2011 U.S. Dairy Sustainability Report Executive Summary

2011 U.S. Dairy Sustainability Report
Executive Summary
U.S. DAIRY SUSTAINABILITY
COMMITMENT

Welcome
Welcome to the 2011 U.S. Dairy Sustainability Report Executive
Summary, a condensed version of the full sustainability report,
which is available at USDairy.com/Sustainability/Report. This
report summarizes efforts led by the Innovation Center for U.S.
Dairy ® to support the industry’s sustainability commitment.
Taking the long view, we recognize that the dairy industry
must meet growing global food needs efficiently and
responsibly, while conserving the planet’s precious resources.
Accordingly, sustainability has become a key business strategy
for the industry and its future development.
Over the years, we have been addressing sustainability challenges and identifying
opportunities across the dairy value chain. Highlights of our 2011 efforts, which are
described further inside, include:
> Putting science into the hands of decision makers: Building upon life cycle assessment
(LCA) findings, we developed and tested a suite of tools that help dairy farms and
companies adopt beneficial and sustainable outcomes.
> Developing a measurement and reporting framework: We launched the Sustainability
Measurement and Reporting Framework for U.S. Dairy, an industrywide initiative to create
a standard framework for measuring and communicating the environmental, social and
economic aspects and impacts of the industry.
> Recognizing innovation excellence: We partnered with stakeholders to launch the U.S.
Dairy Sustainability Awards program, which recognizes efforts that deliver outstanding
benefit to business, community and the environment.
We are prepared and committed to build on the momentum we have established and look
forward to hearing your thoughts about our progress at InnovationCenter@USDairy.com.
Tom Gallagher
CEO, Innovation Center for U.S. Dairy
and Dairy Management Inc.
250
Stakeholder Participation
(number of formal participants)
834
Each year, an increasing number of stakeholders from
within and outside of the dairy industry contribute
time and expertise by serving as members of the
Sustainability Council (which added 22 new members
in 2011) and Innovation Center-led project teams
and working groups. We also benefit from working
with our key partners: Center for Advanced Energy
Studies, U.S. Department of Agriculture (USDA) and
World Wildlife Fund.
Sustainability
Vision
We commit to being
leaders in sustainability,
ensuring the health and
well-being of our planet,
communities, consumers
and the industry.
Larry Jensen
Chair, Innovation Center Board of Directors
and President, Leprino Foods Company
Supplemental Funding
(cash and in-kind contributions)
0
2008 2009 2010 2011 2008 2009 2010 2011
$10M
8
6
4
2
$1.45M
$8M
Funding from investors continues to augment farmer
support from the checkoff program. Supplemental
funding includes grants, awards, financial support
from key stakeholders and in-kind contributions
from formal stakeholder participation. 2011 funding
increased by 21 percent from 2010 and included $1.16
million from USDA’s Natural Resources Conservation
Service Conservation Innovation Grants.
Sustainability and Nutrition
Consumers increasingly expect that we not only produce
high-quality and great-tasting products at an affordable price,
but that we produce those products responsibly by protecting
natural resources and supporting communities. As such, the U.S.
dairy industry is taking a leading role in promoting sustainability
and providing consumers with the nutritious dairy products
they want in a way that makes our industry, the earth and its
people economically, environmentally and socially better — now
and for future generations.
“It’s hard to find
any other single
food that will give
you the levels of
nutrients you get
in dairy.”
Robert P. Heaney, MD
Professor of Medicine at
Creighton University School
of Medicine
What’s in this glass is at the heart of all we do.
Milk is a valuable source of essential nutrients that promote good health: calcium,
potassium, vitamins A, D and B12, protein, phosphorus, riboflavin, magnesium and zinc.
ENVIRONMENTAL
Innovations and efficiency
improvements have enabled
the industry to reduce the
environmental impact of a
gallon of milk.
SINCE 1944:
90% less cropland
76% less manure
65% less water
63% less carbon
We are continuously
improving through
partnerships,
research and
projects.
OUR FIRST
GOAL
25%
GREENHOUSE
GAS REDUCTION
FOR FLUID MILK
BY 2020
~25¢
LOW COST
PER SERVING
SOCIAL
A wholesome choice for a
healthy, active lifestyle, dairy
products taste great and
deliver essential nutrients.
HEALTH BENEFITS:
Bone health
Weight management
Exercise recovery
ECONOMIC
• Dairy products are affordable and readily available.
• Milk is the lowest-cost food source of dietary calcium.
• Adequate dairy consumption can lower risk of certain chronic
diseases, which has the potential to lower healthcare costs
by as much as $200 billion over a five-year period.
• Dairy farms support rural economies in all 50 states.
>90%
OF SCHOOLS PROVIDE
LOW-FAT AND/OR
NON-FAT MILK
Citations are provided in the full version of this report available at USDairy.com/Sustainability/Report.
18%
OF PROTEIN
IN AMERICAN
DIET IS
PROVIDED
BY DAIRY
PRODUCTS

Our Approach
The Innovation Center is leading sustainability efforts in four key areas: research, goals, innovation projects, and measurement and reporting.
2008 – 2009 2010 2011 2012 2013
BEGINNING WITH SCIENCE: LCA research helps us understand the industry’s environmental impacts and prioritize improvement efforts across the dairy value chain.
Greenhouse Gas (GHG) LCA for Fluid Milk – Completed in 2012; findings submitted for publication.
GHG Results: 17.6 lbs. of carbon dioxide equivalents (CO 2
e) per gallon of milk consumed.
Comprehensive LCA for Fluid Milk – Started with focus on water with ongoing study of land use, nutrient cycles and other impacts
On-farm water assessment completed in 2011; findings to be released in 2012.
Processing and Packaging LCA – Completed in 2011; findings to be released in 2012.
Comprehensive LCA for Cheese – Completed for Cheddar, mozzarella and natural
cheese in 2011; with initial GHG results released.
GHG Results: Lbs. CO 2
e per lb. of cheese consumed
Cheddar
8.7
Mozzarella
7.5
Natural Cheese
8.3
SETTING GOALS: We set voluntary industrywide goals and published a roadmap to achieve the first goal: reduce GHG emissions for fluid milk by 25 percent by 2020.
TRANSFORMING RESEARCH INTO RESULTS: Our GHG reduction projects aim to reduce GHG emissions by approximately 11 percent and deliver an estimated $238M in business value across the value chain.
MEASURING AND REPORTING: Research findings contribute to the development of an industrywide framework to measure and report sustainability performance.
CONTRIBUTION OF U.S. DAIRY INDUSTRY TO U.S. GHG EMISSIONS
U.S. GHG Emissions = 7,168 Tg CO 2
e
U.S. Dairy Industry: ~2%
The GHG LCA for Fluid Milk, in conjunction
with other studies, shows that dairy
contributes less than 2 percent of total
U.S. GHG emissions.
Sustainability Measurement and Reporting Framework for U.S. Dairy project launched.
Fall 2011–Summer 2012: Develop guiding principles; identify and define indicators
for initial topics:
Economic: local economic impacts
and product differentiation
Environmental: energy, GHG emissions,
water quantity and quality
Social: working conditions, animal care,
community contributions
Summer: public review of draft
guiding principles and environmental
indicators and metrics.
Winter: public review of social and
economic indicators; update principles
and Framework.
January: Submission of draft Framework
to Innovation Center Board for approval.
Topics for consideration after 2012:
Economic: value across the supply
chain, financials and others
Environmental: waste, biodiversity/
land use, crop production and others
Social: food safety, health and nutrition,
and others
As part of the Framework project, work is under way to identify indicators to measure and report on the social and economic dimensions of the dairy industry.
SOCIAL
The dairy industry is an integral part of our nation’s heritage: from the role that nutritious
dairy products play in our diet to the strong ties with our communities.
> Workforce: One of dairy’s strongest community ties lies in the approximately 900,000
jobs created by our industry. As such, we place a high value on workforce availability
and retention (an industry challenge), safety, training and employee benefits.
> Animal Care: In late 2010, the National Milk Producers Federation started the National
Dairy FARM Program: Farmers Assuring Responsible Management (FARM), a nationwide
verifiable program that addresses animal well-being. At year-end 2011, nearly half of the
nation’s milk supply came from participating producers.
> Community Contributions: Individually and collectively, companies across the industry
actively support charitable hunger relief and food aid efforts, and raise awareness
of healthy lifestyle choices that help combat issues such as malnutrition and obesity.
America’s dairy producers have pledged $250 million over five years to the Fuel Up to
Play 60 program to improve children’s health.
ECONOMIC
Dairy’s supply chain generates economic benefits at the local, regional and national levels
through employment, local tax revenues and purchases of products and services. Every
dollar spent locally by a dairy producer creates a multiplier effect of more than two and a
half times the original dollar spent.
> The United States is the largest producer of cow’s milk in the world, and dairy is the
fourth largest agricultural commodity in the U.S. Dairy’s on-farm revenues are $31.4
billion, contributing 10 percent of total receipts from sales of agricultural commodities.
> Farms and dairy processors operate throughout all 50 states.
9.1 MILLION COWS
ON MORE THAN
53,000 FARMS
PRODUCED
192.8 BILLION
POUNDS OF MILK
1,200
DAIRY PLANTS
PRODUCED A
VARIETY OF DAIRY
PRODUCTS
AMERICANS
SPENT ~6%
OF THEIR
FOOD BUDGETS
ON DAIRY

Dairy Value Chain: Impacts, Opportunities and 2011 Project Accomplishments
FEED PRODUCTION MILK PRODUCTION PROCESSING
PACKAGING
TRANSPORTATION/
DISTRIBUTION RETAIL CONSUMER
KEY ENVIRONMENTAL IMPACTS based on completed and ongoing LCA research
GHG EMISSIONS
key
sources
WATER QUANTITY &
QUALITY
ADDITIONAL ASPECTS
key topics
IMPROVEMENT OPPORTUNITIES
GHG REDUCTIONS
WATER MANAGEMENT
key approaches
fertilizer production,
energy use
biodiversity, land use
energy efficiency,
agricultural systems
improvements
cows (enteric),
manure, energy use
biodiversity, land use,
air quality
feed efficiency,
manure management,
energy efficiency
energy use
energy efficiency,
new technology
energy use,
materials
fuel use,
refrigerants
energy use,
refrigerants
unused/
expired
products
packaging materials waste to landfill waste to
landfill
energy efficiency,
sustainable materials
fuel efficiency, fuel
type, driver habits
energy efficiency,
waste reduction,
recycling
waste
reduction,
recycling
GHG REDUCTION PROJECTS: 2011 ACCOMPLISHMENTS
ON FARM
BEYOND THE FARM
Farm Smart TM
Development and beta test of the Farm
Smart toolkit to support dairy and crop
production management decision-making
Farm Energy Efficiency TM
Launch of online resource:
USDairy.com/SaveEnergy
310 energy audits conducted
Estimated GHGs reduced:
700 metric tons
Estimated energy cost savings:
$148,000
Cow of the Future TM
Publication of paper on research
priorities for reducing dairy cow
enteric emissions
Dairy Power TM /
Biogas Capture and Transport TM
15 anaerobic manure digesters
brought online in 2011 to produce
renewable biogas
Estimated GHGs destroyed:
1.2 million metric tons
Estimated GHGs avoided:
301,000 metric tons
Dairy Plant Smart TM
and Next Generation Cleaning TM
Development and beta test of two tools within
the Dairy Plant Smart toolkit to support energy
management in fluid milk pr ocessing plants
Processing and Packaging LCA TM
Study findings on processing and packaging
white and value-added milks and creamers
submitted for peer review to be published in 2012
Next Generation Processing: UV TM
Proposed inclusion of ultraviolet (UV) illumination
in Grade “A” Pasteurized Milk Ordinance as a
technology to adjunct pasteurization process and
lower energy usage
Dairy Fleet Smart TM
Development and beta test of Dairy Fleet Smart
tool to support fuel and cost reductions in milk
transport and distribution of dairy products
Learn more about each project at USDairy.com/Sustainability and in the 2011 U.S. Dairy Sustainability Report.

2012 U.S. Dairy Sustainability Award Recipients
In 2011, the Innovation Center launched the U.S. Dairy Sustainability Awards program
with award sponsors Elanco, U.S. Dairy Export Council ® and the Center for Advanced
Energy Studies/Idaho National Laboratory. The awards recognize efforts that advance the
sustainability of the dairy industry by delivering benefits to business, community and the
environment. Program supporters include World Wildlife Fund, USDA, MilkPEP and the Dairy
Research Institute. ®
We are honored to present the inaugural award recipients.
Elanco Award for Outstanding Dairy Farm Sustainability
Blue Spruce Farm | Bridport, Vermont
Holsum Dairies, LLC | Hilbert, Wisconsin
Werkhoven Dairy, Inc. | Monroe, Washington
U.S. Dairy Export Council Award for Outstanding Dairy Processing &
Manufacturing Sustainability
Darigold, Inc. | Seattle, Washington
Honorable Mention
Oakhurst Dairy | Portland, Maine
Center for Advanced Energy Studies/Idaho National Laboratory Award
for Outstanding Achievement in Energy
DF-AP, LLC | Gooding, Idaho
Brubaker Farms | Mount Joy, Pennsylvania
The Innovation Center for U.S. Dairy provides a forum for the dairy industry to work together precompetitively
to address barriers and opportunities to foster innovation and increase sales. The Innovation
Center aligns the collective resources of the U.S. dairy industry to offer consumers nutritious dairy
products and ingredients, and promote the health of people, communities, the planet and the industry.
The Innovation Center was founded through the farmer-funded dairy checkoff program in 2008.
For more information about the Innovation Center, visit USDairy.com.
For citations and references, and to view the full version of this report which follows the Global
Reporting Initiative Reporting Framework V3.1, visit USDairy.com/Sustainability/Report.
We welcome your feedback on this report at InnovationCenter@USDairy.com.
©2012, Innovation Center for U.S. Dairy. All rights reserved.