8 min read read
A milking parlour upgrade or a move to robotic milking is one of the largest single investments a dairy business will make, and unlike arable machinery it can't simply be delayed a season if the timing isn't ideal — a failing parlour is a welfare and production issue, not just a cost decision.
The situation
Robotic milking systems typically run £120,000-£180,000 per robot, with most farms installing two to four depending on herd size, alongside building work, cubicle changes and feed system integration. A conventional parlour rebuild is usually £100,000-£250,000. Livestock handling systems — crushes, races, weighing — are a smaller but still significant spend, often £15,000-£40,000.
Milk income arrives monthly and is relatively predictable compared with arable harvest income, which actually makes level monthly payments a reasonable fit for dairy — the exception being where a herd is being built up or a system is bedding in and yield takes several months to reach target.
What tends to go wrong
- Underestimating the build and installation cost around the equipment itself, which can be 20-30% of the robot or parlour price
- Assuming yield improvements from a new system will fund higher payments from month one, when herds typically take two to six months to adapt
- Financing handling equipment on the same facility as the parlour when it would sit better on a shorter, separate term
- Not checking whether existing borrowing (e.g. an agricultural mortgage) already has covenants affecting new secured finance
How we would structure it
Hire purchase over a term that reflects the working life of the system — commonly 7-10 years for robotic milkers and parlours — with a modest payment holiday or stepped-up profile in the first few months while yield beds in. For herd purchases or a full parlour rebuild alongside building works, a secured business loan or agricultural mortgage may sit better where property is involved, working alongside asset finance for the equipment itself.
| Asset | Typical structure | Term |
|---|---|---|
| Robotic milking system | Hire purchase | 7-10 years |
| Conventional parlour rebuild | Hire purchase or agricultural mortgage (if building work is extensive) | 7-10 years |
| Handling equipment | Hire purchase | 5-7 years |
Worked example
Illustrative robotic milking installation
- Two-robot system incl. installation
- £310,000
- Deposit
- £31,000
- Amount financed
- £279,000
- Structure
- Hire purchase, 8 years, stepped first 3 months
- Standard monthly payment (illustrative)
- £4,650
Figures are illustrative only and depend on rate, deposit and underwriting at the time.
What to have ready
- Milk contract details and recent milk cheque statements
- Herd size and any planned changes to stocking
- Quotes for equipment and any associated building work
- Details of existing agricultural borrowing and any covenants attached
Talk to us early if building work is involved — the equipment finance and any property-secured element usually need to be arranged in parallel, not one after the other.
Next step
Talk through the numbers with us
Send us the details of the asset and we will come back with an indicative figure and a properly structured option from the funder panel. No obligation, and no pressure to proceed.