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

Transcription

1 2011 U.S. Dairy Sustainability Report Executive Summary U.S. DAIRY SUSTAINABILITY COMMITMENT

2 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) $10M $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 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

3 Our Approach The Innovation Center is leading sustainability efforts in four key areas: research, goals, innovation projects, and measurement and reporting 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 Processing and Packaging LCA Completed in 2011; findings to be released in 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 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 BILLION POUNDS OF MILK 1,200 DAIRY PLANTS PRODUCED A VARIETY OF DAIRY PRODUCTS AMERICANS SPENT ~6% OF THEIR FOOD BUDGETS ON DAIRY

4 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 agricultural systems improvements cows (enteric), manure, energy use biodiversity, land use, air quality feed efficiency, manure management, energy efficiency energy use new technology energy use, materials fuel use, refrigerants energy use, refrigerants unused/ expired products packaging materials waste to landfill waste to landfill sustainable materials fuel efficiency, fuel type, driver habits 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.

5 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 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.