20140507 Kwatrijn Paper (final)

Ref: C0654
Economic feasibility of an innovative, welfare and environmental friendly dairy farming system
R.P.J. (Rob) van Winden and P.W.G. Groot Koerkamp (Peter), Farm Technology Group Wageningen University, Wageningen, PO Box 317, NL-6700 AA
G.W.J. (Gerard) Giesen, Business Economics Group - Wageningen University, Wageningen,
PO Box 8130, NL-6700 EW
H. Antonissen (Henk), Antonissen Agrarisch Advies, Leende, Halfeindschestraat 2b, NL-5595
AB
A.P. Bos (Bram), Wageningen Livestock Research, Lelystad, PO Box 65, NL-8200 AB
Abstract
The goal for the Dutch dairy production sector is to produce in integrated sustainable
production systems that involve economic, environmental, animal welfare and societal
aspects. The recently developed Kwatrijn dairy husbandry system incorporates integrated
solutions to achieve a higher level of animal welfare, lower emissions of ammonia and improved integration of the barn in the landscape. The measures include the segregation of
urine and feces (keep urine and feces separated shortly after excretion), more space per cow,
improved floor functionality and new barn design. Kwatrijn is developed by entrepreneurs,
Wageningen UR and farmers. This research assessed the economic performance of Kwatrijn
as compared to a conventional dairy husbandry system. An economic simulation model in
Excel was d e v e l o p e d a n d used to assess the economic feasibility of a Kwatrijn dairy
farm with a milk quota of 1,1 Mkg, and compared it with a conventional dairy husbandry
system. Assumptions regarding herd performance, variable costs and fixed costs were based
on Dutch standards and were included in a sensitivity analysis. The results showed that net
farm income from the operation of Kwatrijn was approximately €10.000.- lower than for the
conventional farm. This was partly caused by higher fixed costs due to higher investments
and partly compensated by lower variable costs due to improved animal health and lower
feed costs. Kwatrijn would be economically more attractive at higher farm intensities, at
higher slurry disposal costs and at lower a l l o w e d nitrogen and phosphate application
levels. These effects were caused by the segregation of manure that lowered manure disposal costs. A sensitivity analysis showed that highly influencing assumptions were culling
age, living area per cow in Kwatrijn, farm intensity, phosphate and nitrogen application
norms and i n v e s t m e n t c o s t s o f the roof and floor in Kwatrijn. The four least influential assumptions were mastitis incidence, fertilizer price, lameness and claw problem incidence and ratio of segregated urine against total manure production.
Keywords: economic feasibility, dairy husbandry system, manure segregation
1
1.1
Introduction
Background
The objective of the Dutch government and businesses in the livestock sector is that in 2020
the meat, dairy and egg production chain produces safe, healthy, high quality and socially
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accepted products. Animal welfare should be at a high level and harmful emissions and public health risks should be minimized (Bleker, 2011). The livestock production sector needs
solutions that address several issues simultaneously. Such solutions do not only find their
basis in smart technology. It requires changes in the structure of a system and in the way
people operate within the system. Such changes are called system innovations. In order to
reach that, assumptions, purposes, functions and their ordering should be systematically
reflected upon (Bos et al., 2010). Integrated sustainable animal husbandry systems are systems that produce animal products and many other economic or societal desirable values in
a way that are able to sustain on the long-term, not jeopardizing people and animals, nor the
ability of future generations to meet their needs (UDV-regiegroep, 2012).
1.2
Current and desired situation
Ammonia emissions from animal husbandry systems are one of the main causes for environmental acidification. In 2010, agriculture contributed for 86% (106,500 ton) to the total
ammonia emission in the Netherlands. Dairy husbandry systems contributed for 43% of the
total to these emissions (Emissieregistratie, 2012). Ammonia emissions have been reduced
over the last 20 years, but further reduction is required. Next to ammonia emissions, improving animal welfare is an important challenge. The most important bottleneck of the current
dairy barns is the floor. Currently 80% of the dairy cows in the Netherlands are facing claw
problems at any time during the year (Berkhout and Bruchem, 2009). The floor is mainly too
hard, not dry and too slippery, which causes a poor walkability. Walking floors in dairy barns
cause several claw health and welfare risks (Ouweltjes et al., 2003). Profitability is an import
prerequisite for the viability of a dairy farm and can be measured with the net farm income
(Calker et al., 2005). In the period from 2001 until 2010 the net farm income on Dutch dairy
farms was on average €69,150.- (LEI, 2011). In the desired situation dairy cow husbandries
have a limited ecological impact, provide the animals with a good welfare, are well integrated
in the landscape and last but not least, provide the farmer with a good income now and in the
future.
1.3
Kwatrijn dairy husbandry system
The starting point for Kwatrijn was the Wageningen UR Livestock Research project ‘Cow
Power’ which showed stepping stones towards a sustainable dairy husbandry sector. Within
this project several dairy husbandry designs for system innovation were made. The purpose
of this project was to trigger the minds of all stakeholders to think about the future of dairy
husbandry systems and possible solutions. Kwatrijn is an innovative dairy husbandry system
with four essential integrated solutions that provides animals with more space in a comfortable barn, segregates urine and faeces in the barn and generates electricity by solar panels.
Furthermore, the barn has a revolutionary roof shape that integrates the barn into the landscape.
The basic principle of the urine and faeces removing system in Kwatrijn is that the urine
quickly drains away by the sloped grooves in the floor. The urine drains into a transporting
mechanism that transports the segregated urine into a controlled storage environment. Segregated urine is urine that is excreted by a dairy cow and dropped on a surface contaminated
with faeces, being collected after being in contact with contaminated surface. Faeces will be
removed from the floor by an autonomous vehicle that transports the segregated feces to a
transporting mechanism or directly to the storage. The feces are picked up from the floor by
a scooping mechanism. Segregated feces are the feces that, after being excreted by the
dairy cow, dropped down on a surface contaminated with urine.
The cows in Kwatrijn have 13.5 m2 space per animal available, which includes walking and
lying areas. As proposed in the project Cow Power, providing cows with more space improves their welfare. The BoR (Brief of Requirements) in Cow Power showed that the cows
have a preference up of at least 360 m2 to move around.
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The floors in Kwatrijn are made of concrete and have several characteristics that improve the
welfare of the animals. The top surface of the Kwatrijn floor is completely flat, but the grooves
are equipped with slopes for a quick removal (drainage by gravity) of the urine. The sloped
transverse grooves make sure that the urine flows away into the longitudinal sloped grooves,
which are connected to the transporting mechanism under the floor. The grooves are shaped
as half circles, to prevent faeces to stick to the concrete. The typical profile of the floor quickly removes the urine from the animal environment. Underneath the floor, the system is
equipped with drainpipes or a V-shape floor for a quick removal of the urine. Kwatrijn is very
open and doesn’t have any sidewalls, making the barn transparent so that the inside of the
barn is visible for people that pass by. The roof makes the barn better integrated in the landscape and consists of three gable type roofs with a zigzag shape, which gives the barn a
friendly appearance in de landscape. It consists of three caps, each with a steep and a nonsteep side.
2
Materials and methods
2.1
Simulation model
The simulation model developed in Microsoft Excel consisted of several sheets. The structure of the model is presented in figure 1. The model as used in this research originates from
the work of Vlemminx (2011). Both the Kwatrijn husbandry system as well as a conventional
Dutch dairy husbandry system (referred to as Conventional) were modelled.
Figure 1 Structure of the simulation model; the boxes are numbered and link to sheets in Excel.
A detailed description of the model and the underlying assumptions is given by Vlemminx
(2011). For this research the sheets Herd, Feed Rations, Fertilization, Hygiene and Animal
Health and Housing were adapted.
2.1.1
Assumptions
Herd
Kwatrijn and Conventional were modelled with a size of 140 dairy cows as this is expected to
be a very common herd size in the Netherlands in the near future. The average herd size in
the Netherlands in 2011 was 83 dairy cows per farm (LEI, 2011). The numbers of young
stock and calves are determined by the replacement rate which is based on the culling and
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mortality rate as presented in Vlemminx (2011). Milk production per cow and the milk contents were assumed to be equal for both husbandry systems as presented in Table 1. The
milk production per cow (8,180 kg/year) was based on the average of 2010 as presented in
BINternet, with a fat content of 4.36% and a protein content of 3.51% (LEI, 2011). It was assumed that the farmer owns the milk quota. For Conventional the culling age was set at
2,128 days, based on the average culling age in the Netherlands in 2009 (CRV, 2010). Within Kwatrijn a culling age of 2,554 days was assumed, resulting from better animal welfare
and more living space. The age of the first calving for the heifers was 796 days for both husbandry systems (CRV, 2010). This affected the number of young stock in Kwatrijn as it is
lower compared to Conventional. The calving interval was 417 days (CRV, 2010) and the
average dry period length was 64 days (CRV, 2010). The number of inseminations per gestation was 1.8 (Vermeij et al., 2010).
Table 1 Herd, production, life cycle and reproduction data of the herd for Conventional and Kwatrijn.
Variable
Herd
Milking and calving cows
Young stock >2 yr
Young stock 1-2 yr
Calves <1 yr
Replacement rate
Culling rate
Mortality rate
Production
Milk production
Fat content
Protein content
Life cycle
Culling age cows
Age first calving heifers
Dry period length
Reproduction
Calving interval
Inseminations per gestation
Unit
Conventional
Kwatrijn
[-]
[-]
[-]
[-]
%
%
%
140
7
41
45
27.4
25.4
2.0
140
5
30
32
20.8
18.8
2.0
kg
%
%
8,180
4.36
3.51
8,180
4.36
3.51
2,128
796
64
2,554
796
64
days
days
days
days
[-]
417
1.8
417
1.8
Feed production and quality
The gross yield of the grass and maize land is presented in table 2. Grassland for grazing
and silage was assumed to yield both 12,000 kg dm/ha and maize land was assumed to
yield 15,000 kg dm/ha (Vermeij et al., 2010). Both yields included the harvesting losses in
terms of dry matters. These losses also occured during the storage and feeding process as
presented in table 2.
Table 2 Gross yield, ensiling and storage losses, grazing/feeding losses and net yield for grass grazing, grass silage and maize silage, based on (Remmelink et al., 2011; Vermeij et al., 2010).
Variable
Gross yield
Ensiling and storage losses
Grazing/feeding losses
Net yield
Unit
kg dm/ha
%
%
kg dm/ha
Grass grazing
12,000
17
9,960
Grass silage
12,000
15
5
9,690
Maize silage
15,00
7
5
13,253
Fertilization
The total land area of Kwatrijn was based upon manure regulations regarding the production
of nitrogen from animal manure such that Kwatrijn would not have to dispose manure. In
case Kwatrijn had to dispose manure, Kwatrijn would only dispose segregated faeces, as
segregated faeces have the highest contents of both nitrogen and phosphate. In Conventional slurry had to be disposed. The amount of manure to be disposed was based on the
assumed nitrogen and phosphate contents as presented in Table 3 and the manure regulations. Disposal prices for manure depend on the type of manure, the season and the region
of production. The disposal price for slurry was based on a norm in KWIN, while the prices
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for segregated urine and faeces were assumptions. It was assumed that segregated urine
and faeces were more valuable separately than slurry as they are better applicable for a
specific fertilization demand of a farmer. A contractor applied the different types of fertilizers.
It is assumed that segregated urine is applied in the same way as slurry in Conventional.
Table 3 Nitrogen fertilizer replacement value (NFRV), contents, disposal prices and application costs
of different types of animal manure and artificial fertilizer for Conventional and Kwatrijn (DR-loket,
2012) KWIN (Vermeij et al., 2010).
Conventional and Kwatrijn
Unit
NFRV animal manure
Slurry with grazing
Slurry with without grazing
Segregated urine
Segregated feces with grazing
Segregated feces without grazing
Contents animal manure
Nitrogen in slurry
Nitrogen in segregated urine
Nitrogen in segregated feces
Phosphate in slurry
Phosphate in segregated urine
Phosphate in segregated feces
Disposal prices animal manure
Slurry
Segregated feces
Application costs
Slurry and segregated urine
Segregated feces
Application capacity segregated feces
Artificial fertilizer
45
60
80
45
60
%
%
%
%
%
3
4.40
4.00
6.40
70
0.20
4.10
kg N / m
3
kg N / m
3
kg N / m
3
kg P2O5 / m
3
kg P2O5 / m
3
Kg P2O5 / m
3
15
10
3
5
8
1.5
52
€/m
3
€/m
€/m
€ / ton
ha / hr
€ / ha
The total land area in Kwatrijn was set equal to that in Conventional. As a result the area for
feed production in Conventional is slightly more due to the fact that the area used for buildings in Kwatrijn is larger, as presented in Table 4. The soil type for both husbandry systems
is clay. The grassland has a neutral PAL-value and the arable land has a neutral Pw-value.
Table 4 presents the usage of the land within non-productive land and land used for feed
production for Conventional and Kwatrijn.
Table 4 Land usage within Conventional and Kwatrijn.
Variable
Non-productive land
Buildings
Feed production land
Grass for grazing
Grass silage
Maize silage
Maize sales
Total cultivated area
Total area
Share grassland within total area
Unit
Conventional
Kwatrijn
ha
0.72
0.90
ha
ha
ha
ha
ha
ha
%
37.49
32.29
10.09
0.00
79.30
80.02
88
35.80
30.74
9.38
3.19
79.12
80.02
84
Animal health
The improved animal environment in Kwatrijn was assumed to result in a declined incidence
of lameness, claw problems and mastitis, which lowers costs and income losses from animal
health as presented in Table 5. It was assumed that the lameness and claw problem incidence in Kwatrijn was 10%, while Conventional had a lameness and claw problem incidence
of 20%. This decrease of lameness and claw problem incidence gave a reduction of the
losses of €770 per year. It was assumed that the mastitis incidence in Kwatrijn was 10%,
while 30% was taken for Conventional. This decrease of mastitis incidence gives a reduction
of the losses of €6,097. According to (Enting et al., 1997) 20% of the dairy cows in the NethProceedings International Conference of Agricultural Engineering, Zurich, 06-10.07.2014 – www.eurageng.eu
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erlands has lameness or claw problems. Each case reduces the net farm income from operation by €100 consisting of production losses, early replacements labour and treatment costs.
The income losses from early replacement were not taken in to account, as the increased
culling age was already included.
Table 5 Reduction of losses due lameness and claw problems based on (Enting et al., 1997) and reduction of losses due to mastitis based on (Dijkhuizen, 1992)
Variable
Losses per case
Production losses
Early replacement
Labour
Treatment costs
Abnormal milk
Total attributable per case
Incidence Conventional
Incidence Kwatrijn
Reduction of losses
Unit
€
€
€
€
€
€
€
%
%
€
Lameness and claw problems
100
31
45
14
10
55
20
10
770
Mastitis
260
110
42
47
60
218
30
10
6,097
Housing
General assumptions regarding the housing are presented in Table 6. The main difference
between the Conventional and Kwatrijn barn is the space per animal, being 9 and 13,5 m2
respectively. Both barns have 144 lying places for the dairy cows. Both barns had a straw
pen of 62 m2 used for cows that require special attention. Total space for the cows was 1,512
m2 for Kwatrijn and 864 m2 for Conventional. The feeding alley had a standard width of 4,25
m. The volume of the animal manure storage was based on 75% of the total yearly manure
production.
Table 6 General assumptions regarding the housing for Conventional and Kwatrijn.
Variable
Area per animal
Animal area incl. walking and lying
Roof
Length roof
Width roof
Floor
Unit
2
m
2
m
2
m
m
m
2
m
Conventional
9
1,296
2,174
73
29.75
864
Kwatrijn
13.5
1,944
3,010
90
33.5
1,512
The total costs of the barn were calculated based on the different components, which are
presented in Table 7. For example the costs of the roof, floor, windbreak netting, substructure, segregated faeces storage and pavement were included. The roof of Kwatrijn is a zigzag roof, instead of a traditional gable roof in Conventional. Kwatrijn had a separate storage
for segregated faeces and segregated urine, while Conventional had slurry storage only.
Kwatrijn was equipped with the special designed floor with a sloped subfloor underneath to
quickly drain off the segregated urine. The combined price amounted €140 per m2, which
was higher than €80 for a standard low emission floor in Conventional. The segregated faeces were stored in a covered storage.
Table 7 Purchase values of different barn components in Conventional and Kwatrijn.
Variable
Roof
Windbreak netting
Concrete floor feed alley
Slurry storage
Segregated urine storage
Sloped subfloor
Barn floor
Segregated faeces storage, covered
Pavement
Unit
2
€/m
€/m
2
€/m
3
€/m
3
€/m
2
€/m
2
€/m
2
€/m
2
€/m
Conventional
95
225
32.60
95.55
80
35
Kwatrijn
105
225
32.60
95.55
45
95
95
35
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Data from the BINternet database (LEI, 2011) were used to validate the assumptions for
Conventional. A linear interpolation was applied to get the right values for a farm size with a
milk quota of 1,145,200 kg milk.
2.1.2
Sensitivity analysis
The simulation model was also used to perform a one at a time sensitivity analysis on the
input variables and assumptions of Kwatrijn. The parameters were varied in several categories being: Kwatrijn as proposed (K), Fertilization (F), Animal health (AH), Institutional developments (ID), and Farm intensity and manure disposal (FM).The relative effect of variables
on the difference in net farm income (DNFI) was calculated as the change in DNFI per % of
change of the variable. The ranges of variation are presented in table 9. Most parameters
were varied within a range between -20 and +20 percent. Some parameters, mainly in the
category Institutional developments and Fertilization, were varied in a different range due to
legislation or assumed practical relevance.
3
Results
The revenues in Kwatrijn were €2,582 higher compared to Conventional which was due to a
difference in cattle sales and roughage sales, see Table 8. The revenues from cattle sales
were lower for Kwatrijn due to the higher culling age of the cows in Kwatrijn that lowered the
number of culled cows per year. Besides, Kwatrijn was able to sell maize silage roughage
that generated additional revenues. The total variable costs were €16,745 lower for Kwatrijn
which was mainly due to the lower fertilization costs and the reduction of several losses due
to the better animal health in Kwatrijn. The total fixed costs in Kwatrijn were €27,174 higher
compared to Conventional which was mainly due to the higher costs of housing and mechanisation for Kwatrijn. The higher revenues and fixed costs and the lower variable costs in
Kwatrijn caused the net profit to be €7,847 lower for Kwatrijn. The calculated labour costs for
Kwatrijn were lower due to the lower calculated labour costs of the family employee in Kwatrijn due to the lower labour requirement. The difference between the calculated interest and
paid interest was larger for Conventional compared to Kwatrijn causing the difference in net
farm income from operation to be increased from the difference in net profit. This resulted in
a positive net farm income from operation of €44,974 for Kwatrijn and €55,230 for Conventional, a difference in net farm income €10,256.
Table 2 The net farm income from operation (€) per year for Kwatrijn, Conventional and the difference.
Variable
Total revenues
Total variable costs
Total fixed costs
Net profit
Calculated labour costs entrepreneur
Calculated labour costs family employee
Return to labour and management
Interest calculated (cost of total capital)
Interest paid
Net farm income from operation
Kwatrijn
460,623
99,031
398,018
-36,427
50,900
6,217
20,690
87,876
63,592
44,974
Conventional
458,041
115,776
370,844
-28,580
50,900
7,736
30,056
85,737
60,564
55,230
-
+
+
-
Difference
2,582
-16,745
27,174
-7,847
0
-1,519
-9,366
2,139
3,029
-10,256
Effects on DNFI per parameter
In Table 9 all the parameters from the sensitivity analysis are presented in order of influence
on the difference in net farm income from operation. The gross grass yield was most influential for the difference in net farm income from operation with €710 change of DNFI per % of
change of the parameter gross grass yield. Nitrogen and phosphate in segregated faeces did
not influence the difference in net farm income from operation within the given assumptions.
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Table 3 Change of DNFI per % change of all the variables included in the sensitivity analysis. With
categories: Kwatrijn as proposed (K), Fertilization (F), Animal health (AH), Institutional developments
(ID), and 3: Farm intensity and manure disposal (FM).
Variable
Gross grass yield
Culling age
Kwatrijn area per cow
Area cultivated land
Phosphate application norm grassland
Nitrogen application norm with derogation
Kwatrijn roof
Kwatrijn floor
Application costs segregated faeces
NFRV segregated urine
Kwatrijn manure robot
Kwatrijn subfloor
Mastitis incidence
Fertilizer price
Lameness/claw problems incidence
Ratio segregated urine / total manure production
Disposal costs segregated faeces
Nitrogen in segregated faeces
Phosphate in segregated faeces
4
Unit
kg dm/year
year
2
m
ha
kg/ha
kg/ha
2
€/m
2
€/m
€/ton
%
€
2
€/m
%
€/kg N
%
%
€/ton
kg/ton
kg/ton
Category
F
AH
K
F
ID
ID
K
K
F
ID
K
K
AH
F
AH
F
F
F
F
DNFI change
(€) per % change
710
670
-536
-436
-387
-350
-286
-130
-115
70
-65
-62
-61
30
-15
9
0
0
0
Range of
variation (%)
-20
+20
-20
+20
-20
+20
-10
0
-21
0
-32
0
-20
+20
-20
+20
-20
+20
-12
0
-20
+20
-20
+20
0
+200
-20
+20
0
+200
-20
+20
-20
+20
-32
0
-21
0
Discussion
This research used many assumptions and standard values from KWIN-Veehouderij, Handboek Melkveehouderij and LEI database BINternet. These standard values can differ from
practical values due to specific situations on the farm, and price fluctuations in time. We assumed that these assumptions had the same effect for Conventional and Kwatrijn, so that
results for differences in DNFI can be considered as valid.
The average culling age in Kwatrijn was assumed to be 7 years due to the improved housing
system for the cows. However, according to Gosselink et al. (2009), an improved housing
system only would not suffice to reach a culling age of 7 years. Also production level, farm
scale and management skills of the farmer play an important role. As shown in table 9 the
culling age is much more influential on the difference in net farm income the the mastitis,
lameness and claw problem incidences. Realization of a culling age of 7 years is therefore
very attractive for the net farm income, but still a challenge how to realize this on farms.
5
Conclusions
Given the assumptions the net farm income from operation of Kwatrijn is around €10.000
lower than of the conventional dairy farm. This is due to higher investments for housing and
higher manure application costs of segregated faeces. Variable costs in Kwatrijn are lower
due to improved animal health and lowered costs of manure disposal. The eight most influential assumptions are gross grass yield, culling age, area per cow in Kwatrijn barn, farm intensity, phosphate and nitrogen application norms and purchase costs of the Kwatrijn roof and
floor. Kwatrijn becomes economically more interesting with future expected institutional developments and possible developments trends such as abolishment of the derogation, lowering of phosphate application norms, higher farm intensities and higher fertilizer prices.
6
References
References can be obtained from the authors.
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