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REALIZING ECONOMIC POTENTIAL
THE SMART MONITORING SYSTEM IN A MEDIUM SIZE FARM
Example Calculation of Incremental Profitability from Use of iNOVOTEC / smaXtec Smart Monitoring System
Inputs:
Size of Herd (Cows) 500
Herd Turnover Frequency (years) 3
Susceptability to Improvement 50%
Calculated Quantities:
Number of new lactations cows per year 167
Number of cows with previous lactations 333
Number of first lactation cows in optimization mode 33
Number of first lactation cows in maintenance mode 8
Number of cows with previous lactation in maintenance mode 33
Number of pH & Temp Sensors required annually 75
Annual Cost of pH & Temp Sensors $45,000
Annual Cost per Cow for the Herd $90
Daily Cost per Cow for the Herd $0.25
Total number of Cows with pH & Temp Sensors at Steady State 225
Calculated from USDA data (below):
Baseline Expected Milk Output 112,895
Baseline Expected Production Value $2,534,493
Baseline Expected Cost of Feed $1,757,775
Baseline Expected Operating Profitability $388,359
Baseline Expected Net Profitability ($277,722)
Cost of feed after application of efficiency factor $1,625,942
Annual Incremental profitability based on added production $125,000
Annual Incremental profitability based on herd health improvement $125,000
Annual Incremental profitability based on increased feed efficiency $131,833
Total Annual Incremental Profitability from Use of Sensor $336,833
USDA Annual Milk Production Data – 20134
Upper Threshold Herd Size 49 99 199 499 999 1000+
Milk Output (cwt) 153.65 171.37 189.27 198.42 225.79 230.16
Production Value (per cwt) 24.88 24.21 23.42 23.09 22.45 21.14
Feed Cost (per cwt) 21.31 19.35 18.21 17.72 15.57 13.4
Operating Profit (per cwt) -1.09 0.39 1.39 1.39 3.44 5.27
Net Profit (per cwt) -26.03 -16.19 -9.58 -7.07 -2.46 0.83
Assumptions:
pH & Temp Sensor Price (quantity 1) $600
Optimization Mode Rate 20%
Maintenance Mode Rate 5%
Production Premium (per cow) $500 References 1-3.
Health Premium (per cow) $500 Reference 2.
Feed efficiency improvement 7.5% Anecdotal customer experience (Germany).
Optimization Mode is applied to all cows in their first
transition to lactation. Maintenance Mode is applied to
all other cows in any phase of lactation including dry.
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Example Calculation of Incremental Profitability from Use of iNOVOTEC / smaXtec Smart Monitoring System
Inputs:
Size of Herd (Cows) 1000
Herd Turnover Frequency (years) 3
Susceptability to Improvement 50%
Calculated Quantities:
Number of first lactation cows per year 333
Number of cows with previous lactations 667
Number of first lactation cows in optimization mode 67Number of first lactation cows in maintenance mode 17
Number of cows with previous lactation in maintenance mode 67
Number of pH & Temp Sensors required annually 150
Annual Cost of pH & Temp Sensors $90,000
Annual Cost per Cow for the Herd $90
Daily Cost per Cow for the Herd $0.25
Total number of Cows with pH & Temp Sensors at Steady State 450
Calculated from USDA data (below):
Baseline Expected Milk Output (cwt) 230,160
Baseline Expected Production Value $4,865,582
Baseline Expected Cost of Feed $3,084,144
Baseline Expected Operating Profitability $1,212,943
Baseline Expected Net Profitability $191,033
Cost of feed after application of efficiency factor $2,852,833
Annual Incremental profitability based on added production $250,000Annual Incremental profitability based on herd health improvement $250,000
Annual Incremental profitability based on increased feed efficiency $231,311
Total Annual Incremental Profitability from Use of Sensor $641,311
REALIZING ECONOMIC POTENTIAL
THE SMART MONITORING SYSTEM IN A LARGE SIZE FARM
USDA Annual Milk Production Data – 20134
Upper Threshold Herd Size 49 99 199 499 999 1000+
Milk Output (cwt) 153.65 171.37 189.27 198.42 225.79 230.16
Production Value (per cwt) 24.88 24.21 23.42 23.09 22.45 21.14
Feed Cost (per cwt) 21.31 19.35 18.21 17.72 15.57 13.4Operating Profit (per cwt) -1.09 0.39 1.39 1.39 3.44 5.27
Net Profit (per cwt) -26.03 -16.19 -9.58 -7.07 -2.46 0.83
Assumptions:
pH & Temp Sensor Price (quantity 1) $600
Optimization Mode Rate 20%
Maintenance Mode Rate 5%
Production Premium (per cow) $500 References 1-3.
Health Premium (per cow) $500 Reference 2.Feed efficiency improvement 7.5% Anecdotal customer experience (Germany).
References:1. J. Gasteiner, B. Boswerger, T. Guggenberger, Der Praktische Tierarzt, 93, 2-10 (2012).2. K. M. Krause & G.R. Oetzel, Animal Feed Science and Technology, 126, 215-236 (2006).3. W.C. Stone in Proceedings of the Cornell Nutrition Conference for Feed Manufacturers, Cornell University, Ithaca, New York, 40-46 (1999).4. http://www.ers.usda.gov/data-products/milk-cost-of-production-estimates.aspx#.U9Fq5FbTwkJ
Optimization Mode is applied to all cows in their first
transition to lactation. Maintenance Mode is applied to
all other cows in any phase of lactation including dry.