2020 Journal of the ASFMRA Article
Analysis of Alternative Levels of Facility Investment for Automatic Milking Systems
An article published in the 2020 Journal of the ASFMRA contains a financial analysis of alternative levels of facility investment associated with installing automatic milking systems (AMS).
In addition to installing two automatic milking units at a cost of $380,000, the paper looks at three facility construction alternatives: a minimal retrofit to existing facilities costing $70,000; construction of a new open sided barn costing $470,000; and the construction of a fully enclosed barn costing $920,000. Therefore, the total investment ranges from $450,000 to $1,300,000.
Appraisers and farm managers need to understand that two dairies installing similar automatic milking systems may have very different total investment costs. These different levels of investment are likely to impact milk production and feed costs and efficiency. The level of capital construction costs also directly impact expected financial returns and cash flows for several years. Therefore, valuing or appraising dairies that have installed automatic milking systems requires a careful valuation of the total investment and not just the investment in the specific automatic milking system.
The full article, entitled “Analysis of Alternative Levels of Facility Investment for Automatic Milking Systems," may be found in the 2020 Journal of the ASFMRA. The Journal includes an additional 18 articles on topics as wide ranging as:
- Storage of corn and soybeans
- Potential for genomics and impact on ranch profitability
- Farmland investment
- Impact of weather fluctuations and quality effects on land price trends
- Pricing on seed corn and nitrogen fertilizer
- Much more
If you are interested in having an article published, please review the Manuscript Guidelines. Manuscripts may be submitted to the ASFMRA at publications@asfmra.org.
PICTURED: CDF of Net Financial Impact for Three AMS Scenarios