Dairy Industry Goals: GHG Neutrality and Water Management

Reza Afshar:

These conservation practices can offer numerous benefits to the system, but the implementation is not always easy and straightforward.

Michael Torrance:

Welcome to Sustainability Leaders. I'm Michael Torrance, chief sustainability officer at BMO. On this show, we will talk with leading sustainability practitioners from the corporate, investor, academic, and NGO communities to explore how this rapidly evolving field of sustainability is impacting global investment business practices and our world.

Disclosure:

The views expressed here are those of the participants and not those of Bank of Montreal, its affiliates, or subsidiaries.

Alma Cortés Selva:

Welcome back to another episode. I am Alma Cortés Selva, I'm a senior advisor at the BMO Climate Institute. In today's Sustainability Leaders episode, we will be talking about the research work from Dairy Management Incorporated, or DMI, and the implementation efforts that enable progress towards the dairy industry at 2050 environmental goals. We're joined today by two very special guests, Dr. Reza Afshar, the VP of Soil, Feed, and Water Research at Dairy Management, and then Ms. Bridgett Hilshey, sustainable agriculture project manager.

Welcome to the show, Reza and Bridget. Thank you for being here and sharing the work of DMI. If you don't mind starting the show by introducing what DMI is and then the many areas of focus. Thank you so much.

Bridgett Hilshey:

Thanks, Alma. So, Dairy Management Incorporated, or DMI, is the U.S. dairy checkoff program. We basically work on behalf of the 28,000 dairy farmers in the United States to help increase sales and trust in dairy. Our work focuses on three key areas, research, education, and innovation, and all of our activities are overseen by the USDA and the farmers that fund our work as part of their milk check. DMI began in 1983, and farmers voted to start the program to help build sales and trust, and today it is mandatory for all farmers to contribute. Checkoff programs are common for agriculture, and they exist for many different crops and commodities like soy, cotton, pork, and even popcorn. We have a national office based out of Chicago with 16 regional offices all over the country.

Alma Cortés Selva:

Bridget, can you please give us the audience a little bit of the background on yourself and DMI's environmental work?

Bridgett Hilshey:

Sure thing. So, I lead DMI's Scaling Impact program, and throughout my career, I've worked with a variety of farmers around the country, primarily connecting them with resources, insights, and funding, and whatever they need to be successful with innovative sustainability practice implementation. Through this work, I gained a lot of really valuable insight into the nuances of conservation practice implementation and the complex network of consultants and organizations, and agencies that are available right now to support farmers. Now, through my work at DMI, I leverage this on-the-ground experience to develop education and implementation programs that are designed to empower farm advisors and ag stakeholders with tools, insights, and expertise necessary to support dairy farmer decision-making and practice implementation. Our team at DMI works to demonstrate that dairy can be an environmental solution. We feed the solution pipeline by conducting research aimed at discovering new technologies and conducting trials to validate on-farm practices.

We also develop planning and modeling tools that support farmer decision-making. Lastly, we work to educate and activate the dairy community as a whole. We recognize that in order to make meaningful progress, we need everyone, from the farmer to the agronomist, to the vet, to the co-op and the processor to the company selling the products, to be engaged in this initiative and support action. All of this work is to help farmers feel empowered to take action and address sustainability in ways that make sense for their farms. We know sustainability is not a one-size-fits-all path. Dairy farmers come at a wide diversity of sizes and configurations across all geographies in the U.S., each with its own unique challenges and opportunities. We are trying to meet farmers where they are and support them in whatever capacity they need.

Alma Cortés Selva:

Thanks, Bridgett. Since sustainability has a lot of angles when you're talking about environmental sustainability, what areas does DMI focus on?

Bridgett Hilshey:

Well, to provide a little bit of background, the U.S. dairy industry contributes about 2% of all U.S. greenhouse gas emissions. Of that, about three-quarters are derived from milk production, and about a quarter are associated with milk processing, distribution, transport, etc. So naturally, most of our focus is on helping the dairy farmers. To enable farmer action, we have projects looking at each part of the farm, from feed production to animal health to manure management. In general, our focus is to evaluate an innovative idea or technology and test its viability on a real working dairy farm. Our research team identifies topics that require further exploration and then works with companies and universities to test their efficacy. Technologies that have shown promise in a research setting are evaluated on real working dairy farms through our dairy scale for good initiative, and then through our scaling impact efforts, we partner with the supply chain to demonstrate projects that fund the implementation of proven solutions.

Not only are we looking at innovative solutions across all parts of the farm, from feed production to animal care and manure management, but we're also involved in all facets of the practice adoption pathway, from research to piloting to scaling. As mentioned above, we recognize that milk processing, packaging, and distribution also contribute to dairy's environmental footprint. Therefore, we also facilitate an industry-led group that is focused on identifying opportunities in dairy processing. Right now, over 30 companies are participating and to our processor working group. The group focuses on key environmental priorities for dairy processors, such as greenhouse gas emissions, water circularity, all with the goal of moving the needle toward the industry's 2050 goals.

Alma Cortés Selva:

Since you mentioned greenhouse gases emissions from the dairy industry, can you provide a specific examples of goals and the impacts that the programs from DMI have had on emissions reductions?

Bridgett Hilshey:

Sure, so we've worked across the dairy value chain to set goals to ensure dairy is seen as part of an environmental solution. In 2020, we set three goals for 2050. The first is greenhouse gas neutrality. This means that, collectively, we aim to be greenhouse gas neutral from farm to dairy processing. Depending on location and the type of farm or facility, this is going to look different. We also have two goals around water. First, we want to continue using water as efficiently as possible and maximizing recycling opportunities. Second, we want to improve water quality by improving the use of manure and nutrients on our farms and in our facilities. Our team continues to work to support and build a pathway to these 2050 goals, leveraging the most recent science and models. We'll report progress every five years, and our first progress report is coming out next year, in 2025. Dairy was actually the first agricultural group to set these kind of collective goals, and this has given us a really excellent platform to bring the industry together and to help build a sustainable future.

Alma Cortés Selva:

That's an impressive list of accomplishments and gearing towards neutrality in 2050. It's a major accomplishment. How does your team get all of this done? How many people are working on your team?

Bridgett Hilshey:

Well, I kind of think of us as a small but mighty team. We employ a partnership-centric model to address these barriers, advance research, and find these economically viable solutions for challenges that are faced by our farmers and processors. We partner with a lot of nonprofits, universities, and companies, and others to catalyze innovation and broaden the reach of new technologies and insights that are essential to a sustainable food system. And candidly, working with the dairy industry, there are so many opportunities to innovate. In many ways, dairy farmers are the original regenerative farmers. They manage a circular system on their farms by growing diverse forage crops like grasses and perennial legumes like alfalfa and silage corn that feed the cows to produce milk. In fact, up to 75% of the cow's diet is not even consumable by humans, and then the manure they produce is used to fertilize those same crops.

It's a circular system without a lot of waste. In addition, with the advent of biodigesters, farms can produce energy from manure while it's being stored. Even the water on a dairy is reused, on the average US dairy farm water is reused about four times. The water is used for watering the herds, cooling milk, and cleaning equipment before it's finally used to feed the crops. And this is the really wonderful thing that I love about working in dairy. It's a system that is so well suited to being regenerative and sustainable. U.S. dairy farmers have long been stewards of their land's natural resources. They're really passionate about continuous improvement and caring for the planet, their communities, and their animals. So our role is simply to enable and equip the industry with tools and resources it needs to take advantage of the resources it has.

Alma Cortés Selva:

Thank you so much. That's a very interesting perspective that farmers are the first ones that were doing regenerative sustainable agriculture. Switching gears a little bit and now jumping with resident research, dairy farmers certainly complex and it's great to learn what farmers have been doing in this space. Do you mind introducing yourself, Reza, and then telling us about the research that you and your team are leading at DMI?

Reza Afshar:

Sure, Alma. My name is Reza Afshar, and I serve as the vice president of soil, feed and water research at DMI. My background is in agronomy in sustainable crop production systems. Before joining DMI, I worked in academia and non-profit sector and had the privilege of working with a large number of farmers and learning about some of the challenges they face day-to-day. We have several ongoing projects, but today I'd like to talk about Dairy Soil and Water Regeneration project, or DSWR. As Bridgett highlighted, feed production offers a significant opportunity for enhancing sustainability on dairy farms. The carbon footprint associated with feed production and the large quantity of water that are being used for growing forage crops underscore the need for innovative solutions. Our early analysis suggests that modifying feed production practices alongside utilizing new manure-based product could offer environmental benefits compared to traditional practices. Inspired by these findings, DSWR was initiated in 2021.

DSWR is a larger-scale and long-term project in which we are assessing the impact of advanced soil health management practices, including cover cropping, conservation tillage, and new manure-based product, and the environmental footprint of dairy forage production. The project involves extensive data collection, including greenhouse gas emissions, soil carbon sequestration, water quality metrics, crop yield, and soil health indicators. Our field experiment established across four key regions of the country, which represent about 80% of the U.S. milk production. What truly sets DSWR apart is its collaborative nature. We are proud to partner with esteemed scientists from seven universities, as well as the USDA ARS and the Soil Health Institute. As I mentioned earlier, DSWR was started in 2021, and we'll run through 2028 and it's received a $10 million grant from the Foundation for Food and Agricultural Research, and the additional funding comes from DMI, Nutrien, Nestle, and Starbucks.

Alma Cortés Selva:

For DSWR, do you have some results that you can share with the audience so far?

Reza Afshar:

We are three years into this six-year project, and there is still much to discover. Although the data we have gathered so far doesn't allow us to draw any solid conclusions, we are beginning to observe some trends. For example, in the first year of the study, we observed the yield drag in the advanced soil health system compared to the business-as-usual scenario. In year '23, however, the yield gap between the two systems gradually decreased. This highlights the fact that it takes time to see the effect of management interventions on soil properties and crop responses, and building soil health actually is a long-term process. In other trends that we are observing at some of our research sites pertaining to greenhouse gas emissions, some of our research collaborators are observing lower greenhouse gas emissions in plot that were treated with a new manure-based product compared to liquid dairy manure. I should highlight that this observation is not consistent across all sites, and we cannot solely attribute the lower emissions to the manure source.

Other management factors, such as cover crops and tillage in this case, may also play a role. Therefore, it is critical for us to continue data collection. Once we have all necessary data, then we can analyze them using appropriate statistical methods. At that point, we can discuss project results with more confidence.

Alma Cortés Selva:

You mentioned several times data collection. Why is gathering data so important in the process, and then what are some of the challenges that you're seeing along the way?

Reza Afshar:

That's a good question, Alma. The fact is, majority of dairy farmers are considering these conservation practices, but relatively limited research has been done to measure the actual impact of these practices on greenhouse gas emissions or water quality in dairy systems. And farmers need quantifiable and valid data to help them make informed and science-backed decisions, decisions that make the most sense for them both financially and environmentally. To answer your question about some of the challenges we have in the process of data collection, I should start by saying that conducting research in natural environment has its own unique challenges, whether condition may not be cooperative and can delay field access and affect our timelines. We are also using some cutting-edge, high-tech scientific instruments in this project, and equipment breakdown can also affect our data collection. Plus, conducting research on active farms requires careful planning and communication with the cooperative farmer. Balancing their needs with our research goal is critical. We must be highly adaptable and flexible and establish great communication with the farmer in order to execute the project successfully.

Alma Cortés Selva:

Are you also experiencing challenges when you're implementing the practices, not just gathering the data?

Reza Afshar:

Well, these conservation practices can offer numerous benefits to the system, but the implementation is not always easy and straightforward. Cover crops, for example, are very beneficial tools, but sometimes it's challenging for farmers to include cover crops in their crop rotation. In arid regions, water shortages can be a barrier to adopting cover crops, and in colder climates, farmers may not have enough time to plant cover crops on time. Another example is no-till in general. No-till practices offer significant benefits to soil health, but occasional tillage may be needed or even necessary in certain situations. For example, some soil types are prone to compaction, and occasional tillage can be helpful to alleviate this problem. Additionally, not all farmers have the necessary equipment for successful, no-till production, and acquiring new machinery and equipment might be financially prohibitive. Lastly, there is a learning curve. It takes time for farmers to gain experience with these new practices and also for soil to adapt to new management systems. As a result, several seasons may pass before farmers observe benefit, from these conservation practices.

Alma Cortés Selva:

You bring really good points, Reza. The next question is for both of you, once you have all the data collected and then you analyze the results, you've talked that the next step is always reaching the dairy farmers. How do you do that? How do you ensure that it reaches the dairy farmers, which is your ultimate goal?

Reza Afshar:

We have developed a robust out tracing communication plan to ensure our results reach farmers effectively. Our university collaborators have extension programs and will disseminate the project findings directly to the farmers through various channels such as farm visits, workshops, and field days. Additionally, we will engage farmers by presenting project findings at conferences, seminars, and farmers meetings. To reach a broader audience, our results will also be published in the form of peer-reviewed publications, white papers, and trade journal articles. Furthermore, we are in the process of developing a website for DSWR, which is expected to be available sometime in mid-2024. This website will serve as a platform to share information about the project, the research team, and the findings as they become available.

Bridgett Hilshey:

Thanks, Reza. I'd love to build on that. So, in my role in the organization, I'm really looking to help address some of the practical challenges that farmers face implementing a lot of these practices or technology changes. And one of the things we've learned of the past couple of years is that there's a huge need for more education, technical assistance, and real boots-on-the-ground support. We're always looking for ways to make it easier for farmers to make informed decisions. And to that end, we're currently piloting this innovative new model, Dairy Conservation Connect, in Michigan, Indiana, and Ohio. And what this program does is it aims to bring resources to ag professionals and trusted farm advisors and help them navigate and understand dairy sustainability practices, the opportunities, and all the programs that are out there. Through Dairy Conservation Connect, we are funding an individual that's going to provide one-on-one guidance and small group trainings and support local ag professionals and organizations.

In addition, we're building out a big online resource library that's going to compile practical information about sustainability practices and their associated economic and environmental impacts. We're also building out a learning hub that's going to contain a lot of online courses, slide decks, handouts, all with the aim of trying to simplify these complex dairy sustainability topics. The big-picture goal is to empower trusted farm advisors and ag professionals to support dairy farmers in accelerating on-farm sustainability.

Alma Cortés Selva:

That sounds like a great way to reach farmers and make sure that they actually have the tools. In your experience when you're working with farmers, what are some of the barriers that you see to be able to implement some of the practices?

Bridgett Hilshey:

Well, economics continues to be a significant barrier for dairy farms looking to adopt environmentally beneficial practices. Some practices, not all, can have really substantial environmental benefits, but they require a lot of upfront investment from the farmers. The farmers not need to buy equipment or build infrastructure, or the practices can have a lot of maintenance or ongoing expenses. And sometimes the low profit margins that farmers have don't provide enough financial resources they need to support the adoption of these practices. Ultimately, for a farmer to adopt a practice or technology, it needs to make fiscal sense for their operation. So carbon markets, people have heard a lot about them. They show promise, but they're honestly still evolving. At present, there's a significant number of farmers that rely heavily on state and federal cost share programs to fund infrastructure investments, but the challenge lies in the complexity of these programs.

They're often difficult for farmers to comprehend. It's difficult to know if they're eligible, and many farmers don't feel confident navigating the application process. And so lately we're trying to simplify this process for farmers and improve their awareness of and access to the existing funding programs. And so, to that end, we developed resources and training materials that break down all the nuances of the many federal conservation programs that are out there. As part of the Dairy Conservation Connect program that I mentioned earlier, we are piloting a regional sustainability navigator role. So, in the same way that many states fund healthcare navigators to support individuals applying for and accessing healthcare programs, we're funding a regional sustainability navigator. And the navigator's role is to help farmers learn about these new carbon markets and incentive programs and grant opportunities and connect them with regional experts and help them access all the different educational materials and training resources, and then understand the complex verification, measurement, and modeling options that are out there.

Beyond demystifying current options, we're also actively collaborating with stakeholders, including cooperatives and companies, to try to create new funding opportunities that are specifically tailored toward the needs of dairymen. These programs, which often leverage larger federal grant programs, direct funds toward regional supply chain projects. Our team also works to build our own supply chain partnerships where the cost and benefits of the on-farm projects are shared with multiple players within the dairy supply chain. This has been a really successful way to encourage on-farm improvements and minimize the risk to farmers. And lastly, I just really want to touch on the uncertainty we're all facing. It's a major barrier right now for farmers in this space. Sustainability and the rules and standards, and protocols that surround it are all still evolving at lightning speed. And dairy farmers, they're long-term planners. They think about their business in terms of generations, they want to do the right thing, and if we all work together, I'm really confident that we can help them with the decisions and investments that are needed to meet the various goals and commitments that are out there.

Alma Cortés Selva:

You mentioned several resources for farmers that are listening in, and they would like some more information. What's the best way to connect and then to learn more?

Bridgett Hilshey:

Well, let me start out. I recommend that farmers utilize the Farm ES program to assess their environmental footprint. The Farm ES program was funded by Dairy Check Off, and it differs from the more familiar farm animal care program. It involves farmers sharing information about their manure management, herd size, and rations, and then the model estimates the farm greenhouse gas footprint. Farmers can compare their greenhouse gas footprint to other similar dairy farms in the region and nation. Additionally, the Farm ES website provides a lot of really valuable information about dairy environmental footprints. They're also launching a new tool this year to help dairy farmers identify all the different funding programs that are available to them in their states. Co-op field reps are usually available to assist farmers in completing the Farm ES assessment. For those that are interested in exploring different options and opportunities, we're also developing a tool that will provide some very basic information about the over 90 different sustainability practices that are out there right now and linked to various resources and tools that are available to support decision-making.

Farmers can also attend one of our Dairy Sustainability Alliance conferences. So many regional check-off organizations provide funding for farmers to attend, and it's a great way to learn more about industry initiatives and provides farmers a forum to engage with decision-makers. It's really important to emphasize that this initiative is really just getting started. Much of it is still in progress and development, which can be frustrating for those who are really eager to act. However, I encourage people to think of it as also an opportunity if you are open to sharing your story, if you're open to innovation, if you're interested in having research conducted on your farm. There's a lot of ways to position yourself as a leader right now and take advantage of some of these opportunities that are coming up through the pipeline.

Alma Cortés Selva:

Given the valuable work that DMI does and we learn today, are there ways that we can support the efforts of DMI?

Bridgett Hilshey:

Well, as I mentioned earlier, we do use a partnership-centric model, and our environmental goals are shared across the dairy community. We are always in need of new partners with shared interests or goals to help support our work and fill in the gaps. So if you're interested in learning more or joining the effort, please feel free to reach out to us at any time, and we'll talk about opportunities and happy to share the resources that we have.

Alma Cortés Selva:

And then finally, is there anything else that both of you would like to share with that audience as final thoughts?

Bridgett Hilshey:

Well, I guess my final thought is, if you're interested in getting involved and supporting all the different environmental projects within the dairy industry, or if you just have questions, please don't hesitate to reach out to our team. We're happy to share our knowledge and connect you with local resources.

Reza Afshar:

I agree. Thank you for having us, Alma. Our team is always here to discuss opportunities, and we look forward to working together.

Alma Cortés Selva:

Thank you so much for joining us for this episode and then sharing the progress of DMI and in farmer solutions to enable progress towards the dairy industry 2050s environmental goals, and we'll see you in the next episode. Thank you so much.

Michael Torrance:

Thanks for listening to Sustainability Leaders. This podcast is presented by BMO. You can find our show on Apple Podcasts, Spotify, or your favorite podcast player. Press the follow button. If you want to get notified when new episodes are published. We value your input, so please leave a rating review and any feedback that you might have, or visit us at bmo.com/sustainabilityleaders. Our show and resources are produced with support from BMO's Marketing Team and Puddle Creative. Until next time, thanks for listening, and have a great week.

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