The decision between building a free-stall barn or housing cows in dry-lot facilities must be based on more than just the cost of construction. Dairy researchers at Kansas State University have developed a list of things you need to consider:
1. Site. Dry lots traditionally are built in arid locations with less than 20 inches of rain.
2. Temperature. Extreme cold and heat favors free-stalls.
3. Urban pressure. Out of sight is sometimes out of mind.
4. Environmental concerns. Free-stalls or enclosed barns are often built to control runoff.
5. Investment cost. According to Kansas State University farm management guides, the average investment per cow is $750 more for free-stalls than for dry lots. That difference must be paid for by increased milk production.
6. Management style. Higher levels of production require management with greater attention to detail. If your management intensity is not that high, it may be difficult to achieve production levels to support the extra cost of a free-stall barn.
7. Animal health. In terms of general cow health, free-stalls have the advantage as they provide greater protection from the environment. However, dry lots may reduce hoof and joint problems, and give an advantage heat detection and natural-breeding programs.
8. Labor efficiency. Consider the cost per hundredweight of milk produced and management’s ability to guide a work force. On average, dry-lot dairies have about 130 to 140 cows per employee, whereas free-stall facilities have 90 to 100 cows per employee.
9. Forage quality. When you build a free-stall barn, you must commit to producing greater quantities of milk. That requires careful attention to forage quality.

Either system can be financially rewarding. But the risks and management style needed are different for each.