Dairy barn farming systems

Background

  1. These notes relate to free-stall barns that have individual cow beds with soft bedding and which meet generally accepted animal welfare requirements for prolonged animal enclosure.
  2. The free-stall barn concept was developed more than 50 years ago. The key element is that cows freely choose their raised cow bed, where they lie down. When they stand, the urine and dung drop behind the bed into a laneway. Free-stall barns are the predominant form of cow housing in USA, and increasingly in Europe.
  3. The cow beds can contain sand, wood chips, or alternatively have padded mat surfaces. In New Zealand, most free-stall barns have padded mats.
  4. Correct design of the barn is crucial. Key elements include correct sizing of cow beds, feeding systems and adequate ventilation. Kiwi farmers sometimes go wrong with their DIY designs which ignore 50 years of overseas expertise relating to cow behaviour, cow movement, and air movement. It is important to get it right the first time, as solving the problems of a poorly designed barn is very difficult without a bulldozer.

Drivers

  1. The key drivers for barns in New Zealand are environmental issues (pugging, nitrogen leaching, animal welfare, reduced greenhouse gas emissions per production unit, less feed wastage), a desire for improved animal performance, and a need for non-seasonal production within consumer-focused dairy value chains. These issues ‘come together’ in the form of very diverse farming systems.
  2. The most intensive systems can include robot milking systems with approximately three milkings per day, 24-hour confinement, high animal production (about 1.2 kg of milksolids per kg cow liveweight – e.g. 620kg MS from a 500 kg cow, or 850kg MS from a 700 kg cow), and a short dry period of about 45-50 days.
  3. The least intensive systems are those where the barn is used predominantly for wintering of cows and also shelter from summer heat. With these systems, the cows are typically inside for 90-150 days. The benefits relate to longer lactations (cows milked through to within 60 days of calving), reduced winter feed requirements (depending on cow size, about 10kg of feed allocated per day cf 14kg under paddock systems), reduced pugging and reduced leaching. Farmers with these systems typically see marked improvement in animal performance, often up to 100 kg MS.
  4. There is diversity of hybrid systems. On some farms, there is non-seasonal calving with cows spending the first half of lactation in the barn, but typically with paddock access for several hours per day. This can work very well and be very cost efficient. On other farms, cows rotate through the shed – 12 hours in and 12 hours out, somewhat like ‘submarine bunking’.

Costs

  1. A top quality barn including all feeding and effluent systems with associated machinery may cost up to $5000 per cow. Some of the DIY systems are much cheaper. In general, you get what you pay for.
  2. In a top quality barn, it is often more helpful to think in terms of dollars of capital per kg MS, with the more efficient fully-confined systems being about $5 or less per kg MS. Hybrid systems, where not all cows are in the barn at the same time, can be well below this.
  3. Overall farm system capital per kg MS is often less on barn farms than pastoral farms.
  4. The economic constraint to intensive barn farming is unlikely to be capital cost, although it may be a financing constraint for high-debt businesses. But to get through difficult times such as in the last two years, it is essential to have cost- efficient feed systems. A resilient system is one which has overall feed costs (fully costed) of about 25c per kg DM and with feed conversion of better than 1kg MS per 10 kg DM. This is possible. However, more work on feeding systems for NZ conditions is needed. 

Economics

  1. As with pastoral dairy farms, there can be huge diversity. One barn farm that I am associated with, which runs a hybrid system, will this year have farm working expenses including all salaries and wages of management, of between $3.70 and $4 per kg MS. This farm winter milks, with two thirds of the farm in pasture and one third in crops. Production is over 2000 kg MS per hectare. This is a farm that produces 1.2 kg MS per kg of cow liveweight. Good livestock sales plus modest winter milk premiums means the farm is EBIT positive at well under $3 per kg MS as a base milk price.
  2. For intensive robot systems, we still have some fine tuning to do. However, I have one client who on my current estimates requires a base milk price of $3.52 k per kg MS to run EBIT cash positive this year. We think further efficiencies are possible. A key issue is premiums for off-season milk production. Without these, it is hard to make the system stack-up economically with volatile commodity prices.
  3. ‘Back of the envelope’ calculations tend to get things seriously wrong. It needs a ‘whole of system’ approach that is situation specific and works through all the issues such as feed conversion efficiencies (which are very high), component premiums (which can be significant), winter premiums (where appropriate), fertiliser requirements (including value of effluent), reduced dry period (associated with longer lactations and good cow condition), livestock premiums (associated with good cow condition and timing of sales), as well as the obvious feed and labour costs. As with all businesses, ‘cash is king’ when it comes to financial resilience but long term profitability needs to include all costs including depreciation.
  4. It takes a full year and even two years to get intensive systems really humming. This is no different than any dairy conversion; nothing happens overnight. But with barn farming there is lots to learn. Sometimes the cows learn fast than the farmer.
  5. Analyses which calculate NPVs and IRRs from the first one or two years of performance inevitably get it wrong.

The future

  1. A lot depends on leaching rules and a need for off-paddock wintering and whether New Zealand moves increasingly to consumer-focused value-add products which require non-seasonal production. Depending primarily on the above, I am confident there is an increasing role for barn farming systems in New Zealand, and that these systems can be profitable.
  2. The key research needs relate to integrated feed systems (pastures and crops) specific to New Zealand conditions and integration thereof with animal performance.
  3. There is a need for rural professionals who are trained in barn farming systems.

Further information

  1. Media articles written by Keith relating to dairy industry and other agribusiness issues can be found at http://keithwoodford.wordpress.com
  2. Keith consults for Calder Stewart who construct free-stall barns. Their barn farming website is http://www.dairybarnsystems.co.nz/
  3. DairyNZ has barn-farming materials at http://www.dairynz.co.nz/farm/off-paddock- facilities/freestall-barn/
  4. Keith can be contacted at kbwoodford@gmail.com or at keith.woodford@lincoln.ac.nz

Keith Woodford Bio

Keith Woodford is an independent consultant working both in New Zealand and overseas. He holds honorary appointments at Lincoln University as Professor of Agri-Food Systems, and as Senior Research Fellow at the Contemporary China Research Centre at Victoria University. Between 2000 and 2014, Keith was Professor Farm Management and Agribusiness at Lincoln University, and prior to that he was Reader in Rural Management at University of Queensland for ten years. He has worked on rural development projects in many Asian countries, also in South America, the Pacific and Africa. He has published in journals ranging from Meat Science to Agricultural Systems to the European Journal of Clinical Nutrition, as well as in farm management and agribusiness journals.