Environmental stewardship and sustainability are important factors in business today. Consumers and companies want to purchase products and work with entities that are lessening their impact on the environment.
Dairy farmers have long been stewards of the land. Data shows producing a gallon of milk in 2017 required 30% less water and 21% less land and had a 19% smaller carbon footprint than it did in 2007.
“This has been the story of dairy for many decades. We’ve been able to continue to be this steward of our environment and show tremendous productivity,” Mike McCloskey said.
“We need to continue down that trend ... but we also need to accelerate our process,” he added.
McCloskey, co-owner of Fair Oaks Farms in Indiana and CEO of Select Milk Producers, a large milk cooperative, has served as chairman of the Innovation Center for U.S. Dairy Environmental Stewardship Committee since it started in 2010.
This committee, comprised of farmers, cooperatives, processors, farm groups and advisers, recommended setting goals to make the U.S. dairy industry carbon neutral – or better – by the year 2050, while also optimizing water use and improving water quality. The Innovation Center collaborated with farmers, co-ops, processors and other stakeholders over the course of 18 months before setting these voluntary environmental stewardship goals.
“This is a serious commitment that people are making worldwide, and we, as a U.S. dairy industry, need to move forward with ours,” McCloskey said to participants of the Professional Dairy Producers (PDPW) Virtual Business Conference in March.
It is meant to be a collective effort. “Not every dairy will be able to do this some dairies will, and other dairies may do even better,” he said. Multi-million-dollar grants and investments are being sought to help advance this initiative.
Field to processing
The Net Zero Initiative, a multi-stakeholder effort to achieve carbon neutrality and water improvements, covers the field and farm. On the crop side, they are looking at carbon sequestration from practices like no-till, cover crops and crop rotations, as well as modeling the use of commercial fertilizer, manure and manure-based products.
At the dairy farm level, they are looking at enteric emissions and manure processing capabilities.
“We need to be able to evaluate technology on the farm,” he said. “We need to create ecosystem services, such as markets where we can trade nutrients, do a better job at our carbon trading and also do a better job on our energy trading.”
Processing plants are focusing on greenhouse gases and water usage. “Processors have been just excellent with recycling and reuse of water, and they’re getting even better,” McCloskey said. “They’re getting very good with their energy use within the plant.”
Farm-level changes
These goals are to be met with the adoption of economically viable technologies and practices. “We’re not going to do this at the expense of dairy farmers,” he said.
The last three or four years, the Innovation Center has focused on analysis and modeling and is initiating proof of concept work to see how technologies and practices work on farms of varying sizes, designs and geographies. This will continue for a few more years, and several land-grant universities are expected to be involved in conducting research on the projects. In addition, they are looking to create markets for carbon, nutrients and energy to help pay for the implementation of these technologies and practices.
“Once we are able to make this economically viable and move forward, then we can drive out for adoption,” he said.
There are a number of avenues they are pursuing to reach net zero at the farm. Specific feed additives approved in other parts of the world have shown to reduce belching by 30%. Optimizing rations has the potential of another 10% decrease in cattle emissions.
“Once we have these types of feed additives [approved in the U.S.], we’ll be able to show very rapidly a 40 percent decrease in greenhouse gas emissions from belching,” McCloskey said.
At the same time, cow productivity continues to increase. As milk production goes up and carbon stays the same (or becomes less), the amount of carbon per gallon will subsequently decrease.
Farms that convert from open manure storage to a digester will significantly decrease greenhouse gases in manure storage.
A step further is advanced nutrient management to extract nitrogen, phosphorus and potassium from the manure, resulting in aqueous ammonia, dried fertilizer products and dischargeable water. These transportable products can be sold further from the farm or be incorporated into farming systems in a way that can’t be done now.
“Once we have products that we can store and actually inject, instead of broadcast, we’ll be able to do practices like no-till and be able to start getting into sequestration of carbon through our farming practices and better utilization of all of these nutrients,” he said.
The lifecycle assessment completed in 2010 showed it takes 12.37 pounds of carbon to produce 1 gallon of milk. By incorporating these practices and technologies, McCloskey reported the initial modeling, conducted using a hypothetical Wisconsin dairy, suggests that number will be around -0.58 by 2050, if not sooner.
Financial example
Right now, larger dairies are more likely to adopt some of the more expensive technologies. By doing so, it will help drive down capital and operating costs, increase efficiencies and create markets for the products, all of which will help smaller dairies be able to adopt the technology in the future.
These advanced technologies are a big investment for any dairy to consider. To demonstrate how a 500-cow dairy could afford to make a number of these changes, McCloskey provided a roughly estimated breakdown of expenses and potential income.
He started with a $3.6 million investment for an anaerobic digester and nutrient separation technologies. He accounted for scale and priced it almost double the amount per cow a much larger farm would pay.
With financing, McCloskey arrived at an annual payment of $260,000 and then added in operating costs at $200,000 for a total annual expense of $460,000.
He begins to offset this with a $75,000 manure handling avoidance fee, which was calculated at 50 cents per hundredweight (cwt).
The adopted technology converts manure into storable and transportable materials. By selling the fertilizer products, electricity from the digester, aqueous ammonia and carbon credits, he finds $179,160 of income per year.
“Those are kind of real numbers that I believe are in the market today,” McCloskey said.
Next, he looked at opportunities within developing markets for nutrient trading, enteric carbon, farmland sequestration, tipping fees for substrates, investment tax credits, and Title 1 and Title 2 from the Farm Bill. These bring in an additional $359,880 for the farm.
The total revenue is $539,000, and the offset cost was $385,000, resulting in increased income of around $154,000 per year.
“So you’re looking at one dollar per cwt after taking away the biggest headache, at least that I have on my farms, which is manure management,” he said. “I’ve made it a profit center while at the same time I am now at net zero, and I am doing a great contribution to the environment and to our dairy industry.”
The U.S. dairy community is currently developing a full analysis detailing a strategy for reaching its 2050 carbon neutral goal with consideration for farm size and geography. Reaching net zero by 2050 is a big goal, but for the U.S. dairy industry, it is a matter of building more blocks on an already solid foundation of environmental stewardship.
