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Dairy Processors Weigh in on Sustainability of Farms

Panelists from Land O’Lakes, Hilmar Cheese, and others balance inherent farm sustainability against issues in economics, data collection, and the right kinds of incentives.

Panelists (from left) Sumeet Mathur, Josh Luth, Shaina Ashare, Michel Wattiaux (standing), Erica McDougall, Shane Reynolds, and Kyle Jensen discuss sustainability in the dairy industry during a discussion at CheeseExpo.
Panelists (from left) Sumeet Mathur, Josh Luth, Shaina Ashare, Michel Wattiaux (standing), Erica McDougall, Shane Reynolds, and Kyle Jensen discuss sustainability in the dairy industry during a discussion at CheeseExpo.
Aaron Hand

At this year’s CheeseExpo, an all-star cast of dairy processors got together to talk sustainability. One question that moderator Michel Wattiaux, professor of dairy systems management at the University of Wisconsin-Madison, asked all panelists to weigh in on was about whether the dairy farming communities that they’re working with are leaning into sustainability—seeing it as a win-win rather than a win-lose.

In many cases, the farmers are ahead of the processors in terms of the work they’ve been doing to protect their land, ensure the health of their animals, and provide a sustainable future in farming. But the panelists saw a variety of issues that need to be addressed, nonetheless.

“When you supply milk to Hilmar, you’re in the cheese and whey business. And we do like to share with our farmers…how we engage with our customers and what our customers are asking of us. So our dairy farmers are also aware of, from a customer demand, what’s coming down the pipeline,” said Kyle Jensen, vice president of global sales and marketing at Hilmar Cheese. “There is a level of engagement that exists inherently—whether it be food safety or quality or animal care, and certainly today, GHGs and sustainability. In many cases, the dairy farmers are already ahead of us.”

Though he feels that dairy farmers are already starting to lean into sustainability, there is more that can be done in terms of data collection, says Shane Reynolds, senior vice president of commercial operations for Milk Specialties Global. “I do think there is work for the processing and dairy industry as a whole to explain to dairy farmers why they should lean in harder—that this is a really good opportunity for them to take some power in terms of how they market their milk,” he said.

Land O’Lakes is seeing perspectives across the spectrum, according to Erica McDougall, sustainability manager – dairy foods, and Shaina Ashare, senior manager of member relations dairy – sustainability and member services. “We have many members who have leaned in and continue to lean in, and those first members have been doing things for generations,” McDougall said. “I think where we see some of the weariness is in measurement capabilities—making sure that we’re continuing to streamline things for our members and making sure that the paperwork burden is lessened. And also making sure that any sustainability projects we’re wanting to do in partnership, that it has a financial sustainability component as well.”

“No one’s more committed to making sure that that land lasts longer than our members,” Ashare says. In some cases, member farmers have been doing recommended practices for so long, that they’re not being incentivized to do so, so there is sometimes pushback because of that. But Land O’Lakes is trying to build out programs, bringing funding to the farms, to keep farmers from getting disillusioned. “If this is an area where investment is available, and they know that they can make improvements on the farm that make sense for them, then they’re going to participate.”

Processors and brand owners need to work with farmers to collect data so that there aren’t just the stories of what’s being done, but qualitative and quantitative data as well, noted Josh Luth, global sustainability lead at Schreiber Foods.

Another key concern, though, is that some programs incentivize farmers to undertake certain practices, but it’s not a long-term incentive. “They did the conservation work like no-till cover crops, did it for two years, and then they went back to their same practices,” Luth says. “So we have to make sure that these practices stay in place for the greater good.” He wants to figure out a way to make high-performing farms the champions to set the example for others and advance sustainability.

“We need to acknowledge that the farmers are inherently sustainably minded. Most of the European farmers have been doing this for generations. They’re not thinking about the next quarter or even the next year. They’re thinking about the next generation because the farm will be inherited by their children,” noted Sumeet Mathur, managing director of FrieslandCampina Consumer Dairy Americas, who gave the keynote address earlier in the day. “We have to see, in the last three to five years, what has happened in the life of a farmer, the economics of a farm and the very high inflation in the input prices. There is one thing that we almost don’t talk about much, which is the impact of interest rates. You know, the value of a loan that a farmer might be holding is a multiple of his or her income. The interest payments are severely high, and with what has happened to the interest rates, the cost burden on them has been really high. So their economics are on the edge, and the legislation is asking them to move way faster than their capacity to adapt.”

Wattiaux, as moderator, summed it up with a quote from a Canadian colleague: “You cannot be green if you’re in the red.”

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