Robot wars: what can farmers expect to pay for service costs?

The popularity of automated milking systems or robots to milk cows continues to increase.

In Ireland, it is estimated that there are about 1,000 robots, with around 100 or so new robots installed annually, along with a few hundred robots working in Northern Ireland.

Aside from considerations on capital costs, one of the other key considerations when installing robots is service costs and logistics. As robots operate for 24 hours per day, the backup service has to be not only reliable but also affordable.

Unlike a conventional milking parlour, robots are much more sophisticated and have bespoke parts, only available from approved service technicians.

With this in mind, the Irish Farmers Journal has put together some information on what farmers can expect to pay for servicing robots.

Some of the information came directly from the manufacturers, while other information was sourced directly from farmers.

The general principle applied to operating robots is that the farmer agrees to a service contract or service agreement.

For a monthly fee, depending on what is in the contract, the farmer is entitled to regular services when due, telephone support and the replacement of some or all parts and the supply of some or all consumables.

These service contracts generally run to thousands of euro per year, so over the lifespan of the robots come to significant amounts of money.

Each contract should be studied carefully to know what’s included and what’s not included.

All prices quoted include VAT at 13.5% or 23% for consumables.

According to Lely Centre Mullingar, most of its clients agree to a standard service contract. This contract has two elements, a fixed annual charge per robot and a variable annual charge per robot based on the milk throughput.

The fixed charge is €2,043 per robot, while the variable charge is €0.0017025 per kilo of milk each robot harvests.

So, if a robot was producing 350,000kg of milk annually, the total service fee would be €2,043 plus €596, which is €2,639 or €220/month.

These prices do not include the cost of Horizon software which is paid directly to Lely HQ.

This is a per-cow, per-month cost, paid while the cow is milking. Presuming they are milking for 10 months of the year, the cost for 70 cows is €430/year.

This brings the annual cost including Horizon to approximately €3,069 or €256/month.

Lely Mulingar says it has a team of 25 full-time service engineers on the roads with fully stocked vans.

It says there are always five engineers on call 24/7 and the company has in excess of €2m worth of spare parts in stock.

Service package: what’s included?

According to DeLaval, it offers farmers an all-inclusive service contract, which can be tailored to meet the farm’s specific needs.

Options include “basic preventative maintenance of milking equipment to comprehensive packages that include liners, tubes, teat sprays, detergents, oils, and filters.

Many farms opt to incorporate extended parts coverage for ultimate peace of mind.

Each plan ensures automatic delivery of service parts and consumables, offering the benefit of fixed monthly costs throughout the plan’s duration,” according to a DeLaval spokesperson.

DeLaval says that the cost of the service plans start at around €331/robot/month, depending on the equipment.

The Irish Farmers Journal has seen a contract between DeLaval and a farmer with one robot.

The contract was for a four-year period and includes 12 scheduled service visits, so three visits per year.

Two options are presented in the contract.

The first option is for service only with around €300 worth of machine oil included but no additional emergency callouts or support and this came to €19,200 for the four years or €4,800 per year or €400/month for the one robot.

The second option on the contract agreement is for the 12 scheduled services, as above, full support including management advice plus all consumables such as liners and tubes, teat spray, cleaning detergents and filter socks.

This plan would also include an extended warranty on parts.

Including the higher rate of VAT for these consumable items, the total cost of this service package comes to almost €55,000 for the four-year duration of the agreement or €13,750 per year or €1,145 per month for one robot.

Callouts are not included.

While undoubtedly a higher cost per month than the other option, farmers availing of this top level plan will effectively have all items associated with the robot covered, except for some parts not covered under the extended warranty.

DeLaval says that its service agreements are generally for a four-year period with service and maintenance costs averaged over the four years.

Basic service package: what’s included?

All-inclusive package

Service agreements for GEA robotic milkers are between the farmer and the dealer but GEA has supplied us with an example service agreement between a farmer and a GEA-owned dealership.

In this service agreement, the cost of the services plus software updates come to €3,156 per year or €263/month.

The Irish Farmers Journal has also seen a service agreement for one robot with a privately owned GEA dealership.

One robot

The cost of this service agreement comes to just over €3,600 per year or €300/month for one robot.

This agreement includes 24/7 telephone support and the commitment by the dealer that any emergency repairs are carried out in a reasonable timeframe and that all emergency parts are provided in a reasonable timeframe.

All consumables such as filters, detergents, teat spray, liners and tubes are all excluded from the service agreement and these are at the farmer’s own expense.

Callout charges are €70 for normal business hours and €120 for an out-of-hours callout. Service technician time is costed in the agreement at €60/hour for business hours and €80/hour for out-of-hours technician repair time.

It’s important to note that these costs are dealer-specific and may differ between GEA dealers.

What’s included in the GEA service agreement?

When compared against the costs of servicing a basic herringbone parlour, the robots cost a lot more to service. But that is not comparing like with like, as the robot is going all day whereas the parlour might be going for four hours per day and is generally a very simple, basic machine.

The difference with robots is that they are going 24 hours a day and they are highly sophisticated with moving parts, automation and computerisation.

There are differences in prices for service agreements across the different makes of robot

Therefore, service and maintenance is more critical. It’s also fair to say that the robot is doing more than the parlour – it’s replacing labour and that comes at a cost.

There are differences in prices for service agreements across the different makes of robot.

These prices are included without comment. I haven’t the knowledge or expertise to say that because one service agreement is costing more or less that it is better or worse than any other.

The key thing is to understand the differences in the agreements, what’s included and what’s not included.

Expensive

I think it’s fair to say that those with the lowest service and repair costs are those that are willing to get to know the machine and willing to try carry out repairs themselves. Relying on a callout every time something goes wrong will prove very expensive.

An awful lot depends on the quality of the back-up service. How soon the technician will be in the yard and how soon the part will be delivered and the robot back going again is critical.

Relationships have soured over this point. For example, farmers being charged for repeat visits to the same problem.

Geography, along with experience and the back-up support to the technician plays a part here.

At the end of the day, the higher operating costs of robots can only be justified if the farmer does something better with the time not spent milking. For some, that will be working off-farm, lower labour costs or more time off.