A dairy turnout paddock for one generation last century is now the site of Australia’s first fully-automated fully-housed free-stall Lely dairy barn, operating in East Gippsland, Victoria.
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Reinie Kennedy’s maternal grandparents kept the Forge Creek farm for their heifers, when they ran their dairy at nearby Lindenow.
Kevin and Pat Coster sold the farm to their daughter, Debbie, and her then husband, Gary Kennedy, 33 years ago.
In 2008, a Herringbone dairy was built on the site and operated for a decade. Reinie completed his apprenticeship working in this dairy.
In 2016, he worked for a year in the UK and saw how barn-housed dairy production systems operate.
In 2024, Reinie and Bree Kennedy bought the farm from his parents, Gary and Debbie.
Although they were successfully operating their own cropping and sheep and beef breeding businesses, purchasing the family farm caused Reinie and Bree to think about further initiatives for ensuring cashflow.
The distance of the farm from a three-phase power supply was an issue in their plans.
But Reinie had an itch to scratch — he wanted to get back into the dairy industry and thought robot milking units would enable him to do that.
“I also wanted to build something that allowed us to benefit from dairy, but not be committed to milking seven days a week,” he said.
“It’s exciting to be using technology to get into dairy farming.”
Bree was supportive. She had her own experience in the dairy industry, as a milker on a farm at Tinamba and working as a herd tester for HICO.
“We wanted a dairy setup that would provide a wage, and cover the return on investment,” Bree said.
“Dairy creates a milk cheque every month. That compared favourably to the fluctuating returns with our sheep and beef farming.”
The dryland conditions of the farm were also a consideration. A bore put down in 2008 could provide stock water, and irrigate a crop, but the regular drought conditions in the Bairnsdale district meant the dairy could not rely on a pasture-based system.
“I have mates in the Macalister Irrigation District, and they’re awake at night moving irrigators and turning on irrigation,” Reinie said.
“It rules their lives. I didn’t want to do that just to have a bit of green grass.
“But we also knew we couldn’t operate a dairy with a pasture-grazing system.”
Reinie and Bree could use their irrigation to grow and stockpile fodder, so they would be able to plan well in advance for how many dairy cows they were going to feed, year-on-year.
In October 2024, Reinie made a phone call that changed everything.
He telephoned the Lely Center at Warragul and posed the question about constructing a free-stall dairy system where the cows remained in the barn year-round, and were milked in a robot unit.
Dale Serong, of Lely Center at Warragul, introduced Reinie and Bree to Andrea Meerwarth and Chris Neuhauser who were fellow Lely Gippsland staff members.
They also both had many years of experience installing barn-housed Lely dairy systems in Germany, prior to moving to Warragul.
For Andrea and Chris, the opportunity posed by Reinie and Bree was without precedence in Australia.
Andrea and Chris would be able to bring their considerable experiences in Germany to help design and construct a new style of dairy for Australia, in a country where pasture-based grazing is the norm for the industry.
“When I was in England, every dairy farm I went to was operating with their cows in a barn,” Reinie said.
“Energy usage was low and feed usage was high.
“I didn’t want to do a conventional dairy system here, because the droughts are hard in this district.
“I crunched the numbers and figured we could produce the fodder.
But I didn’t know where or how to start – and whether to have the cows half in the barn and half the year outdoors, or to have them in the barn all the time.”
Reinie and Bree talked to their business consultant, a dairy field worker and Andrea and Chris.
They extended their discussions to a bank manager, and, among several other people, Reinie talked to two of his mates who were electricians about how to compensate for the lack of electricity to the site.
Sam Tselepis and Dylan Dukakis, of Precision Point Electrical, solved the problem – based on the forecast power usage provided by Andrea, they would be able to install a solar panel system, battery and invertor that would provide reliable off-grid power.
“There’s only a limited amount of two-phase power available, and that’s located away at another part of the farm,” Sam told Dairy News Australia.
“Three-phase power is also kilometres away.
“So we had to go fully off-grid.
“Lely had the numbers for power usage.
“The whole installation runs the robot milking unit – and is set up for installing a second unit – the chiller, vats, hot water service, manure collector, office, calf shed, lights in the dairy shed and hay shed, external lights, the overhead sprinkler system that provides comfort for the cows in hot weather.”
The power installation includes 50 kilowatt of solar with panels on the roof in an east-west setup, 60kW hours of battery, and is wired so a back-up diesel generator can be switched on if necessary.
It was on holiday in February 2025 that Reinie and Bree made the decision to go ahead with their new investment. They visited Clydevale Holsteins at Macorna North (Vic) and discussed with Colin Dee the option of buying cows.
The multi-generation Dee family operate Lely A5 robot units and their milking herd is housed in a barn.
“We got in our car and started talking about what we were going to do,” Bree said.
“That was the whole trip home — talking about it,” Reinie said.
Site readiness began in March.
They retrofitted the old herringbone dairy shed and began extending it.
The first stage included one robot unit which was installed on slats put over the old pit.
The shed size was extended to 30x32 metres, concrete was laid and bitumen overlaid to provide an even floor surface.
A feed pad was constructed on the east side of the barn, also undercover.
Overhead sprinklers were installed, along with the free stalls and rubber matting as beds for the cows.
There are two double rows of stalls under the roof and a single row along the west side of the shed.
Rain water is harvested from the dairy shed roof, hay shed and calf shed.
Water usage was calculated to the litre by Andrea — 1500litre/day and 1.27litre/milking.
By November, stage one construction was complete. A truckload of — 46 cows, some in-calf, others fresh-in-milk and a few dry, arrived from Clydevale Holsteins in December 2025.
“They arrived, got off the truck, entered the barn, saw the robot unit, and they were into it,” Bree said.
“Everything was familiar to them, and it’s been a low stress learning curve for us and the cows.”
After six months and 185 days in lactation, milk yield is averaging 30 litres/day/cow, at 3.52 per cent protein and 4.85 per cent fat. The herd is averaging 2.6 milkings per day.
The best cow is producing 55 litres/day of milk, doing four milkings a day.
The herd is now 61 cows, and Reinie and Bree have adopted year-round calving.
Bree is a qualified AI technician and is optimising sexed semen for the first year of joining.
“The business is based on year-round milking,” Bree said.
“We’re catching the cows for joining on their natural cycle.”
All cows wear collars to measure their heat cycle against production.
“We’re prepared to go out to 400 days before joining, if the cows fresh-in-milk keep producing their optimum volumes,” Reinie said.
Semex sexed semen straws are used on first and sometimes second joinings, followed by beef semen.
Stage two shed construction has already begun and will be completed by November this year.
The shed is being extended to 40x45 metres.
Then the next load of cows from Clydevale Holsteins will arrive, increasing the milking herd to 85 cows.
“We’ll use compost bedding for the first 12-18 months, and we’re installing a second robot milking unit,” Reinie said.
“The second RU will be set as a mirror to the original, and we’ll use drafting gates to keep the two herds separate.
“It’ll allow us to get our cow numbers right.
“Eventually we’ll construct a second feed pad, on the west side of the shed.”
When stage three is complete, with additional free stalls and rubber mat replacing the compost bedding system, Reinie and Bree expect their shed to be housing 120 cows milking in two robot units.