New FARM Initiative Advances Dairy Stewardship

Transcript

Alan Bjerga: Farm Environmental Stewardship Version 3. It's out, and it's a step forward for dairy. The National Dairy Farmers Assuring Responsible Management, AKA FARM Program, is a partnership between the National Milk Producers Federation and Dairy Management Inc. It helps ensure dairy's success by demonstrating US dairy farmer commitment to safe, high-quality, high-integrity milk. NMPF and FARM's Chief Sustainability Officer, Nicole Ayache, is with us to give us some highlights of ES-3 and explain the rollout, which began October 31. Thanks for joining us, Nicole.

Nicole Ayache: Thanks for having me, Alan.

Alan Bjerga: Let's start with what's actually in the update. What's new, and what can a dairy farmer get excited about?

Nicole Ayache: Yeah, we're pretty thrilled here, because we've spent a good probably about two years in earnest working on this. And the big update that we have in FARM ES Version 3 is that we've overhauled the engine that powers the FARM ES platform. So, we're now using a greenhouse gas model called the Ruminant Farm System Model, or RuFaS for short. And if you're going to try to Google that later, it's RuFaS, R-U-F-A-S.

This RuFaS model gives us updated science in our platform, and this upgrade to use a new model was done in response to farmer feedback we've gotten over the years. Farmers had been using FARM Environmental Stewardship for years. They would put in their data, get the results, and really just ask, "Okay, what's next? I have this greenhouse gas number, I have this CO2e per pounds of fat in protein-corrected milk. But if I wanted to reduce that, if I wanted to participate in some projects, how would I do it?"

With this RuFaS model, farmers can actually run scenarios to assess practice or technology changes, see how those would impact their greenhouse gas emissions, and any potential impact on milk productivity as well. So, really the scenarios, being able to project what-ifs is the biggest benefit of shifting the science.

And beyond the scenarios, there's also some optional sections that we didn't have before. So, in Version 3, if a farm is growing their own feeds, they can enter details about their own cropping practices and the sustainability practices that they're using instead of using regional averages, which is the only option we had before.

Alan Bjerga: Tell us more about the science. When you're talking about modern science, what does that mean? How is it incorporated into the V-3 evaluation?

Nicole Ayache: The RuFaS model is something called a "process-based model". And what that means is it models a whole farm system in the background, all of the biological, physical, and chemical cycles on the farm. That's different from any other greenhouse gas model out there for dairy farmers today, beyond FARM ES Version 3. And because it models that whole farm system and all of the cycles, that's what means we can run those scenarios, those what-if analyses I was talking about before.

RuFaS also incorporates, in all of the areas it touches, the latest available science. So, for enteric emissions, manure emissions, and more. That's thanks to the fact that there are all of the experts from across the country working on it that are really bringing their field of expertise to RuFaS. So, there are researchers from USDA Agricultural Research Service. There are those from Cornell University, UC Davis and others all contributing to this collaborative effort.

And there's a lot more to it than the process-based nature, than all of the different researchers. One thing that we really like about RuFaS is that it's built for the future. So, everyone when they came together thought through how to make it modular, how to build even the code to it so that when new science comes out down the road, it will be easy to integrate that new science into the model without having to redo the whole thing. So, it's really setting us up for success in the longterm.

Alan Bjerga: How do farmers participate in FARM ES, and how does the evaluation process work?

Nicole Ayache: FARM ES is open to any US dairy farmer. No matter size, geography, production style, anyone is welcome to participate. And typically a FARM Program evaluator from that farm's co-op or whoever they ship milk to usually is the one helping a farmer through it. So, collecting data, entering that data into our platform, getting the results.

So, often the best way to participate or to find out more about the program first is to ask your FARM Program evaluator. They can get you a little bit more information on how to participate. If a farm is interested in doing a self-assessment or wants to reach out to us directly, they're more than welcome to. They can email us at [email protected], and we can make sure we can get them access.

Alan Bjerga: Any farmer who participates in this program of course is wondering, "How does this benefit me? What does this do to improve an operation? How does it set someone up to succeed? Are there any financial benefits to this?"

Nicole Ayache: I like to think about the benefits of participation really in three buckets. The first is that license to operate, and that's what the FARM Program is built for overall, is: How do we provide those assurances to customers and consumers around the good work that we do? And we know that dairy has a great environmental story to tell, and FARM ES helps us tell that. We can aggregate data at a national level, at a co-op or a processor level to help prove that out.

The assessment and the results that you get also helps farmers with operational insights. What's good for business is often good for sustainability, too, and the ability to run scenarios really helps farmers gain some of those additional insights into potential areas for continued efficiency, for cost savings, really giving them another tool in the toolbox in their decision-making as a whole.

And then the third bucket I think of as a gateway to opportunity. You asked about the financial benefits that farmers could get. FARM ES itself isn't a carbon marketplace. There aren't any incentives from the FARM Program for participating. But we know that those carbon marketplaces are out there, those grant programs are out there, those incentive programs are out there.

Using FARM ES is essentially an unbiased tool to start to assess which of those programs might be a good fit for your farm. So, again, even though it's not that direct financial benefit from using the tool itself, it helps get access to those.

Alan Bjerga: Following on that, I want to throw a technical term at you, or at least something that gets a lot of discussion in sustainability, environmental governance circles, but may not be as common in the general discussion. That's Scope 3 reporting. It's important with this latest iteration of FARM ES, but talk a little bit about it. What's its significance? How does FARM ES Version 3 prepare the industry for it, and how can the industry use this tool to leverage our social responsibility to consumers?

Nicole Ayache: Yeah. Scope 3 reporting is a term I encounter every day maybe, at this point.

Alan Bjerga: Maybe you do, Nicole, but not everyone else. So, tell us what's going on.

Nicole Ayache: Okay. So, a company's greenhouse gas emissions, when they report it, when they account for it, it's divided into three categories. Scope 1, which is directly onsite natural gas, fuel use, anything like that. Scope 2, which is electricity or energy use. And then Scope 3, which is everything else.

So, for a downstream customer, that means like a Nestle, a Starbucks, a Unilever, their Scope 3 emissions are all of the emissions in their supply chain, all the emissions embedded in products, it's staff travel, it's end of life for packaging. It's everything. For a lot of food and beverage companies, Scope 3 emissions, a lot of it is what happens at the farm level.

So, when we talk about Scope 3 reporting, usually people are using it as a shorthand within the food and beverage space. They're using it as shorthand for agricultural emissions. So, farm-level emissions. And the importance of that is a lot of these companies have been doing Scope 3 reporting for a number of years, and the pressure is only increasing on them to do it.

There are regulations coming out of the EU that a lot of these companies are having to adhere to. In California there are regulations where certain companies are also going to have to start reporting Scope 3 emissions. So, they're looking at this very critically. They want robust data, they want good quality data, and really FARM ES is our opportunity since there's going to be Scope 3 reporting for dairy farm-level emissions for food and beverage companies no matter what.

FARM ES gives us that opportunity to give good quality data to really showcase the good work that dairy is doing, and the progress that we've made over the years and will continue to make when it comes to sustainability. Versus a lot of other sectors just use general emissions factors. They just use general average data that maybe hasn't changed for 10 years, and that doesn't let us showcase the good work that we're doing.

Alan Bjerga: This kind of lets dairy as an industry stay a step ahead.

Nicole Ayache: In many ways dairy is seen already as a leader within the agricultural space when it comes to sustainability, when it comes to having tools like FARM Environmental Stewardship to measure and showcase our progress.

Alan Bjerga: So, what other enhancements would be included in Version 3 in future years? Where is this going?

Nicole Ayache: We're looking at enhancements thanks to the RuFaS model growth over time, and then also other features. I think I mentioned earlier, the RuFaS model is built for the future. It's built with this idea. They're going to keep going and growing.

One of the exciting things they're looking at right now is adding an economic module to their system. What that'll mean is, once we integrate it in FARM ES, is if a farmer wants to when they're running a scenario, they can also do a partial budget analysis. So, they can start to see not just what's the impact on greenhouse gas emissions of a practice or a technology, but what might the cost implications or revenue benefits potentially be.

Beyond that, we're also looking at additional partnerships we can have with FARM ES. We know that it takes farmers a lot of time to collect data and put it into the system. What if they want to save themselves some time and send that data somewhere else, like a carbon marketplace or an inset marketplace? If they want to send that data to a different platform, we want to make it easier for them to do it. So, that's another thing that we're looking at in the coming years, is: How do we build those partnerships to make the tool even more useful for farmers, and continue to build it as this gateway to those financial opportunities?

Alan Bjerga: We've been speaking with Nicole Ayache, Chief Sustainability Officer for NMPF and the National Dairy Farm Program. Nicole, thank you so much for your time.

Nicole Ayache: Thanks for having me.

Alan Bjerga: And that's it for today's podcast. The Farm Program has a website with a ton of information on ES3. You can go to nationaldairyfarm.com and look under "Environmental Stewardship". Or if you have a question, write us at [email protected]. We'll get your question to the right person. For more of these podcasts, all you have to do is go to our website or go to Apple Podcasts, Spotify, and Amazon Music and search under the podcast name, "Dairy Defined". Thank you for joining us.