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Keeping up with the Kiwis

PD Editor Walt Cooley Published on 30 June 2010

After reading Ben Yale’s commentary from this issue, I googled the music video he mentions. It is highly entertaining. I recommend viewing it.

While taking short breaks to watch a World Cup match, I’m writing this editorial just after midnight in New Zealand. Sponsored by New Zealand Trade and Enterprise , I’m here visiting Kiwi dairy producers, learning about their low-cost grass-based system and technologies they have employed to remain globally competitive. I have been anticipating this visit. It hasn’t disappointed.

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As I’ve heard during the visit, the New Zealand dairy industry knows just how much their customers – most of them international – are willing to pay for their exported dairy products. Providing them a product at a comfortable price, they say, has driven innovation.

Viewing these technologies, I see some of the areas where the U.S. dairy industry often makes simple tasks more complex than they need to be. Here’s one example of how the Kiwis and their nation’s nearly monopolistic co-op, Fonterra , have made milk pick-up more automatic and simple.

Each night Fonterra plans the next day’s milk routes for the entire country. Routes are not scheduled more than 12 hours in advance and hardly ever is one 12-hour milk route the same as the next. Fonterra schedulers use milk weights captured from the previous three days (more on how this is possible in a second) to estimate how much milk will be available for pick up at farms on the next shift. Schedulers then coordinate the current pick up of 500,000 gallons of milk per shift, as many as 18.5 million gallons of milk during peak flush in October.

When the co-op’s milk truck drivers (no independent contractors are used) start up their truck for a shift, the truck logs them into a touch-screen computer in the cab. The computer downloads the scheduled pick-up route. The shift begins.

Trucks are equipped with GPS navigation and relay equipment. Dispatchers know at least every three minutes how much of a driver’s schedule has been completed, even where on the road the driver is. Before the milk hauler enters the farm gate, the truck’s computer can alert him of any special driving instructions, such as a wider than usual right turn or directions for finding the farm’s vertical milk silo. Each silo is equipped with a hockey puck-size RFID reader that attaches to the truck’s milk hose.

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After attached to the hose, the reader identifies that the driver is at the right farm. It starts the truck’s independent milk pump automatically – remotely. While being pumped, the truck, again automatically, takes an in-line milk sample and reads the farm’s identification to an RFID magnet on the bottom of a plastic test tube containing the sample. Within 20 minutes the average dairy farm’s milk silo, holding a 366-cow herd’s milking, is unloaded. The truck will then calculate the current milk pick-up weight, download the farm’s milk quality test results from the previous day and print out a receipt of both, which the driver leaves at the farm.

Driving away, the truck relays back to dispatchers the weight of milk picked up and the available storage room left in the truck’s tank and trailer. Dispatchers monitor an entire shift and can redirect less-than-full trucks to farms that had too much milk to be picked up by the originally scheduled truck. The average route includes six stops.

Unloading an entire tanker, 48 tons, at the plant takes less than 10 minutes. Shift over. Rinse (again in less than 10 minutes). Repeat.

For comparison, merely picking up and recording milk weights in the U.S. for the same farm could take over an hour. Why does any of it matter? Fonterra says the efficiencies in milk pick-up take costs for both trucks (capital) and drivers (human resources) off the balance sheet. Officials say they pocket a bit of the savings for share-holders and pass on the rest to customers, driving up satisfaction and sales.

This was just a glimpse of how our global competitors are making things more efficient and simple. More insights will follow in future issues. What can we make more simple within the U.S. dairy industry to keep up? PD

  • Walt Cooley

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