Mining Milk, Digitizing Dairy, Monetizing Manure?

The 2021 Precision Dairy conference hosted by the University of Minnesota focused on innovation on the farm and in the words of one attendee ‘this conference challenged me, introduced me to new concepts.’ More importantly it highlighted how Dairy producers increasingly recognize that future revenue may go beyond the traditional focus of just looking at the price of milk. 

1. Mining your milk

Mining milk probably brings to mind the incredible array of molecules that have been discovered by separating milk; Lactoferrin, calcium rich compounds, special fats are now use as supplements for sports drinks and bars, for infant formula and supplements for the elderly.  However as cows are milked twice, three times or even more per day they also provide another way to mine the milk, for data.  Having specific information or metrics several times a day, which show animal health, the effectiveness of nutrition and the nutritional value of the milk produced for consumers is something no other livestock species can generate.  Why not do more with this data?  Mining dairy data could be used to improve fertility, reduce mastitis, eliminate antibiotic treatments.

Tech startups such as SomaDetect (progesterone), Labby (somatic cell counts), EIO (udder inflammation) and others have recognized this and use sensors to measure changes in milk in real time.   Dairy equipment leaders (DeLaval, Lely, Gea etc) mine milk for insights, availing of the opportunity provided by automated milking systems and robotic milking machines, and the information flows offering data unimagined before.

2. Digitizing Dairy

A few years ago, when dairy prices were at an all-time high, the phrase ‘milk is the new oil!’ was coined.  Perhaps the same person would now say ‘dairy data is the new oil’.  Over 50 IOT devices have been launched for cows- examples include cow fitbits, collars, rumen sensors, smart ear tags, environmental sensors and feed vehicle GPS trackers are providing a deluge of information.  Active in this field are SCR, Nedap, Cow Manager, Afimilk, EZFeed and more. Weather data provides another layer of information to consider. Smart camera’s such as those from startups like Cainthus are using artificial intelligence show producers what is happening on their farm, 24 hours a day (and night).  Such data appeals to food companies and consumer, in that it provides real information on animal welfare and environmental sustainability and armed with this they are willing to pay more for milk.  With so many new data measurements on the dairy, however, as the data flows on the farm producers may become awash in insights, and not always sure what to do with what they are getting.  The key to oil is to have way to trap it, refine it and bottle it for consumption.  This is also the key to dairy data, and while extremely valuable, but unless distilled that value cannot be captured.

Leading Dairydata platforms today include VAS Dairycomp, Vyla, Amelicor (DHI-Provo), MyDairydashboard.com, Dairy Data Warehouse, BoviSync but more new players are expected to enter this market. All aim to help put all a Dairy farms data in one place.

3. Money in Manure?

Methane is one of the most exciting and contentious discussions on large US dairy farms today.  It has become clear that with California’s new environmental legislation the opportunity for green energy has never been greater.  Producers who have already embraced this invested in their land in wind power and solar panels, but methane through manure represents an even greater value, both for its potential to remove a perceived pollutant, and for its energy value.   Challenges however remain.  87% of farm methane digestors haven’t been profitable, and without grants would never have been funded.  That is changing as innovation and multinational energy companies pump dollars into farm projects.   Will we see a situation where methane generates revenue and milk is a byproduct?  Perhaps not but at current prices operators such as the Dynamic Group who have built over 6 methane digestors with Midwest dairy farms suggest that methane can boost revenue per cow by 10-30%.

How can leading producer’s avail of these opportunities?  Conducting a strategic future-based review of the farm, identifying who within the current management team (maybe a son or daughter) who can head the projects or investments up, build a clear business plan, approach investors or other partners and implement the new farm business as a separate stand-alone entity.

This article is drawn on Aidan J. Connollys keynote speech at the recent Precision Dairy Conference held at by the University of Minnesota in June 2021.  Connolly is President of AgriTech Capital, North Carolina & CEO of Cainthus.