COUNTING THE COST
Low milk price makes technology a burden for dairy
Three years ago, spending $1.2 million for a new robotic milking system seemed a like a great way for a local dairy farm to reduce long-term labor costs.
But the owners of O.A. Borden & Sons, one of 30 farms that supplies Stewart’s Shops, never could have imagined the deep, sustained decline in the price they’re getting for milk.
From a peak of $26-per-hundredweight in 2014, they’re now paid $15, barely able to make payments on the new technology they hoped would secure the farm’s future.
“Small farms are especially hard hit because they can’t spread costs out the way large dairies can,” co-owner Tom Borden said. “We’ve lost money the past four or five months.”
This is just one example of how global dairy market conditions are causing a great deal of financial hardship at the local level. There are many factors involved, but one of the main contributors is a significant reduction in U.S. dairy exports, which has caused an oversupply
of milk on the domestic market and a corresponding drop in prices.
Tom Borden said Stewart’s pays more for milk than most dairy cooperatives. So while prices have fallen, he’s getting more than many other farms.
“Stewart’s Shops is still paying the highest premium in the market,” said Maria D’Amelia, company spokesperson.
“A big part of that premium is quality. Customers rely on us for offering fresh, high-quality milk.”
Tom Borden owns the farm with his son, Mike; brother, Tim; and their cousin, Jim Borden.
Their farm was the first one in the Capital District to install robotic milking machines.
Now there are at least a half-dozen in the region and more than 100 throughout the state.
The devices have saved the Bordens time, which they can spend handling other farm chores.
Cows, attracted by sweet-tasting grain, walk up to the machines and are milked 3.5 times per day, which has resulted in a roughly 15 percent increase in production.
But the technology also has its limitations.
Because it operates around-the-clock, 365 days per year, someone always has to be at the farm in case something goes wrong. And a malfunction could occur just as easily at 2 a.m. as 2 p.m.
“So everyone can’t just take off and go to a baseball game,” Tom Borden said.
“Murphy’s Law doesn’t work like that,” Mike Borden said.
One of the system’s main advantages is that it provides a wealth of detailed information about each of the milking herd’s 200 animals, from how many times per day they’re milked to their regular movements and activities in the dairy barn.
“These things are a fountain of information,” Tom Borden said. “Some of it’s pretty valuable. You’ve just got to learn to sift through it.”
The Bordens purchased two robotic machines at about $200,000 each.
The $1.2 million total investment included the cost of a new barn, feeding system and related computer hardware.
The new barn also improved herd production by making cows more comfortable, with greater air flow and more water availability.
“The whole system really needs to work together to work well,” Mike Borden said.
The labor savings alone would have made the machines worthwhile if milk prices had remained higher.
But with less income, the technology has become somewhat of a financial albatross that’s weighing the farm down.
“It deserves careful study,” Tom Borden said.