Profitability analysis of compost barn and free stall milk-production systems: a comparison

Abstract

The objective of this study was to comparatively analyse the profitability of compost barn and free stall milk-production systems as a means of helping producers and technicians choose the type of facility most suitable for each farm. Data collected from four farms from January to December 2016 were analysed; the data were distributed equally among compost barn and free stall systems. The cost of milk production was estimated according to the operating cost methodology and considering the milk production cost centre, which involved both lactating and dry cows. Additionally, gross and net margins were estimated as indicators of profitability. The results showed that the average gross and net margins were not influenced by the type of facility; they were positive in both of the production systems analysed. Among the components of the net operating cost, the proportion of the "medications" item was lower in the compost barn properties, while the cost of bedding for the cows was lower in the free stall farms. Depreciation and total operating cost were similar in the two systems. Milk sales made up a higher percentage of the revenue in the free stall farms, despite the high standard deviation, while the expectations of revenues from wastes were similar in the two production systems. Given that there were no significant economic differences between the types of facility, it is concluded that ease in management, productivity, reproductive performance, animal health (hoof injuries and mastitis), environmental issues, and availability of water and bedding material should be the motivators for choosing one system over the other.