This is the fifth and final episode in our five-part look at the dairy industry, This episode focuses on sustainability efforts at all stages of the dairy supply chain.
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It’s something you’ve heard about before, but it’s picking up speed.
It’s something many people agree is important, but no one can really put a finger on precisely what it is.
And if you’re involved in production agriculture, there’s no ignoring it anymore.
It’s sustainability, and it’s playing an ever-increasing role in how the dairy industry thinks about the future.
Consumers want to see it, producers want to prove it, and dairy retailers want to market their progress on it. This leads to questions about just how to make that happen in a way that works for all three parties.
Some ideas are out there, and some proven technologies can make it all a little easier, but then comes the conversation about how to stay profitable while trying to be more sustainable.
So let’s see what it there is to learn about metrics and efficiencies and digesters and more.
Let’s talk sustainability in Agri-Pulse Deep Dive Episode 5: Sustaining a Living.
Sustainability is one of those things that means many different things to many different people.
This has long been one of the head-scratching parts about sustainability initiatives. There’s not really a government definition of sustainability, the EPA just says it’s commonly defined as the ability to maintain or improve standards of living without damaging or depleting natural resources for present and future generations. Private sector efforts can often use their own metrics, some of which can get, if we’re being honest, a little lofty in the eyes of producers. A lot of people are shooting for a lot of things, but how can goals be achieved if no one really knows where the goal line is, or even what field they’re playing on?
That’s an issue, but it’s not an insurmountable one. Improvement and effort without a defined endpoint is still improvement and effort, as we’ll learn in this episode.
But just for the sake of framing our discussion, let’s hear some thoughts on sustainability from some leaders on the subject.
First off, the nation’s top agriculture official, Ag Secretary Sonny Perdue. He recently appeared at the Cattle Industry Convention to speak to a gathering of the nation’s beef producers. Yes, I know this is a dairy podcast, but work with me here.
“I define sustainability this way. Certainly, there’s environmental sustainability. We’re talking to a group of people out here that are conservationists. They’re not going to poison their land because they make their livelihood off their land. They are environmentalists, frankly, and environmental sustainability is very important.
"Social sustainability; what we are compelled morally, I think, to do is provide available, accessible, affordable food for mankind. And these folks do a good job at that.
"But you’re not going to do those two types of sustainability if you don’t have economic sustainability as well. People gotta make a living. I mean, we love farming, we love ranching, we love growing and producing stuff, but we still gotta feed the kiddies, right?”
Perdue has a three-pronged approach: environmental, social, and economic sustainability. Other people in the industry have a similar view, and they think all three are important to consider when developing sustainability plans.
Jason Weller is currently the vice president of Truterra at Land O’Lakes, but his career has included stops on Capitol Hill and at USDA to focus on the issues of soil health and environmental sustainability. Most recently, he was chief of USDA’s Natural Resources Conservation service. He’s seen many different sides of the sustainability conversation, and he agrees with Perdue that there’s a number of factors at play.
“For us, for me personally, but also for Land O’Lakes as a dairy cooperative and a farmer cooperative, the way we define sustainability is both economics and environmental quality. So we want to focus on what is the bottom-line return on investment for the producer, for that farmer and that farm family, we want to ensure their production and economic success so it’s ultimately about net profitability, but as part of that, our second test then is how do we weave in practices and services that ultimately can help not just producers’ bottom line, but also steward their natural resources and ensure the long-term productive capacity of their soil and their water, which is then creating a lot of environmental benefit from improving and protecting environmental quality.”
OK, so we’ve got an idea of what it is we’re talking about, but let’s talk about the why.
Why does this conversation need to happen? Why do we need to be so worried about measuring sustainability? Why does the dairy industry need to put its collective heads together to figure out a path forward?
As Weller puts it, if agriculture wants to have any say in the conversation, it needs to play an active, early role.
“I think the responsibility of agriculture is to lean in and actually define that for itself. If agriculture lets others in the broader public sphere, whether that’s in Capitol Hill, or in the consumer space and food companies, if others are defining what is agricultural sustainability in absence of agriculture, I’m concerned that they might not get that right and their decisions may not actually have a good benefit or good return for those farm families and ultimately may require farms to take action that may not have the economic interest of those farms in mind. So instead, if we engage and we’re in positive constructive conversation but also to demonstrate our capabilities that we are actually protecting soil, protecting water, protecting the atmosphere and clean air and clean water, that then gives us the opportunity engage in other conversations that are important to agriculture and we are then defining for ourselves what is sustainable ag as opposed to someone else putting that definition up on the menu and forcing us to eat what they serve us.”
Alright, we’ve addressed the what and the why of sustainability. Now let’s talk about how the dairy industry is addressing it.
There’s a lot of different things that go into how an individual operation can improve their carbon footprint. Ben will talk about those later. But first, let’s talk about an industrywide campaign to figure out a more comprehensive approach to the issue.
About a dozen years ago, the U.S. dairy industry got together. They saw the dialogue that was on the horizon, they saw what was going to be asked of them, and they wanted to get out ahead of it. The Innovation Center for U.S. Dairy was the result.
Lisa Watson is a social responsibility officer for the Innovation Center. She says the group’s work has been building ever since its creation.
“So when our innovation center was formed back in 2008, I would say that the first eight or 10 years of our board work focused on building trust with each other. Because remember, this was very uncharted territory for leadership from farmers all the way through retailers were coming together. So they built trust, as they built trust, they were able to talk more about the value of the cross-industry forum and agreed on priorities, and then they came around to agreeing on what are the best ways of reporting against these priorities. So around the time that I came on board, we had a full set of metrics that were recommended that companies would use if they were reporting in different areas. But in 2018, the board said given the global challenges that we face as U.S. dairy today, we’ve got to do more than just have a set of metrics that say we urge you to report against these. We need to be able to come together, talk about what we’re actually doing, and we need to be able to speak with confidence about the strength of U.S. dairy and to do that, we’ve got to have some foundational data.”
That desire for data would eventually lead to the formation of the U.S. Dairy Stewardship Commitment.
To sum it up briefly, it’s a set of metrics and standards that folks various parts of the dairy supply chain will voluntarily commit to measuring. The metrics can be found online and range from water use to animal care for producers to food safety and community involvement for dairy processors. There’s a lot of things on the table and a lot of moving parts to the commitment, something Lisa says was intentional.
“Frankly, part of the reason for doing this is that we feel that if we can bring a little more uniformity to the marketplace and the expectations of the marketplace, that that may help reduce a bit of the audit fatigue that I think our whole industry — whether you’re a farmer or a cooperative or a processor — has faced over recent years. Our coops and farmers get just unbelievable numbers of surveys from customers and every survey is different, and expectations are different in every one, so if we can get our whole chain to agree on at least some of these important metrics, our hope is that if you adopt the commitment, that helps check some of those boxes with a high degree of assurance and credibility for our end customers.”
There’s a lofty goal the industry has as part of all of these metrics and reporting: carbon neutrality.
Even in an industry that works with a four-stomached ruminant animal, even with inputs that require several trips across the field by several different types of farm equipment, they think they can get there.
But some might need a little help.
“Yes, I believe it is a realistic possibility, and there any many people who are working to get today, again, to look at what are the right mixes of research that we need to do, incentives that would be necessary to get us there. Now, that does not mean that every farm will be net-zero, and that’s a very, very important part. We have to look at this as a collective. So some farms, some processors will be able to do some things, other farms and processors won’t. Some feed producers will be able to do some things, others won’t, but if you look at the whole collective of working together, I think that our industry is very optimistic about our ability to move forward in this area.”
Is a standardized sustainability scale the golden ticket to a better relationship with companies and consumers? Who’s to say. But there’s real optimism that being on the same page about the current state of dairy sustainability will set the table for a more informed conversation going forward.
“I think five years from now, we will be able to talk with much more substance about specific progress that we’ve made as U.S. dairy — again, that includes farmers through processors through retailers — in moving the needle on sustainability priorities. We have the mechanisms in place now to report, and I think the U.S. dairy story is strong, and five years from now, we will be able to document that we are the leaders from around the globe in dairy. We beat out our global competition in many different social responsibility priorities, and I think five years from now, we’ll be able to talk about that with significantly more confidence than we do today.”
To get where the industry wants to go, they’re trying to get a better idea of where they’re at. And to get where they want to go, they’re going to need a menu of options to get there.
Ben talks more about the dairy industry’s sustainability tools after this.
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I’ve got good news and some less good news.
On one hand, the consumer and corporate push for greater transparency in dairy production and the desire for more sustainable production isn’t going anywhere.
On the other, the dairy industry has plenty of ways to make that happen.
Let’s think about the dairy production process for a little bit.
Inputs like corn and alfalfa are grown and fed to cattle who produce raw milk, which is then trucked and processed into a wide variety of products, which are then distributed to consumers. It’s a relatively simple process: feed makes milk makes the products you see at the grocery store. But there’s a lot of moving parts and a lot of people involved.
Now let’s think about improving the sustainability of that system.
The pessimist sees this system and gets exhausted thinking about all the different aspects of the value chain that will require attention. The optimist sees many different ways to make improvement happen.
For the sake of this podcast, let’s be realists and talk about how it could get done.
Let’s start with the inputs, specifically feed. Dairy cattle need a lot of it. Depending on the breed, these animals typically weigh between 1,000 and 2,000 pounds. That’s a lot of silage.
Feed efficiency is kind of a common-sense thing, right? Dairies feeding hundreds or even thousands of cattle can see big benefits from even the most minute cost reductions in a daily ration. And finding cost savings that double as sustainability improvements? Even better.
Take, for example, Syngenta’s Enogen corn. It was originally produced with the goal of providing a key input for ethanol production, and animal feed benefits were discovered almost on accident.
“So early on, we were in the ethanol business and we’d get some feedback from producers at times, maybe they had their cattle out on (corn) stalks after they harvested crop and they would say ‘My cattle look better.’ Or they had some grain that they used and said ‘hey my cattle look better’ and after a couple years we started doing some research, and sure enough, both in beef cattle and the dairy industry over a few years of research we found that we’re seeing about a 5% feed efficiency when we use Enogen within the ration.”
That’s Chris Cook, the head of Enogen business for Syngenta. A 5% boost in feed efficiency isn’t a massive jump, but keep in mind: more sustainable and productive inputs can have a wide array of benefits throughout the process.
“You can think about I grow less crop, it’s going to take less nitrogen, less phosphorous, less land, any number of things you want to think about to say in order to get this same benefit, it takes less of these things. You can think about that on the input side, you can turn around and think about it on the output side too, right? So if I think about some data we just had done at a university up in New England in that area, they did some studies and they saw some significant reductions in methane, right, because we’re more efficient. They saw somewhere around a 7% reduction in greenhouse gas emissions, again, because it’s more efficient. It takes less water to produce the same gallon of milk because the product is more efficient.”
One convenient thing about this change is the minimal effort it requires on the part of the producer. There’s no new infrastructure to build out, no new training to conduct for their employees; just grab a different bag of #2 yellow corn for your planter and harvest as usual.
There’s other ways of using feed to improve environmental impacts, too. Maybe you’re heard about research into working seaweed or biochar into rations as a way to curb methane emissions. But at the end of the day, or more appropriately in this case the end of a meal, manure happens.
A lot of it. And trying to figure out what to do with it has long been a priority for the dairy industry.
One of the most common approaches is to spread it on a nearby field. It’s a simple enough approach, but fields only need so much fertilizer, and what happens when there’s still plenty of it available?
One answer might be the use of digesters to process manure into energy.
Don Niles is a dairy farmer from north eastern Wisconsin near Green Bay. He’s also a member of Edge, the sponsor of this podcast series. In 2001, he and a partner built a new dairy facility and included a digester in the construction process. Sure there’s some benefits like odor control, but there’s also some alternative benefits powering their decision to build a digester.
“Think of a digester as a big cow, a big rumen. We put the manure from our cattle, which contains a lot of carbon-based compounds and the bacteria in the digester — the digester maintains about the body temperature of a cow, about 100 degrees — and the bacteria in the digester will break down those carbon-based compounds into the simplest form of carbon they can, which is methane gas. And the methane gas is a byproduct of fermentation, which is what the bacteria do just like anything else that ferments like a brewery for example will produce methane or cows belching out in the field will produce methane. We collect those carbon-based compounds, break them down into methane, and then we extract that methane gas from the digester — just pull the gas out — and clean and separate out the methane from the rest of the gas in the digester.”
From there, producers have some options with what comes next. Niles used to sell the power generated by his digester to a local electric company, but now, he sells his methane to a company that processes it to be used as natural gas.
Digesters are a well-known way to address manure issues at the farm level, but they don’t come cheap. In fact, they can cost over $1 million. One company is trying to use unique financing options to encourage sustainable improvements like constructing a digester.
Glenda Gehl is a senior director of member relations with Land O’Lakes. Now remember, Land O’Lakes is a farmer-owned coop. The farmers produce milk for Land O’Lakes own a share of the business. And the company decided to use those shares to leverage their sustainability efforts.
“Our members are able to access their equity to borrow against for some capital improvements or some new technologies that they want to deploy on their farm that will help reduce their environmental impact. Really, these funds are there for the types of technologies that might be a little cutting edge or new and your traditional bankers might not necessarily be interested in signing up to finance because it is new and maybe not as proven of a technology or an ROI for the farm.”
One such project unfolded in California, where a group of dairy farms joined together to build a digester that then, in turn, provides power for City of Los Angeles transit fleet.
Customers aren’t limited to their using their borrowing power to construct a digester; Glenda said there’s also things like LED lighting or solar panels that would apply. The producer just has to agree to share data about the project with Land O’Lakes.
But if it is a digester, Don’s glad to see more of them in operation, because he sees it as a bit of a sustainability golden ticket.
“It’s one of our biggest opportunities we’ve ever had. You get your odor control, you get your pathogen reduction, especially if you’re in sensitive areas for groundwater, that’s huge. I think people like the idea that farms are doing something — even though there’s a return on it, it’s not a huge return — that farms are doing something to be good neighbors and good environmental stewards. I think it helps people understand the ethics of the farming community that we’re willing to do these things to take on some extra risk and extra cost, but do these things for the good of our environment.”
By the way, we mentioned Land O’Lakes and some of their dairy efforts, but it’s important to note some of the efforts that company and others are making on the soil health side of the conversation too.
For instance, Danone North America recently announced a 50,000-acre soil health commitment that it says is aimed at improving the economic resiliency and soil health of farms, including some of the operations in their own supply chain. The goal is to up the ante to 100,000 acres by 2022.
Land O’Lakes also has what it calls the Truterra Insights Engine, which provides targeted soil health tools for producers seeking to improve the sustainability of their operations.
Let’s talk about one last part of the dairy production system, one that doesn’t typically get a lot of attention: the calves.
We know that dairy cows give birth to calves as part of the dairy production process. But what we’re learning more about is how those calves can be a part of lowering the industry’s carbon footprint.
Dairy calves that aren’t added back into the dairy herd are harvested for beef. Sometimes that’s in the form of veal, sometimes that’s after an extended stay in the feedlot.
Don Close is a senior animal protein analyst with Rabobank. As he tells us, targeted genomics can lead to a more productive herd.
“The classic way of operating a dairy was they would retain all of the heifer calves, develop them all, breed them, get them in the parlor, and then determine which ones of them they wanted to keep as replacements. This program, through the genomics or through just pounds of milk produced, they’re selecting the 30% of their elite cows, and they’re using sexed dairy semen for heifer semen to breed that 30% of the cows, and that’s where their replacement females are coming from. That in turn frees up the remaining 70% of the cows, and they’re not using sexed semen on that half they’re just using beef semen and whatever the natural sex 50-50 split is, those animals are then taken as day-olds to a calf ranch, to a grow yard, and worked into the beef system.”
Here’s where the sustainability side of things comes in.
Traditionally, beef from dairy calves is not really the cream of the crop stuff. It’s good, but there’s better out there. It also takes a traditional Holstein, for example, a little longer to get to a harvestable maturity.
But crossbreeding the dairy cattle with beef semen is shown to produce a more efficient animal.
“With the determined selection, we’re getting an animal that improves feed efficiency, improves conversion, so you’re harvesting that animal four months earlier than you are a straight fed dairy animal. So the carbon footprint of that animal, the sustainability of that animal works.”
There’s still research being done to determine the best beef and dairy breed crosses for optimal beef. But initially, the quality is a similar to what is expected when breeding two beef breeds together. Combine that with a shortened harvest time and it’s a good combination.
We’ve talked about a number of different options available for sustainability improvements here. There’s also quite a few out there that we weren’t able to get to. But make no mistake, it’s an important topic across the industry, and producers are taking notice.
Which leads us to our final thought: Where is this going, and who is going to pay for it?
Digesters aren’t free. Neither are solar panels. Neither is more efficient feed. Even a hypothetical new way to cut a dairy’s water use in half isn’t going to eliminate the need for water in its entirety.
So farmers, processors, and companies might be hoping to collect a premium for their efforts. But if everyone is working to improve their sustainability, how can everyone collect a premium? Doesn’t that then just become the new price?
Glenda, for one, wants to see the conversation move past that.
“We can look at a lot of other different types of premiums that have been in our marketplace before, so we think about an RBST-free premium; Initially when that was enacted, because the majority of the milk produced in the United States was using RBST, there was quite a large premium when you weren’t using it, right? I see a lot of different parallels here where I think the leaders here and the early adapters that there absolutely will be an advantage for them and some type of premium as we continue to work with our customers. But I think over time, we’ll have to be even more creative on how we drive that premium back to the farm. I get that question all the time, and I do believe that we have to shift our thinking beyond premiums.”
Other people may agree, other people may disagree, but one thing’s for certain: the dairy industry we see today is almost unrecognizable from the industry of 30 years ago. And 30 years from now, we’ll probably say the same thing about today.
We covered that in the first episode of this series when we explored how the industry as changed. We explored the policy hurdles the industry faces on Capitol Hill and the difficulties of a complex regulatory environment.
We talked pricing and how farmers get their money, scratched the surface of federal milk marketing orders, and learned more about the long battle the industry has faced in securing a stable work force.
And now, we’ve discussed what honestly might be the biggest hurdle the industry has faced yet: A changing consumer with rising expectations for sustainable practices.
Our previous episodes can be found on Agri-Pulse.com or your favorite podcast app. You can also find transcriptions of each episode on our website with additional graphics and photos. We hope you’ve enjoyed our comprehensive look at this critical sector of agriculture on this season of Agri-Pulse Deep Dive.
For more news, go to www.Agri-Pulse.com.