The dairy industry has been making steps toward more environmentally sustainable production well before it was a buzzword among consumers and with food marketers. While that has led to a number of important advances, the guests on the July 21 Hoard’s Dairyman DairyLivestream explained that environmental sustainability should also benefit a farm’s bottom line.
“It’s really important to look for ways to not just meet the standards but seek out any marketing advantages that there might be,” Cornell’s Chris Wolf advised. “Getting the story out there and getting it labeled appropriately and understanding and seeking any additional ways to get compensated for the environmental services is a really important aspect that we need to look at.”
To that end, Newtrient’s Jamie Vander Molen identified three emerging environmental service opportunities that farms should be aware of.
“The first being ecosystem services markets,” she explained. “There are a lot of solutions that your farm is doing or could do in the future to capture carbon and improve water quality. So how are we capturing that value through a market and capitalizing on that for farms?”
Ecosystem services markets are complicated and hard to navigate, but they offer a number of opportunities to incentivize environmental services.
“Another market space and opportunity that looks promising is for manure-based products,” she continued. “As we look ahead, we need to better identify as a dairy industry how we can both use nutrients more efficiently on the farm and create nutrients that are valuable and stable and can be transported and stored into markets off the farm.”
The third area of environmental farm services is the renewable natural gas space. This emerging market area relies on the regulatory and social encouragement of environmentally mindful driving practices and the low carbon fuel standard.
“Dairy-based or manure-based renewable natural gas generates some of the highest credit values under these programs because of their carbon intensity scores,” Vander Molen shared. “The message around this space today is that you are sitting on something that is incredibly valuable, which is why you see so many people, companies, and vendors entering this space.”
As environmental services evolve, farms need to be aware of the value of their products and by-products.
“At the end of the day at the farm level, you have to look for the opportunities that present themselves, but make sure you use a very sharp pencil when you’re considering the financial consequences of these different investments and prices,” Wolf concluded.
To watch the recording of the July 21 DairyLivestream, go to the link above. The program recording is now also available as an audio-only podcast on Apple Podcasts, Spotify, Google Podcasts, and downloadable off of the Hoard’s Dairyman website.
An ongoing series of events
The next broadcast of DairyLivestream will be on Wednesday, August 4 at 11 a.m. CDT. Each episode is designed for panelists to answer over 30 minutes of audience questions. If you haven’t joined a DairyLivestream broadcast yet, register here for free. Registering once registers you for all future events.