U.S. dairy farmers are finally experiencing some price relief after four years of an economic downturn in which many farmers struggled to break even. But ongoing economic pressures will require farmers to leave no stone unturned as they seek to become more resilient. 

Across the country, dairy farmers and their supply chain business partners face myriad challenges including highly variable milk and feed prices, changing consumer preferences, unpredictable farm policies and extreme weather. At the same time, the impacts of nutrient loss on water quality are a major challenge for ag communities from the Midwest to the Chesapeake Bay, and many states and municipalities face near-term water quality milestones under EPA standards.

That’s the backdrop of a new report published today by Environmental Defense Fund and K·Coe Isom, How conservation makes dairy farms more resilient, especially in a lean agricultural economy. 

The report will be a key topic of discussion at the Sustainable Agriculture Summit happening in Indianapolis this week, where the state’s dairy industry has grown aggressively in recent years including the arrival of Walmart’s first-ever milk facility in the state last year. 

Our report digs into the budgets of four dairy farmers to compare how conservation practices impact farm budgets. The overriding lesson is that conservation contributes to the economic well-being and resilience of dairy farms, delivering multiple returns on investment benefiting the farm budget and the environment.

Specifically, we found that dairy farmers who adopt conservation practices that impact their cropping systems and dairy herd including manure storage, nutrient management, cover crops, conservation tillage and stream fencing realize a variety of cascading financial benefits such as reduced labor hours, savings on external feed and bedding, and lower vet bills due to improved herd health. 

Farmers across the country have been scaling adoption of these practices for years. For example in Indiana, recent surveys found that farmers planted more than 1 million acres of cover crops in 2018, up 32,000 acres from the previous year. They also shifted nearly 1 million acres from conventional tillage to conservation tillage, up 33% from 2012.

Our hope is that the insights from our report will help catalyze further conservation practice adoption in Indiana and across the country, as farmers are better equipped to realize the economic value of their actions. 

But they can’t do it alone. 

Our report identifies a few key recommendations for how both the public and private sectors can enable dairy farmers to tap into conservation’s economic returns and ensure taxpayers get the most for their investments. 

We found that farmers who have access to additional financial assistance for conservation through cost share programs and grants are typically able to make larger investments in practices that achieve even greater economic and environmental benefits. So increasing financial support for farmers through government programs, tax incentives and other innovative financing strategies is an important next step. 

Additionally, conservation districts, state agencies and USDA’s Natural Resources Conservation Service should provide more technical guidance to farmers and their advisers on how to track and assess the broader economic benefits of conservation practices. Part of this guidance should include extending contract lengths to encourage and enable farmers to reach the point at which conservation practices deliver a return on investment, which will ensure greater returns for taxpayer dollars when farmers maintain those practices.

Conservation is important to farmers’ economic viability and social license to operate, but they cannot do it alone. We need action across the value chain to improve the sustainability of the dairy sector and to maintain the unique livelihoods of dairy farmers for generations to come.

Suzy Friedman is senior director of agricultural sustainability at Environmental Defense Fund. Laura Sands is lead principal of production agriculture at K·Coe Isom, a national advisory and accounting firm focused on food and agriculture.