Managing Energy Costs in Dairy Farms

Dairy Farms

Energy usage on dairy farms has grown gradually in the past 20 years due to increases in farm sizes, use of automated equipment, and around-the-clock operation. Dairy farms in the U.S. typically consume between 800 and 1,200 kilowatt-hours (kWh) per cow annually. About 50 percent of the total energy used on a dairy farm goes toward milk-production equipment, which includes milk cooling, vacuum pumps, and water heating. Lighting and ventilation account for most of the remainder of energy used (Figure 1).

Average energy use data

Figure 1: Energy consumption by end use
Half of the total energy consumed on dairy farms is used for milk-production purposes—cooling, pumps, and water heating. Lighting and ventilation systems primarily consume the remainder of the total energy used.

In order to better manage your dairy farm’s energy costs, it helps to understand how you are charged for those costs. Most utilities charge commercial customers for their natural gas based on the amount of energy (in therms) delivered. Electricity, on the other hand, can be charged based on two measures—consumption and demand (Figure 2).

Figure 2: Diagram of a hypothetical daily load shape
Peak demands on dairy farms typically occur during milking periods. Most dairy farms will milk twice per day—once in the morning and once at night—but some dairy farms have three milking periods: morning, midday, and nighttime.

The consumption component of the electricity bill is based on the amount of electric energy, in kilowatt-hours, that the building consumes during a month. The demand component is the peak power, in kilowatts (kW), drawn by the farm during each month or, for some utilities, during the previous 12 months. Demand charges can range from a few dollars per kilowatt-month to upwards of $20 per kilowatt-month. Because demand can be a considerable percentage of your bill, you should try to reduce peak demand whenever possible. As you read the following energy cost management recommendations, keep in mind how each one will affect both your consumption and your demand.

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