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0109 PD: 3 open minutes with David Pelzer & Richard Naczi

Published on 23 December 2008
Q. What is the level of consumer interest in sustainability or carbon footprinting?

PELZER: I would be the first one to say that we need to do more research in that area, but from what we’ve observed and our analysis of other research that’s been done, when you look at specific studies of consumer interest in sustainable products, there’s been a definite increase in interest. It’s not the majority of consumers by any means, but it definitely is a rising number of consumers.

Q. How did the sustainability initiative get started?

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PELZER: If the U.S. dairy industry was really going to be proactive in showing the world and the nation that we are serious about working to reduce our carbon footprint, we first determined we needed to have an investment in what our carbon footprint is and then identify some ways to be able to reduce that. So that our sustainability efforts didn’t just fall on dairy producers, we needed to get buy-in and then input and also solutions from across the whole dairy industry.

We got people together in Bentonville, Arkansas, back in June of 2008 to provide outside-the-box input. So not only did we have dairy producers there, not only did we have dairy processors there, but we also brought in a diversity of representatives, for example, retailers, non-governmental organizations (NGOs), and 4-H and FFA kids.

We’ve identified something like 27 possible projects that could be worked on throughout the dairy industry, not just on dairies alone.

Q. What are the goals of these sustainability projects?

PELZER: The principles are based on concepts brought forth in the book Triple Bottom Line by Andrew W. Savitz. Each initiative must be environmentally friendly, socially responsible and economically viable to be truly sustainable.

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So if you’re looking for that ‘sustainability sweet spot,’ a project must not only have a positive environmental impact but also make good business sense.

Q. So what’s happened since last year?

NACZI: We started with this major summit, and we had 27 possible initiatives coming out of that, and we’ve pared them down. We have 12 that are ready to go to the Dairy Innovation Center Board this January.

I’m a little cautious in my comments only because a number of these actual initiatives still have to be approved at the meeting before we can go forward with them.

Q. Which initiatives do you think will excite dairy producers the most?

NACZI: They’re excited about the idea that we can begin immediately with an energy audit and some savings right off the bat. Obviously going into harder financial times those savings are exciting. The idea of looking at ways to reduce methane from a cow is something we get a lot of attention from.

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We get a lot of people that are excited about looking at the technology but also looking at how the technology plays out in the consumer market. I think the “cow of the future” initiative gets a lot of excitement from dairy farmers.

Q. Who will fund these initiatives?

PELZER: Some of the projects will need to be funded by other entities in the industry. There’s not the intention that with all the proposed initiatives DMI will necessarily be the sole funder.

Q. What are you doing to define the carbon footprint of dairy products?

NACZI: We’re asking about 1,000 dairy farmers to fill out a survey in order to set the bar for where we are right now on greenhouse gas emissions. We’ve already had the processors do that work. We have a very strong representative sample of fluid milk processors, and cheese processors are now working up the details of their survey work.

But this is going to be a real critical piece of the initiatives because in order to define where we are right now, and to show progress, we need to get those numbers. We are hoping the survey will hit dairy farmers’ mailboxes in January. That will be landmark.

We haven’t really had a detailed dairy farmer carbon footprint before, and the good thing about it is once we define where the carbon is coming from we can make the initiatives more effective because we’ll know how to save it.

Q. When will the results of the surveys be available?

NACZI: We would like to get the data back anywhere between 6 to 8 weeks, if possible. We are hoping by early summer to have a fairly represented carbon footprint.

Q. And what are the next steps?

NACZI: If you look at recently released U.S. Department of Energy survey data, agriculture is No. 1 for nitrous oxide emissions and No. 2 for methane. So the understanding about emissions is clearly out there. Consumers understand that this is generated on-farm, so we are going to try to reduce that where possible.

At the same time, we are trying to balance this message with the fact that we have an extremely nutrient-rich product. Yes, we produce carbon, but we also produce a basis of nutrition and good food for the human population.

Q. What do you think the pundits of sustainability are most likely to say or do to try and derail your best-laid plans?

NACZI: Interestingly enough, we really haven’t had anybody who once they really understand the initiative try to derail it. We have had some really strong support. I would say probably what we have to deal with upfront when we start to talk about sustainability is some producers who still think that sustainability and environmental regulation are the same thing.

There is some pushback initially thinking this is just going to be a greater burden on dairy farms in some way. But I haven’t had anybody who once they have seen the way we are focusing these initiatives on the bottom line be that negative about it.

Q. How might the dairy industry be different 10 years from now because of the proposed sustainability initiatives?

PELZER: One is we are going to have a much better idea of our feeding regimens and the feeds that are most efficient, not only in what provides the best nutrients at the best cost for the animals, but also what best reduces their emissions. We think we know a lot, but we are going to know more.

Another will be more advanced manure management systems that are much more efficient in how they use and recycle manure. And then when we look at the profit centers, too, from a business model perspective, we are going to identify further profit centers for dairy producers.

So for example, could a dairy producer’s tag line be: ‘Producing wholesome milk and power for America’? We weren’t thinking like that as an industry even five or 10 years ago and that’s on the horizon now.

We’re talking about things like low-temperature pasteurization. That’s another thing that’s being looked at. When we produce milk, what happens with milk’s temperature? When warm milk comes out of the cow, we refrigerate it immediately, and then it goes into the plant.

There we raise the temperature and ultra-pasteurize it and then cool it back down. Think of all the times we are raising and lowering that temperature and all the energy that requires. What if you could be able to reduce those severe temperature swings and still have safe, wholesome milk? People are looking at those things, too.

Q. How would you answer a producer who says, "Green? Sustainable? These are buzzwords. Dairying has a heritage, and maybe we already do these things?”

PELZER: That’s true we can show a definite reduction in carbon emissions over the past 60 years (67 percent). The first point is dairy producers have already gotten into sustainability by doing things that just makes sense for them economically and using technologies wisely to increase production with fewer cows. Just that by itself really goes a long way towards reducing emissions.

In talking to consumers about sustainability, it’s not like we’re saying, “We’ve had a totally wasteful system up to this point, and we’ve got to change everything.” No, part of it has to do with highlighting and communicating to consumers the things dairy farmers are currently doing. Consumers are so much into the buzzword of recycling, and consumers can relate to it because so many of them in their kitchens are separating out paper, glass and plastic. Dairy farmers also recycle.

They recycle water and manure. A lot of farmers don’t think of it that way, but when you start asking them if they recycle and how they do it, they say, “Yeah, I guess I just never looked at it that way before, but we re-use things all the time." PD

David Pelzer
Sr. Vice President for DMI

Richard Naczi
Exec. VP of Strategic Insights and Evaluation for DMI

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