3 Building and machinery depreciation, building leases, insurance, utilities, interest 1 2

Difference +2,004 lb +$310 +$45 +$71 +$318 -$45 +663,233 +$298

more profitable than RMS. A 1% annual wage inflation resulted in a $162,672 (3X milking) and $51,177 (2X milking) more profit for the parlor. The difference was $130,570 (3X milking) and $32,395 (2X milking) at 3% wage inflation. Using similar milk production and 3% wage inf lation the parlor had $80,672 higher annual impact. The primary reason for the differences in profit is the more intensive use of the milking system. The RMS assumed full utilization at 60 cows per robot across all herd sizes. The parlor was only being used four hours per day with the 120-cow system. In the 240-cow simulations, the parlor was being used 8 and 12 hr/day in the 2X and 3X respectively. For the 1,500-cow herd, both the robot and parlor were at near maximum utilization. Milk product ion and labor assumptions between the systems greatly affect the profitability projections. More research is needed to understand the economics of how these systems perform with different herd sizes and management practices. Breakeven labor rate. Since the 1,500-cow RMS was less profitable than the parlor system at $16/hr labor, we determined the breakeven labor rate at which the two systems would have similar annual incomes. At the wage inflation rate of 1% and a 2 lb lower milk production with the RMS, the breakeven labor rate is $32.30/hr. If similar milk production levels are assumed with a 3% annual wage inflation, the breakeven wage rate drops to $22.91/hr. Breakeven milk production. We also examined how increased milk production per cow in RMS would affect the profit comparison (Figure * Continued on page 28

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Robotic Milking Systems change affects the profitability of RMS. We developed two scenarios using a 180-cow dairy: RMS replacing a parlor and retrofitted in an existing freestall barn and a RMS in combination with a new high technology freestall barn.

Robot retrofit

2). If the robot system achieves 3 lb /cow per day higher milk production than the parlor with 3% annual wage inflation, the annual income is only $3256 higher for the parlor. At 5 lb/day more milk, the RMS is more profitable at all wage inflation rates. Current research indicates that RMS do not achieve milk production as high as 3X milking, but as RMS management and facility design improves, this may change. Another potential advantage is that cows in RMS can be managed and milked in stable groups within the pens. Cows have access to resources (feed, water, beds, and milking) at all times. More precise feeding management can potentially increase

inflation and a 20-year time horizon, net annual income increases approximately $4,100 for every 500 lb increase in daily milk per robot. Currently some US farms are consistently harvesting in excess of 6,000 lb of milk per robot daily. This is achieved by a combination of high daily milk per cow and a high number of cows per robot (often over 60). The most important factors to achieve this are: 1. Milking permission settings and strategies that get the correct cows milked at the correct times 2. Reduced box time per cow 3. RMS in top working condition

For the retrofit scenario, we assumed that there was no remaining debt with the previous parlor. The increases in costs with the robots were, payments for the 3 robots ($63,000) for 10 years, higher insurance ($2,700) and higher maintenance ($9,000/robot per year). We examined profitability using milking like labor of 45, 60 and 75 minutes per robot. We also varied daily milk per cow using a 2 lb decrease, no change and 2 lb increase compared to the previous system. Our survey of producers indicated that well designed (automatic manure removal and split entry pens), well managed free flow barns average about 45 minutes of daily milking like labor per robot. In this scenario, if producers can get 2 lb/day more milk and robots last longer than 10 years, the RMS system is more profitable than the parlor system. If there is no change in milk production, robots must last 13 (with 45 minutes of daily labor per robot) to 17 (with 75 minutes of daily labor per robot) years to breakeven. If milk production decreases 2 lb in the RMS system, it is never as profitable as the previous parlor system.

Robot with a New Barn

Figure 2. Net annual impact of a 1,500-cow dairy with 25 robots compared to a double-24 parlor milking 3X at different increases in daily milk production and wage inflation rates milk per cow.

Milk per robot

Maximizing daily milk per robot is important to maximize profit. In a four robot system using 2% annual wage

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December 2017

Effect of RMS on Dairy Enterprise Profitability

To achieve the maximum benefit of robots, it is preferable to design them into a new, high technology, low labor requirement facility. This includes various upgrades, such as wider more frequent crossovers, automated manure removal, and automated feed pushers. The projected new facility resulted in annual payments of about $101,000 over 20 years for the 180-cow farm. A 10 lb/ day increase in milk production along with the anticipated labor savings is required before robots are consistently more profitable than the previous parlor system.

We examined how the economic life, labor efficiency, and milk production www.americandairymen.com


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