New U.S. Dairy Sustainability Report reinforces progress across environmental impact, animal care, nutrition and food security, including nationally-aggregated processor data
ROSEMONT, Ill., Sept. 16, 2021 /PRNewswire/ — As society wrestles with threats to the global food supply and leaders prepare to convene for the United Nations’ first-ever Food Systems Summit, the U.S. dairy community is reaffirming its commitment to be part of the solution, pledging to address its total greenhouse gas footprint and setting goals to achieve carbon neutrality, optimize water use and improve water quality by 2050. In addition, U.S. dairy is strengthening equitable access to nutritious dairy foods around the world while ensuring animal and employee welfare through a transparent production system.
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Through the Innovation Center for U.S. Dairy and the support of key stakeholders like Nestlé and The Nature Conservancy, the community is accelerating adoption of new practices and technologies that use fewer resources and emit fewer greenhouse gases, including methane, while producing innovative and affordable products that sustainably nourish a growing global population.
“The past 18 months have challenged us in ways we never thought possible, reinforcing the essentiality of a strong, resilient supply chain,” said Mike Haddad, chairman, Innovation Center for U.S. Dairy. “As food systems transformation takes center stage, the U.S. dairy sector is undergoing a transformation of its own – not only as an affordable and sustainable food enjoyed by people around the world but also as a future source of bio-based energy and products contributing to a circular economy and a cleaner planet.”
U.S. Dairy’s Game-Changing Solutions
Ahead of the Food Systems Summit, the UN solicited “game-changing” ideas, initiatives and innovations that have the potential to bring about positive change. Fueled by the ingenuity of thousands of visionary dairy farmers and underpinned by the industry’s Stewardship Commitment and 2050 Environmental Stewardship Goals, the U.S. dairy industry responded with three game-changing solutions:
- The U.S. Dairy Net Zero Initiative, a five-year, industry-wide effort to accelerate progress toward the 2050 Goals. Through foundational research, on-farm pilots and development of new product markets, NZI aims to make sustainable practices and technologies more accessible and affordable for U.S. dairy farms of all sizes and geographies.
- The National Dairy Farmers Assuring Responsible Management (FARM) Program, an internationally-certified industry initiative to ensure transparent production practices and provide assurances that U.S. dairy farmers are global leaders in animal care, antibiotic stewardship, biosecurity, environmental stewardship and workforce development.
- School Nutrition and Food Bank Partnerships, allowing the U.S. dairy community to draw on decades-long relationships to quickly adapt in crisis situations; provide nutrition to people experiencing food insecurity, especially children; support farmer livelihoods through market access; and promote resource conservation through strengthened supply chains.
“Supporting and enabling farmers through game-changing programs like the Net Zero Initiative has the potential to transform the dairy industry,” said Emily Johannes, senior manager of sustainable sourcing at Nestlé. “Scaling up climate-smart agriculture initiatives is key to Nestle’s ambition to achieve net zero greenhouse gas emissions by 2050 and will help reduce the carbon footprint of many of our brands. We are excited to be the first corporate partner to collaborate with the U.S. dairy industry and our suppliers to contribute to an even more sustainable supply chain.”
A First for U.S. Dairy – Transparent Reporting of Processor Data
The U.S. dairy industry recently released its biennial Sustainability Report reflecting contributions to and progress against social responsibility priorities including environmental impact, animal care, food safety and community contributions. The Report also details strategies for achieving U.S. dairy’s stated goals and the industry’s future reporting commitments.
Marking a significant milestone in U.S. dairy’s sustainability journey, this year’s Report incorporates nationally-aggregated processor data, a first for U.S. dairy. Dairy processors representing 75 percent of U.S. milk production developed and provide ongoing support for a reporting tool to serve as a credible and consistent way to calculate and track processor sustainability progress. Aggregations on GHG and water intensity, as well as other sustainability metrics, will serve as a baseline for future reporting.
A sampling of the industry’s collective achievements during the reporting period include:
- By making use of the water present in milk, U.S. dairy processors were net positive for water, returning more than they withdrew from municipal and other sources.
- More than 95 percent of waste from reporting processors was recovered, redirected and put to beneficial use (vs. sent to landfill).
- The U.S. dairy community provided 1.538 billion servings of fresh milk and dairy foods in 2020 to food banks in the Feeding America network, a 33 percent increase over 2019.
- The U.S. dairy industry supported 3.3 million jobs in the U.S. and contributed $752.93B in total economic impact1.
Partnerships Fueling Continued Improvement
In addition to investments farmers are making on their own farms, strategic collaborations across agriculture and with global corporations bring added value through expertise, leadership and financial support to drive sustainability-focused innovations.
Last year, Nestlé committed up to $10MM in a multi-year partnership with U.S. Dairy’s Net Zero Initiative to support scaling access to environmental practices and resources on farms across the country. In the partnership’s first major milestone, Nestlé and its CARNATION® brand recently announced that Trinkler Dairy Farm, a CARNATION® supplier, is the first partner farm of the NZI Dairy Scale for Good pilot, seeking to implement sustainable farming practices and technologies to demonstrate the economic viability and scalability of reaching net zero greenhouse gas emissions. These learnings will help document the value of farm-powered solutions and make innovative technologies more accessible and affordable for all dairy farms.
Other partnerships include Starbucks, which also announced a $10MM, multi-year commitment to dairy sustainability via U.S. Dairy’s Net Zero Initiative, as well as The Nature Conservancy, serving as a strategic advisor and providing access to TNC scientists, conservationists and experts to help advance work in biodiversity, soil health and regenerative agriculture practices, water quality and practical solutions to reach the industry’s 2050 Goals.
“These investments reinforce the meaningful role dairy plays in sustainable diets, both now and in the future,” added Haddad. “These and other partnerships across the value chain help accelerate our collective impact, all in the name of forming a more regenerative, equitable and nutritious food system.”
About the Innovation Center for U.S. Dairy
The Innovation Center for U.S. Dairy® is a leadership forum that brings together the dairy community and third parties to address the changing needs and expectations of consumers and customers. Initiated in 2008 by dairy farmers through the dairy checkoff, Innovation Center leaders and members collaborate on important areas like the environment, nutrition and health, animal care, food safety, and community contributions. Through the Innovation Center, the U.S. dairy community demonstrates its commitment to continuous improvement from farm to table, striving to ensure a socially responsible and economically viable dairy community. For more information, visit www.USDairy.com.
SOURCE Innovation Center for U.S. Dairy
Dairy CEOs appear energized and prepared to lead the industry toward a customer-centric post-COVID-19 future.
In the early days and months of the COVID-19 pandemic, the dairy industry faced challenges—such as shifts in supply and demand—as food service demand fell and retail demand skyrocketed. However, the industry ultimately emerged intact thanks to adjustments such as portfolio simplification and manufacturing flexibility. What was the experience like for the dairy industry, and how do executives plan to proceed?
To answer these questions, McKinsey conducted a survey of more than 50 US dairy CEOs in the fourth quarter of 2020. These results were augmented with in-depth interviews. In the survey, we asked executives across the value chain for their feedback on how COVID-19 affected their businesses and how they’re thinking about the future of dairy. We’ve summarized the key trends and findings below and offer three recommendations to address them: expand the talent pool and ways of working, embrace a “One Health” approach, and establish flexible supply chains that can respond to unexpected disruptions. Executives who pursue these suggestions can position their companies for long-term growth.
How the US dairy industry fought pandemic headwinds
For dairy overall, 72 percent of surveyed executives reported neutral or improved margins in 2020; this generally holds across small and large (more than $1 billion in revenue) companies and across subsectors, including retail, packaged goods, food service, ingredients, processors, suppliers, and distributors. Certain product categories outperformed, driven in large part by a shift toward eating more at home: 54 percent of dairy consumers reported cooking more since the start of the pandemic. As a result, butter retail sales increased 32 percent in 2020, and fluid milk bounced back from negative growth and saw a 206 percent increase in volume sales across retail and food service in 2020, as compared with four years prior. What factors enabled some dairy companies to emerge relatively unscathed?
Operational shifts (and a bit of luck) helped mitigate supply challenges
Executives may recall empty dairy shelves during the first two months of the pandemic, juxtaposed against images of US dairy farmers pouring out tanks of milk. Dairy Farmers of America estimated that “milk dumping” produced up to 3.7 million gallons of waste a day in April 2020.1 This supply-and-demand mismatch early on was created by an abrupt shift in demand, from food service to retail. Many producers and co-ops, locked into food service supply contracts, were left without an outlet, while many manufacturers had food service–specific production facilities that were unable to shift seamlessly toward retail. This abrupt shift of the dairy market from food service to retail overwhelmed distribution warehousing and logistics in the short run, further disrupting the dairy supply chain.
While nearly all dairy companies struggled to adjust to the new normal during the early stages of the pandemic, most capitalized on increased retail demand through inherent or reactive operational flexibility. The following four factors contributed to their success:
- Manufacturing and channel flexibility. Seventy-three percent of dairy executives reported being able to shift production from food service to retail between March and April 2020, a move mostly dependent on the preexisting position of plants. Processors interviewed in October 2020 communicated a feeling of luck that their plants were interchangeable or that excess capacity in retail plants allowed them to meet the swell in demand. One CEO said, “We inadvertently had the right system for the crisis and were able to pivot manufacturing from food service to retail by flexing our plants.” This highlights the value of flexibility and how systems could benefit from such adaptability in the future.
- Collaboration across the value chain. Dairy executives referred to the unprecedented collaboration and communication required to address supply-chain disruptions. Producers, processors, packagers, distributors, and retailers coordinated among themselves, as well as with local and state authorities, to ensure products reached shelves. According to one executive, “Constant communication and give-and-takes within our supply network allowed us to quickly adapt our products and get them to consumers.”
- Simplification. SKU rationalization characterized much of the crisis. To meet increased demand and competition for space in distribution and retail networks, companies moved away from a historic focus on variety and moved toward the basics. In the words of one executive, “We’re just offering chocolate, vanilla, and strawberry ice cream, given [retail] real estate constraints—and consumers are happy with that!” Forty-one percent of processors interviewed reported pursuing SKU rationalization, especially in the short term—but some have plans to also streamline their portfolios in an ongoing way.
- Adaptation to remote work for employees not on the front line. While executives communicated the challenges of remote work, they also appreciated important silver linings. Most notably, remote work has widened the talent pool by loosening geographic constraints and opening opportunities in areas that typically present a challenge for the industry, such as engineering support roles. One executive said, “We’ve struggled with talent in the past but are now able to look at a broader set of candidates.”
What executives think about the future
Survey respondents are optimistic about future growth and recovery from the pandemic. In fact, 84 percent expect annual revenue growth of at least 3 percent over the next three years, and most expect favorable growth on volume and margins (Exhibit 1). This optimism is likely driven in part by the 70 percent of executives who believe the negative impact of COVID-19 will subside during 2021.
However, three uncertainties are top of mind for executives: shifting consumer preferences, the changing landscape of retailers and channels, and finding new ways to use technology. Agility is key to addressing these issues.
Shifting consumer preferences
Dairy executives are 15 percentage points less confident in their ability to identify consumer trends today than they were in 2019: 28 percent in 2020 versus 43 percent in 2019. Nonetheless, 66 percent of executives report increasing their level of investment in innovation, with a particular focus on sustainability, health and wellness, and convenience; 56 percent report dedicating resources to sustainable packaging, and 52 percent plan to launch protein-enriched or pre- or probiotic products in 2021. Executives continue to focus on nondairy alternatives, which are generally perceived by consumers as healthier and more environmentally sustainable (representing strong drivers for the nearly 50 percent of consumers who purchased dairy alternatives during the pandemic); 30 percent of CEOs report interest in adding plant-based products to their product portfolio. Also, 29 percent of executives are investing in packaging that extends a product’s shelf life, a convenience consideration for consumers looking for at-home stocking options.
Twenty-nine percent of executives are investing in packaging that extends a product’s shelf life, a convenience consideration for consumers looking for at-home stocking options.
Changing landscape of retailers and channels
Dairy executives recognize that shifts toward e-commerce may endure, and they are investing accordingly. Despite concerns over smaller margins, 67 percent of CEOs report they are investing in e-commerce. Examples include taking steps to strengthen their partnerships with retailers to better coordinate online marketing, investing in online platforms, and innovating packaging for optimal last-mile delivery.
Finding new ways to use technology
Technology and digital and analytics enable dairy executives to make improvements in important areas such as supply and demand planning, operational efficiencies, and customer engagement and insights. In fact, two-thirds of surveyed executives report using robotics and automation to reduce manual work in plants. In addition, 30 percent of respondents report using predictive analytics for forecast-based planning, and 34 percent use technologies that address end-to-end value-chain visibility, planning, and control (Exhibit 2).
But CEOs believe more can be done: only 2 percent reported having “very strong” digital and analytics capabilities, and only 16 percent believe they are optimally and regularly processing data to generate meaningful insights.
As a result, 80 percent of CEOs report that they plan to deploy new digital and data-analytics tools within the next one to two years, mainly focusing on manufacturing and logistics. In addition, 63 percent of executives report plans to invest in marketing and sales, implying a desire to prioritize strengthening consumer-insight capabilities (Exhibit 3).
What is most important to US dairy CEOs?
During one-on-one interviews, we posed questions aimed at uncovering the key themes on the minds of dairy executives. As in 2019, themes that are top of mind consistently include risk and volatility, consumer insights, and evolving behavior (especially of millennials). The difference in 2020 was an overall sense of optimism and a shift toward embracing ideas previously perceived as threats, such as an increased focus on the environment. For instance, some dairy companies are embracing the consumer and market interest in the environment by pursuing initiatives such as regenerative agriculture programs.2
What keeps dairy executives up at night
- Health and safety. Consistent with prior years, food safety is top of mind for executives. Furthermore, at the end of 2020, executives cited employee health and safety as a number-one concern, driven in part by COVID-19.
- Risk and volatility. Executives are concerned about volatility and the big unknowns regarding financial and regulatory pressures, especially given a new US political administration.3
- Changing consumer preferences. Consistent with their reported decreasing confidence in understanding consumers, CEOs say they are concerned about keeping pace with frequently shifting consumer preferences.
What dairy executives are most excited about
- Innovation. Despite the pandemic-driven return to basics, executives anticipate gearing back up to diversify their portfolios.
- Renewed consumer focus on dairy. Buoyed by the return of dairy during the crisis, executives hope to see a sustained interest across categories. They are especially optimistic about health- and wellness-centric products.
- Missions. CEOs are increasingly focused on social-welfare initiatives, especially around environmental sustainability. Company culture and identity also emerged as more critical today, given disconnected work environments and the importance of keeping employees engaged.
Dairy CEOs appear energized and prepared to lead the industry toward a customer-centric postpandemic future.
Paving the path ahead
Here are a few important takeaways from the pandemic for dairy executives:
Expand the talent pool and ways of working
Where remote work is possible, dairy executives should consider seeking talent beyond traditional geographic constraints. Employers can assess the degree of in-person interaction necessary for a non-factory-based role, for instance, to decide whether the person in that position could work remotely. Several high-tech companies are leading the way by offering to remove the requirement for workers to show up on-site.
Embrace a One Health approach
A One Health approach encourages cross-sectoral and cross-disciplinary collaboration at local, regional, national, and global levels to support the health of humans, animals, and the environment. To advance this goal, executives could pursue two actions:
- Identify evidence-based positions on dairy’s role in public health
- Build cross-sectoral, public health–focused partnerships—for example, with other animal-derived food-industry groups, public health institutions, and academia—to address priorities such as environmental sustainability, health and wellness, food security, food safety, and antimicrobial resistance
Establish flexible supply chains
The year 2020 proved the value of resilient and flexible supply chains for companies that had made the efforts to build them. The next phase will couple active monitoring of the supply chain to anticipate disruption with the implementation of flexible formulas—for example, the ability to produce with different components offering similar functions.
Dairy executives are optimistic about the future of their industry, but they have to translate that optimism into action. Regardless of company type, size, or complexity, future success depends on their ability to achieve clarity on strategic priorities—as well as on the systems to support agile execution.
Milk consumption is down 42% from what it was a half-century ago — from 247 pounds per person in 1975 to just 144 pounds today, and that has put a squeeze on dairy farms. There are about half as many dairy farms as there were in 2003, a loss of more than 38,000 licensed operations.
But those that remain are finding ways to adapt.
A decline in sales forced Tom Murray to shut down milk production at his dairy farm in 2019. “If we could make money, we’d still be doing it,” Murray told CBS News’ Michelle Miller.
Murray had to sell off his prized heifers, including the descendants of his best, Lucinda. She set the world’s milk production record in 1997 by producing 21 gallons a day, compared to the average of about 14 gallons, he said.
“We had good cows, so to make that decision was very personal but also very needed for economic stability of this property,” said Murray.
“When we’re competing against the Walmarts and the Lowes of this world, on this size scale, we just don’t cut it. We just don’t have that scale of efficiency.”
While dairy is on the decline, cheese consumption has nearly doubled over the last four decades. New York, where Murray’s farm is located, is already among the nation’s top producers and ranks No. 1 in yogurt, cottage cheese and sour cream production.
So, Murray switched his focus from milk to cheese. He owns the Muranda Cheese Company, which he has continued to expand with live music and tasting events.
“We’re trying to create a market to make our own cheese and create a destination here in the Finger Lakes. It just happens to go good with all the craft beverage facilities that are already here,” said Murray.
That’s one approach. Doug Young has another.
Young went big, increasing the number of cows at Spruce Haven Farms from 120 to 2,000.
“You have to have high levels of production, production per cow and per farm and then you can spread the cost of expertise. There are so many areas of expertise in dairy that there’s no way one person can be good at all of them,” Young said.
“Whoever’s responsible for breeding the cows or feeding the cows or taking care of sick cows, they have to be so good at it, they have to be as good as a veterinarian,” he said.
Young also joined forces with his neighbors, including Kevin Ellis, a former investment banker-turned-milkman. Ellis heads Cayuga Milk Ingredients — a co-op of 30 farmers, including Young, who banded together 13 years ago to figure out their future.
“The farmers in this region were shipping their milk as far as New York City, close to Boston, down into southern New Jersey to find milk markets,” Ellis said. “Ten percent of their gross income was going to transportation costs. That did not seem to be sustainable, so we started to envision building a plant locally to shorten the haul distance.”
That plant also helped farmers erase the middleman. They process and market their own products, and also handle research and development.
One of the solutions they found was dehydrating milk into powder to lessen its weight, which made it highly profitable.
“To give you an idea, it was costing $2.50 a hundredweight to get product to New York City. When we took the water out, we can move that same product to Shanghai for $0.67,” said Ellis.
Young’s sons, Luke and Dustin, have turned their focus on manure digestion — using manure to create power. A process they use to break down manure produces just over 500 kilowatts an hour, according to Dustin. That powers their farm and about two farms that are the same size, he said.
It accounts for a utility savings of $250,000 a year for the 4,000-acre farm — a significant reduction in the farm’s carbon footprint, which they hope one day will be net zero. Dustin said he believes this process is catching on.
“The technology is getting to a point where it makes sense for people to do,” he said. “It’s easy to do something like this when you are not carrying the entirety of the risk.”
Frank Konyn figures there are about 150 breweries within a reasonable drive from his dairy farm in the County of San Diego, Calif.
He frequents 19 of them but it has nothing to do with grabbing a cold one after a long day of milking cows. Instead, he makes weekly stops to pick up something the brewers no longer want: spent grains that remain from creating some of the area’s trendiest microbrews.
On an average week, Konyn collects about 225 tons of the grain that serves as protein-rich feed for his nearly 900 milking cows. He has plenty left over for a nearby dairy farmer’s herd.
Konyn began hauling the unwanted byproduct in 2009 with a pickup truck. Today, he owns five semi-trucks and 40 “roll-off” containers that are 18 feet long and are left at each brewery to be filled.
“The brewers know their waste stream is being upcycled and not contributing to filling up landfills,” Konyn said. “We’ve taken care of their headaches and created a win-win situation. It makes them proud and gives them a story they can tell.”
The more than 31,000 dairy farm families in the U.S. also have a story to tell, and the timing couldn’t be better to share it. Climate change is top of mind for consumers and is especially high on the radar of younger generations. A YPulse Sustainability Report of Gen Z and Millennial audiences (13- to 39-year-olds) finds two in five young people worry about climate change every week.
They expect industries to do the right thing for the planet. The good news is dairy farmers have been caring for the environment long before the term sustainable hit the mainstream. Though there’s still work that needs to be done, farmers haven’t always talked about the progress they have already made.
Frank Mitloehner of University of California, Davis, works with dairy farmers to maximize on-farm efficiencies.
But Frank Mitloehner, Ph.D., a professor and air quality specialist at University of California, Davis who has worked closely with dairy farmers across the country, will happily do so on their behalf.
“We have seen changes in the U.S. dairy industry that are astounding,” Mitloehner said. “They are the envy of the world, but for whatever reason they are painfully quiet about it.”
Citing Environmental Protection Agency (EPA) data that helps put to rest the idea dairy and other aspects of animal agriculture are major greenhouse gas (GHG) emitters, Mitloehner said there are three sectors that produce nearly 80% of all GHG emissions in the U.S.: transportation, power production and industries.
According to Mitloehner, The EPA found all species of livestock, including the feed sector, produce only 4% of all greenhouse gases.
“But there are people out there who will claim there is nothing worse and more environmentally detrimental than the livestock sector,” he said. “That clearly is not supported by fact, it’s not supported by science.”
Cows: The Original Recyclers
Juan Tricarico, Ph.D., vice president of sustainability research at Dairy Management Inc., an organization that grows sales and trust on behalf of U.S. dairy farmers and importers, says the nation’s 9 million lactating dairy cows play a starring role in dairy’s environmental success.
Tricarico understands quite well what makes cows tick. He earned his doctorate degree in dairy cow nutrition, which has consumed his world for the last 25 years. That’s why he gets rather excited – borderline geeked out – when he speaks about a cow’s ability to take food humans can’t eat and convert it into something they can: milk.
Tricarico authored research that shows 80% of what dairy cows eat can’t be consumed by people. This includes byproducts such as those Konyn collects from microbreweries and others, such as almond hulls, cottonseeds, citrus pulp and peel, and corn grain remaining from the production of ethanol.
Tricarico describes the cow’s digestive system as “this amazing community of microbes that are an entire ecosystem inside the belly of the cow.” He says bacteria, archaea, fungi and protozoa work in a way that puts the cow in a class of its own when it comes to digesting abilities.
“The rumen ecosystem includes thousands of microbial species and is equivalent in its complexity to the tropical rain forest,” Tricarico says. “Dairy cows can eat fairly rough plant material, and they can eat a lot of it because they have a big rumen with the ability to digest it all.”
The cow, however, sometimes gets a bad rap. “Cow farts” are blamed as a primary cause of climate change, but Tricarico falls back on Biology 101 to offer clarity. When cows ingest feed, microbes ferment it in the rumen first.
“The microbial fermentation occurs closer to the mouth; therefore, the methane is primarily released from the mouth, not from the back end,” Tricarico says.
Mitloehner adds to Tricarico’s point with more methane facts. He said there are three main greenhouse gasses: carbon dioxide, methane and nitrous oxide that all differ in how they trap heat from solar radiation. But he said what isn’t talked about enough is that carbon dioxide has a lifespan of 1,000 years, while methane has a lifespan of 12 years.
“So that means any kind of carbon dioxide we put into the air through any of our activities is still there,” Mitloehner said. “Every day you drive your car, you are adding new CO2 to the atmosphere. That’s different from methane because while it’s also emitted, it’s also destroyed, and it’s destroyed at a very high rate through a process called oxidation.
“This is critical for animal agriculture because roughly the amount of methane being produced every year almost equals the amount of methane that is being destroyed every year globally and nationally.”
Cows are able to turn byproducts of human food production into milk, thanks to their unique digestive systems.
Measuring Dairy’s Environmental Impact
David Darr serves as senior vice president, chief strategy and sustainability officer at Dairy Farmers of America (DFA), the country’s largest cooperative with more than 13,000 dairy farmer members. Darr said a “lightbulb just kind of came on” following a life cycle assessment (LCA) the U.S. dairy industry conducted in 2008.
The LCA focused on fluid milk and showed the industry accounts for:
- less than 2% of total GHG emissions in the U.S.;
- 5.1% of water use;
- and 3.7% of U.S. farmland.
Meanwhile, on the farm, the environmental impact of producing a gallon of milk in 2017 shrunk significantly from 2007, requiring:
- 30% less water;
- 21% less land; and a
- 19% smaller carbon footprint.
Darr said the dairy LCA – the first in food agriculture at a national scale – allowed the dairy community to begin speaking about sustainability more quantitatively than qualitatively when talking about dairy sustainability.
“Historically, it was ‘We take care of cows because they take care of us’ and ‘We take care of the land so it’s around for the next generation’ but how do we measure that?” Darr said. “How do we validate that and communicate that? Normal farm practices [that have been done for years] evolved pretty quickly into ‘sustainability.’”
Yet even the smallest emissions can still have an impact on the climate. That’s why the U.S. dairy industry in 2020 announced its most pivotal and public commitment to the planet.
The Innovation Center for U.S. Dairy, an organization that works with leaders from across the dairy value chain to align on pre-competitive priorities, drive progress and advance a shared social responsibility platform, developed the 2050 Environmental Stewardship Goals. By 2050, U.S. dairy collectively commits to:
- Achieve GHG neutrality.*
- Optimize water use while maximizing recycling.
- Improve water quality through enhanced manure and nutrient management.
The Innovation Center – along with five other national dairy organizations – followed with the announcement of the Net Zero Initiative (NZI) as a key pathway on farm toward achieving the industry’s collective goals. Its aim is to create a world where dairy is a solution for today’s nutrition and environmental challenges. NZI will enable dairy to provide accessible and affordable nutrition while sequestering carbon and improving soil health through improved land use systems; reducing GHG emissions through feed management, manure management and energy efficiency; and generating renewable energy that can cleanly power vehicles, homes and businesses.
NZI can be a fit for all U.S. dairy farms, and some of the world’s most recognized brands have taken notice. Nestlé and Starbucks recently announced they are providing financial and technical support and expertise in helping famers find their path toward net zero.
Karen Scanlon, executive vice president of environmental stewardship for Dairy Management Inc., runs point on NZI and is excited the initiative will provide further proof that dairy is produced responsibly.
“We fully believe that all farmers – regardless of size or geography –– are already doing something that contributes to progress and will help our industry reach our environmental stewardship goals,” Scanlon said. “Dairy farmers’ values, progress and long-standing commitments are the reason we can set aggressive goals and be leaders in sustainably nourishing people and the planet.”
NZI will document farmers’ efforts, such as producing renewable energy from wind and solar, as well as anaerobic digestion. It also will track other energy-saving measures, such as LED lighting installed in barns or switching to high-efficiency refrigeration used to instantly chill milk at the farm. Practices in the fields, such as minimal disturbance tillage, cover cropping and buffer strips, are also ways farmers reduce their GHG emissions.
Different practices work for different farmers, so they can tailor what works for their region and climate.
Adapting Game-Changing Technologies
Some practices are pretty high-tech. Varcor may top the list.
Varcor was created by Peter Janicki of Sedron Technologies and gained attention when the Bill and Melinda Gates Foundation used a similar technology to process human waste into safe, drinkable water for developing nations.
It so happened Janicki’s wife has roots in the dairy community and conversations started about how this technology could be applied to the industry. That’s when Donald and Cheri De Jong, who own Natural Prairie Dairy Farms in Texas and Indiana, and another farmer met with a team of Janicki’s engineers to explore the possibilities.
Varcor offers more than a clean water solution for dairy farmers. Using a process called vapor recompression and distillation, cow manure that has been mixed with water from cleaning dairy barns is piped into the Varcor system where it reaches a near boiling point. It then is dried and scraped. The finished product is an odorless, concentrated nitrogen, phosphorus and potassium (NPK) fertilizer.
While the water runs clean, it has yet to be approved as safe by the Food and Drug Administration for human or animal consumption, but it finds a second life nourishing crops that are grown to feed the De Jong’s cows. The system also produces another byproduct: aqueous ammonia, which is high in nitrogen and can be injected into the ground as additional crop fertilizer.
Varcor ultimately would eliminate the need for manure storage lagoons on some dairy farms while greatly decreasing methane emissions. It also would reduce or eliminate tractors, dump trucks and fuel used for handling manure.
Cheri De Jong said she figures Varcor can produce up to 20 tons of NPK solids daily from the farm’s 3,000 cows in Indiana.
“This is a game-changer,” she says. “We’ve gotten more calls and e-mails about dairy farmers’ interest in this. They see opportunities out there, whether it’s Varcor or other technologies. They are looking at things differently because sustainability is the key to our future in dairy farming.”
Community Collaboration Turns Waste Into Energy
Washington dairy farmer Jim Werkhoven understands sustainable practices can change the course of business for the better. His family operates two dairies in the Cascade Valley town of Monroe, about 30 miles northeast of Seattle. The farms are at the confluence of the Skykomish and Snoqualmie rivers in a setting fit for Instagram. Werkhoven’s goal is to preserve the pretty picture by avoiding a potential manure runoff caused by the family’s 2,000 cows.
Jim Werkhoven’s digester in Washington converts his community’s waste into enough electricity for about 300 homes.
The rivers are sacred to the nearby Tulalip Indian tribe, which has used them as a source of drinking water and salmon harvesting for generations. About 20 years ago, conversations began regarding enhanced water protection measures supported by the Tulalip that would have a dramatic impact on management practices at Werkhoven’s farms. His family and other valley farmers became worried.
But instead of letting matters become heated, the farmers met with tribe leaders, a salmon recovery group and local officials.
“They educated us on some of the problems they have with salmon recovery, and we educated them on modern agriculture practices,” Werkhoven said. “We decided we need to figure out a way to do something collectively. Our values are not that dissimilar that we can’t work together.”
The group identified about 300 acres of state property where a prison farm once operated. A legislative act then deeded the land to the tribe with a provision it remains in agriculture. This led to the construction of a methane digester in 2008. Cow manure now leaves Werkhoven’s dairies and is fed into the digester along with waste from the Tulalip community. And, to borrow Werkhoven’s description, “gunky” material makes its way there from local businesses.
He said there is a “cottage industry” of people who collect remnants from fish processing plants and slaughterhouses as well as used cooking oil from restaurants’ deep fryers arrive by the semi load.
“It’s real ugly stuff,” Werkhoven says. “This is the stuff sewer plants hate and landfills struggle with because it’s liquid. Twenty-five years ago, it was going down the drain.”
But the digester’s microorganisms work their magic and convert about 22,000 gallons of the assembled waste daily into methane, which powers a 450-kilowatt generator. This produces enough electricity for about 300 homes.
“The digester has been successful, but honestly the biggest success is a good working relationship with the tribe,” Werkhoven said. “Things sometimes seem like they need to start with a fight in agriculture. In our experience it showed you’re going to be more productive if you work together. The tribe has been a super partner and being partners is a whole lot better than being enemies.”
Across the country, a digester project in Florida also is primed to make an environmental impact. Chevron U.S.A and Brightmark have partnered on projects that will produce renewable natural gas (RNG) from biomethane captured at dairy farms through anaerobic digesters. The raw biogas is processed before being injected into local, state or interstate pipelines. Many businesses depend on natural gas for cooking, steam production, water heating, power generation and other uses.
Larson Dairy in Okeechobee, Fla., became a partner with the project last fall. It’s expected to annually convert 230,000 tons of manure from 9,900 cows into RNG.
The patriarch of the family’s dairy, Louis “Red” Larson, was involved with discussions of the project but passed away at 96 before seeing the work finalized.
His grandson, Jacob, said one of his grandfather’s favorite sayings was “do the right thing.” Those words were echoed by Jacob during a groundbreaking ceremony at the dairy last November.
“The Larson family feels this is the right thing,” Jacob said. “It’s the right thing for our future, it’s the right thing for sustainability.”
Elsewhere, Vanguard Renewables, one of the country’s leading food waste recyclers, has partnered with Dairy Farmers of America, Unilever and Starbucks to form the Farm Powered Strategic Alliance. Its goal is to reduce food waste from manufacturing and the supply chain and repurpose unavoidable waste that cannot be eliminated into renewable energy via farm-based anaerobic digesters.
“Dairy is really demonstrating the goodness we can do,” DFA’s Darr said. “Some of the country’s largest brands and companies are coming to dairy and asking us how we can collaborate with them. They’re doing it because of the reputation and track record that dairy is establishing around how we believe we can be part of environmental solutions and how we’re willing to have a dialogue to see how we can go beyond what we know and be part of unique, cutting-edge projects.”
Education plays a role
Farmers, such as Michigan’s Annie Link, have grasped the importance of dialogues, especially with consumers who are a couple of generations or more removed from the farm and food production. This gap inspired her family to create the Dairy Discovery program, using their farm as a destination for field trips, camps or for anyone else interested in learning about modern agriculture practices.
The conversations begin with a history lesson. SwissLane Dairy Farms was founded by Link’s great-grandfather, Swiss immigrant Fredrick Oesch, 105 years ago. He no doubt chose the location because a creek runs along the backside of the farm’s 90 acres where his cows could grab a drink of cold water and continue crossing into a field to graze.
The cows no longer wade into the creek, which today provides more sentimental purposes for Link. It’s a Mother’s Day tradition for her husband, Jerry, to take her trout fishing there.
“He knows all the best spots,” Link says. Whatever they catch, Jerry cooks. A couple of years ago it was her best catch ever: an 18-inch brown trout.
Annie Link of SwissLane Dairy in Michigan started an education program for anyone interested in modern agriculture practices.
Fishing aside, having a dairy that close to the water comes with added expectations from a magnified public lens that the farm does all it can to preserve the water’s integrity.
That motivated the family to further show its commitment to the environment. One goal was to become verified through the Michigan Agriculture Environmental Assurance Program, a state-based tool to prevent or minimize agricultural pollution risks.
During the review process, the farm was told one of its barns was too close to a steep hill, increasing the potential for runoff to enter the creek should a torrential downpour occur. So, in 2007 the family constructed a modern barn built further from the creek. This earned the dairy its verification, and it later received similar acknowledgement for its cropping efforts.
SwissLane also partnered with the Coldwater River Watershed Council to conduct tests on the health of the water and its fish. The results showed high water quality and healthy fish – and no concern the farm and its cows were impacting its integrity.
“Maybe it’s because the dairy is here that we have healthy fish and clean water,” Link said. “I always ask kids on our tour if they think the creek was cleaner now or in 1915. They always say 1915, but we have the facts that it is a renowned trout creek and it’s cleaner now.”
Back in San Diego, Frank Konyn farms under an even brighter spotlight. San Diego is the eighth-largest U.S. city with 1.4 million residents. He said there was a time when the county had more than 200 dairies. Now, he’s one of two remaining.
It may be why he’s always gone above and beyond to be a good neighbor. Around 2007, he began placing a pile of manure near the front of his dairy where people could take what they wanted for their home gardens. A donation box sat nearby for them to leave a few bucks if they chose.
“You’d check the box once a week and say, ‘Holy smokes, someone left a $10 bill in there!’” Konyn says.
From those humble beginnings, Konyn, 48, has built a composting business that requires much more than a donation box. He partners with large landscaping companies to take their green waste and trimmings. It’s mixed with his cow manure and results in 27 composting products available in the marketplace.
“Once again, it’s a story of material that would have ended up in a landfill now being diverted and composted with cow manure,” Konyn said.
It begs the question: Is Konyn a dairy farmer first and environmental entrepreneur second or vice versa?
“It’s a great question,” he says. “The dairy is like the mothership with all of these satellites around it, but the satellites wouldn’t exist without the mothership. I have a vision of what this place will look like when I’m 65, and right now I’m just assembling the pieces of the puzzle.
“Hopefully when I’m 65 someone will say, ‘He put together a hell of a show and it’s a viable enterprise and he’s doing the right thing for the environment. Let’s hope it continues for the benefit of the citizens of San Diego.’”
*In October 2021, the wording of the goal was clarified to reflect the intent of the work and U.S. dairy’s commitment to reduce greenhouse gases, including methane, carbon dioxide and nitrous oxide.
U.S. Dairy Sustainability Awards
For the past 10 years, the Sustainability Award winners have a unique story to tell. But one thing is certain — their actions, both big and small, demonstrate that wholesome dairy products are produced responsibly. See how these pioneering dairy farms and businesses are advancing the industry’s commitment to healthy products, healthy communities and a healthy planet.