ECONOMICS OF ROBOT APPLICATION

Automated milking systems isa new technology recently developed for th e dairy industry. This paper examined the economic consequence of usin g this technology in place of a conventional parlor system on dairy fa rms in the Netherlands and in the US. The approach is general and can also be applied to other farm and price conditions. The base analysis indicates that in both countries the break-even level of the automatic system is nearly double that of the parlor system. The sensitivity, a nalysis indicates that the results can change fairly significantly whe n some assumptions are changed. This is particularly apparent with cha nges in wage rates. Lastly, with any new technology there may be some effects on the industry. Because of the nature of this technology, the industry effects will likely be fairly significant, particular with r espect to changes in the structure of the industry. (C) 1997 Elsevier Science B.V.