433
Rethinking the dairy supply chain: Innovative opportunities for creating value, efficiency and sustainability
In recent years, Consumer Packaged Goods (CPG) firms utilizing large volumes of dairy ingredients have ventured into new partnership models directly with dairy farms to address unmet needs relating to environmental sustainability, reducing market volatility, security of milk supply, improving the connectivity of consumers to dairy farms and to create opportunities to enhance the value of the overall dairy supply chain. In the spring of 2012, the first model of this kind was implemented between a large dairy farm in Northwestern Kansas and a leading dairy CPG firm. In order to supply the desired products to the partnering CPG firm, the milk produced is initially processed directly on the farm. Three products are produced from the process including heavy cream, condensed skim milk and water. By creating a direct-supply model between the dairy farm and CPG firm, multiple opportunities are created to reduce environmental impact and improve water conservation. By removing water through a condensing process of whole milk, transportation required to move cream and condensed skim milk is reduced by more than seventy-five percent. Approximately sixty thousand gallons of milk are produced per day and of that approximately forty thousand gallons of water are reclaimed for use on the farm. Western Kansas is an arid environment where water conservation is a critical component of the long-term sustainability of dairy production in the region. Water that is reclaimed is re-used initially for watering cows or cleaning before eventually being irrigated on crops grown for feed. Water availability is one of the leading factors limiting dairy growth in the Western United States. Direct-supply models with on-farm milk condensing are growing in interest as a means of improving long term sustainability of dairy production in arid environments, improving efficiency of the dairy supply chain and creating opportunities for enhancing value for dairy farmers, CPG firms and consumers.
Keywords: sustainability, water, dairy, milk