Resiliency in the dairy industry

Monday, September 27, 2021

Ontario dairy producers and stakeholders harness innovation amidst rising challenges.

By Jackie Clark

Dr. Christine Baes defines resiliency of a dairy cow as "the capacity of the animal to adapt rapidly to changing environmental conditions, without compromising its productivity, health or fertility, while becoming more resource-efficient and reducing its environmental burden."

Baes is an associate professor of animal biosciences at the University of Guelph, and lead investigator on a multi-year genomics project working to establish resiliency indicators for dairy breeding.

Her definition, however, could also be expanded to apply to the entire industry.

The ability of the dairy industry to continue to produce and succeed through rapidly emerging challenges is a testament to the resiliency of the cows, farmers and other professionals who make up the sector. Better Farming connects with stakeholders to discuss where that resiliency comes from, and what obstacles will test it in the near future.

"Dairy farmers are used to managing their lives and farm businesses through change and uncertainty. Over the last year, Dairy Farmers of Ontario (DFO) has focused on resiliency and strength to support them," says Cheryl Smith, CEO of DFO.

"When we talk about resiliency in the dairy industry, we mean protecting against market volatility, adjusting to stress, and always looking at the situation in front of you and figuring out how to adapt."

The cow & herd

Individual cow resiliency is largely rooted in genetics.

"In the past, production traits have been the main focus. Those are the non plus ultra of genetic improvement," Baes tells Better Farming. "We've done everything that we can to keep improving production traits."

Transitioning to focus on resiliency traits can add finesse to animal breeding, she explains. "It's clear that some of these traits are highly heritable and that they can really improve the bottom line."

The focus "is now resiliency because it means that you've still got all of the production, all of the economically clear traits that benefit farmers, but you're now incorporating some functional traits, health traits, efficiency traits, for an overall positive effect on the animal," she adds.

Basic production traits are easily measurable outcomes, like milk production. Resiliency traits such as fertility, calf health and feed efficiency can be more complex and harder to detect.

"We need a robust cow to deal well with the housing systems and the challenges that they're facing while still being productive," Baes says. Developing these new resiliency traits takes a lot of research, effort and funding, "but nobody's gotten ahead from standing still."

The genomics project led by Baes aims to introduce a new resiliency index by 2023.

In addition, "what we're striving for, but really hesitant to promise on, is the epigenetic analysis," she says. Epigenetics involves "a layer above the DNA that's actually turning the genes on and off."

DNA is static, "but depending on the environment that you're in, some of those genes might be turned on and some of those genes might be turned off," she explains. "We don't understand right now what genes get turned on and off and what environmental effects turn those genes on and off."

Epigenetics is "really at the heart of resiliency in the biological sense because your body is an incredible thing but if you're in the wrong environment, you won't be able to perform very well, despite the fact that you might have this awesome set of genes," she adds.

"We have to better understand how that feedback system works and how we can fine-tune both the genetics and the environment to make an optimal organism."

The benefits of improved dairy cow genetics go far beyond the individual cow.

"If you can make a more resilient animal, that's really good, but if you can make a more resilient herd, the cost benefit of that is multiplied," says Baes.

The farmer & business

More resilient dairy herds enhance the resiliency of the farm and industry.

"Through improving resiliency traits, you're ultimately improving the health and the welfare of the animals themselves, which, in the longer term, provides a better light to shine the industry in, and even more subtle than that is the effect on the farmer's mental health and welfare," Baes explains.

The mental health of producers is correlated with the health of their livestock, and success in business can reduce financial stress.

"On one hand you've got reduced costs to help the bottom line, and on the other hand you've got this more positive effect both on public perception and farmer health," says Baes.

What else makes for a resilient dairy farm?

Exceptional fertility management and high-quality forages "make a dairy farm a very good dairy farm," Rudi Spruit tells Better Farming. He milks 240 cows near Walkerton in Bruce County. Spruit has also noticed dairy farmers in Ontario becoming more creative with diverse on-farm income streams, including manure, biogas and grain drying enterprises.

"There are lots of (dairy farms) in the U.S. that have tried to find ways to turn a profit from better manure management or selling manure and have found ways to increase income from selling direct to consumer or trying to find ways to diversify their business," Spruit says. "That's the kind of unique stuff that's going to make dairy farms more resilient."

The trend is not necessarily innovation for the sake of it, but rather a response of forward-thinking business owners who see challenges in the future of the industry.

Spruit thinks innovative and diverse income strategies will soon be a requirement to be a profitable dairy farm. He thinks he may have a more pessimistic view than many other farmers, however it's difficult to find optimism when many aspects of the dairy industry are out of the produc-er's control.

Dairy supply management provides stability for many Canadian dairy farmers, but it also introduces certain challenges.

Dairy "is a quota commodity so the amount that (farmers) can sell is only as much as they're allowed and the price is set by the agency," says Dr. Andrew MacLeod.

MacLeod is a partner at Linwood Veterinary Services in southwestern Ontario. He specializes in dairy production medicine and reproduction.

Compared to other industries, dairy producers can't control price or quantity.

"At the same time, farmers do have a strong and stable income," MacLeod adds. "They have to be sure that they manage expenses because their income is somewhat fixed."

Challenges ahead

In Spruit's view, "the dairy industry isn't very resilient right now and it's approaching a turning point that could be very dangerous if we don't really work on it. I think there are some big challenges coming up," he says.

"Right now, I think the dairy industry is very over-leveraged and dairy farms have been trading for quite a bit of money – more money than they can come to make. Land is the same way."

Moving forward, "the biggest challenge we're going to face is cost control," Spruit says. "There's no real growth in the industry; there hasn't been for the last five years. I don't expect to see that in the next five or 10 years. But the costs have gone way up in the last five years, and especially the last 10."

Equipment servicing and maintenance costs have increased, and because of the Dairy Farmers of Canada's proAction program, "we've been forced to work with certain companies," he explains. "There's no negotiation about price either, so it doesn't seem like much, but all those little things add up."

ProAction provides standards that dairy farmers adhere to for milk quality, food safety, animal care, traceability, biosecurity and the environment. The program is necessary, says Spruit. But "as dairy farmers, we're losing a bit of control over the cost."

In other industries, cost can be managed by scaling up. However, in dairy "there's no outlook for real growth," he adds.

MacLeod agrees.

Emerging disease challenges like Salmonella dublin in calves, and less of a market for selling surplus cattle to export or home markets can add to financial strain, he explains.

"I think that one of the greatest obstacles to dairy farmers is financial. Costs are going up and end market doesn't change that dramatically," he says. "Farmers have had to find new ways to be efficient or find alternate incomes to the farm."

The breeding research underway at the University of Guelph aims to contribute to that efficiency.

"Animal health is always a cost to farms in terms of productivity loss, in terms of death loss, in terms of treatment cost, in terms of even paying me. All of those things represent a cost," says MacLeod.

So, "the best thing that we can do now is reduce our costs, produce the same amount of milk, have healthy animals and reduce the resources that we need to produce that milk," says Baes.

"Resiliency traits add some important considerations, and one of them is cost reduction, because with resilient animals you can still produce a lot, but your costs are reduced because you don't have treatment and labour," she explains. That cost reduction "can ultimately sum up to be more than the value of the production traits."

But will it be enough?

"I think before the end of my career, milk sales are going to become a break-even business," Spruit says. "I don't think that we're going to be able to make a profit just selling milk on the dairy farm. I think we're going to have to diversify or try and create value from other things happening on the farm."

Remaining resilient

When considering the future of dairy, government support through direct payments won't work, Spruit says.

"On our farm we don't make any investment decisions based on maybe getting payments one day."

Farmers need to continue to take advantage of technology, benchmark with neighbours, and set and track targets for themselves, he explains. But these are strategies that dairy producers have already been using for years.

"What we need is an industry that will grow. That's the part that's been given away and I don't think it's coming back, and I don't know how to solve that," Spruit says. "We need to find ways to continue to grow operations somehow."

Thus far, "the farms that have been most successful are always looking at what's coming," MacLeod says.

"They're watching the landscape ahead of them and looking for what's up and coming. They're also adopting technology; they're finding ways to become more efficient."

For example, MacLeod works with farmers on embryo transfer.

"We take embryos from superior cattle with production characteristics that we would look to multiply," he explains. This technique helps "accelerate the selection of economically viable characteristics."

In addition to adopting technology, "the other thing that I've found farmers lately becoming very adept at is, in the social media age, they communicate with each other. And by ‘each other' I mean worldwide," says MacLeod.

Dairy farmers from around the world connect online to brainstorm "solutions, answers and opportunities. Finding their own alternate ways to remedy a problem," he explains. When he arrives on a farm, often the farmer has already connected with others in the dairy community about the issue they are facing and has some ideas about how to address it.

In addition to connecting with each other, members of the dairy industry are becoming better than ever at connecting with consumers.

"They're the buyer, we have to meet their specs and standards," Spruit says. "The consumer wants a good, healthy product. We have to take comments about what we're doing seriously, especially consumer concerns."

The industry needs to "address those concerns in a quick and accurate manner," Spruit says. "The proAction program allows us to really do that in a smart way."

Dairy "farmers are very conscious and very aware, largely, of what the public knows or what they perceive," says MacLeod.

The recent "Buttergate" controversy and the dairy industry's quick response to assuage consumer complaints that butter does not soften at room temperature is an example of the commitment to a relationship built on trust and accountability.

"I really don't see what the dairy industry could have done to respond better to that," Spruit adds.

The COVID-19 pandemic has made consumers even more aware of locally sourced food, and many of them are looking to learn more about and support Ontario dairy, MacLeod says.

"The pandemic impacts will be lasting as we look to 2021 and beyond," Smith says. "For most consumers, this was the first time access to food and other consumer goods was in question. Food awareness will remain top of mind: where it comes from, the importance of ‘local,' increasing trust for farmers and agriculture, and a renewed focus on the role of nutrition in health.

"Industry collaboration will be critical for end-to-end supply chain management and economic sustainability, and those with food security issues will continue to need our help."

"Dairy farmers are becoming super-efficient managers and I think that trend will only continue," MacLeod says. "The people who are going to be successful are those who are able to manage in these challenging economic times."

However, that's difficult to do if you can't expand, Spruit says.

For now, Ontario's dairy farmers and researchers are communicating with the international dairy community, adopting technology, innovating operations, investigating epigenetics, and taking a diverse approach to increasing resiliency of cows, farms and the industry at large.

For DFO, "being resilient means operating in a state of continuous improvement so we can be ready for whatever challenges lay ahead," says Smith. BF