Big data is ready for the farm. But is the farm ready for big data?

Agriculture is the least digitized major industry in the United States, according to a recent study by the McKinsey Global Institute.  

Farmers sometimes struggle to see the benefits of new technologies. Some have been burned by investments that they feel did not deliver, making them reluctant to commit and invest again, according to Alltech chief innovation officer Aidan Connolly.

In Connolly’s view, however, agriculture, with its inefficiencies, offers greater opportunity for improvement than any other industry.

And there is recent evidence that the sector is now racing to catch up at a supercharged pace, spurring innovation that is virtually transforming farming.

However, as drones, sensors, artificial intelligence, autonomous vehicles, smartphones and high-speed mobile internet gather and analyze data, growers and producers are struggling to manage the resulting deluge of information.

Eighty-four percent of U.S. farmers who responded to a recent Stratus Ag Research (SAR) survey said they have high-tech equipment that captures reams of data from livestock, planting, harvesting or crop protection operations. Yet only 42 percent of them are actually transferring this information to a field data management software program for further analysis. 

Connolly has observed that technological solutions are sometimes over-engineered, capturing a lot of information that the purchaser doesn’t see as beneficial. He suggests that these technology companies would benefit by narrowing the focuses and applications of their innovations.

“Entrepreneurs are throwing out a lot of information and analysis and hoping some of it will stick, most of which doesn’t, and indeed it ends up distracting from the real value that they provide,” he said

Establishing that value creates an enormous frontier of opportunity.

For technological entrepreneurs like KEENAN, the Irish feed mixer manufacturer and Alltech acquisition, those circumstances invited a response: expansion into farm data analysis.

“We've been involved with the internet of things (IoT) since about 2011,” said Conan Condon, director of KEENAN’s InTouch. “At that stage, there wasn't much connectivity. There were about 12 million connected devices. Today, there are about 6.4 billion connected devices. So you can see the growth that has happened within six years.” 

Today, more than 2,000 livestock operations, ranging in size from tens to thousands of cows, use the InTouch system, a live review and support service that helps producers apply actionable intelligence to their operations, giving them the benefit of KEENAN’s access to data on more than 1.3 million monitored cows.

Data-gathering technology represents a profound departure from “the way it’s always been done.” John Fargher is a fifth-generation Australian livestock producer and the co-founder of AgriWebb, a late-stage startup producing farm and livestock management software.

“I identified the problem on our own family farm, which is a simple one: farmers and ranchers running their business off pencil and paper,” he said. “We can now track all the inputs and all the outputs across that business and then facilitate data-driven decisions.”

Who sees my farm’s data?

2016 saw investments in data-driven agriculture fall 39 percent from 2015, according to the SAR report.

“It plateaued for one reason: the inability of everybody to share data,” said Condon.

“We're very open to sharing data,” he continued. “Always have been and always will be. Too many people are holding onto what they think is their farm data, and the farmer is not benefitting from the sum of all data.”

Some farmers express concerns about the security of their information. How might companies and government officials exploit and profit from their data? Who gets to access it? Who owns it? Does having data somewhere in the cloud leave it vulnerable to attacks and misuse?

All these questions remain largely unanswered, even as the technology pushes ever forward. Yet Connolly believes it is essential that data clients “are willing to trade this level of privacy in return for gaining greater value from what they are using.”

“Certainly, individual farm data is first in importance, especially to make proper variable-rate decisions and to build data on individual fields,” said SAR survey project manager Krista Maclean. “Better long-term decisions, however, may come from incorporating aggregated data into the decision mix.”

Farmers responding to the SAR survey consider data specific to their farm more useful than aggregated data. But, as application of the technology evolves, observers are seeing room for both.

Aggregated data can predict weather, report the condition of soils and crops, and alert to the presence of pests on a sub-regional basis.

“However, if the data is to be truly actionable and valuable, we need to drill down to the farm level,” said Connolly. “There is no reason to dumb down our offering by trying to make it into something that is not specific to the decisions being taken on an acre-by-acre or even an inch-by-inch basis.”

He suggests machine vision technology as an example. The monitoring and analysis of cattle and pig behaviors, especially in large-scale operations, is challenging, but vital. Pig and cattle behavior can provide information about the barn environment, food and water adequacy, health, welfare and production efficiency. Imaging-based inspection and analysis can offer an automated, non-contact, non-stress and cost-effective option.

“It appears to be capable of generating a benefit of up to $300 per cow,” Connolly said. “It is inconceivable that a producer would not consider using this technology if they are competing with a neighbor who has a $300 benefit over them on a per cow basis.” 

Grape growers and winemakers are also gravitating to high-tech solutions, contracting with firms like the drone-based SkySquirrel of Halifax, Nova Scotia, to keep watch over their grapes using a unique disease detection technology.

“Grapevines infected with disease produce lower quality wines and can cost a winery up to $40,000 per hectare in lost profits,” said Emily Ennett, marketing and business development manager of SkySquirrel. “Our disease detection is 100 times more efficient and significantly more accurate and cost-effective than scouts on the ground.”

SkySquirrel also provides triple-calibrated “Vine Vigour” zone maps for fertilizer applications and to improve the aromatics of wines, drive homogeneity and optimize harvest segmentation.

Big data, from seed to salad

A key driver of farming’s embrace of digital technology is the depth of transparency enabled by data collection and analysis.

Increasingly, Connolly said, consumers — millennials, in particular — are demanding this traceability in their food, such as: where and how it was produced; its environmental footprint; and its benefits with respect to the welfare of animals and farm workers.

“With that in mind, I believe that these technologies allow farmers to connect directly with the end user in a manner that can only be good for both sides, giving the consumers more confidence in the food chain and hopefully allowing producers/farmers to capture more of that value for themselves,” said Connolly.

With the arrival on the farm of big data, the work of the 21st century grower or producer is rapidly being fine-tuned like never before. Out with the guesswork and the questions left open to interpretation, in with unassailable hard facts, an entirely new degree of precision and a sense of reassurance that only a decade ago might have been dismissed as wishful thinking.

"I see a lot of changes in our area of expertise, IoT; the ability to use the cell phone network to transfer data back to the farmer’s phone so he can act on making informed decisions,” said Emmet Savage, co-founder of Moocall, a calving sensor that signals a farmer’s smart device when a cow is going into labor.

“There’s so much happening,” he continued. “It’s all about data. It’s all about recurring revenue. And it’s all about making the farmers’ lives easy.”

The silage we prepare this year will be a key ingredient for next year’s feeding programs. This means that a hiccup in silage preparation can lead to a year of poor forage quality, while a year of exceptional weather and silage management can offer a year of quality feed and optimal herd health. What happens now has long-range consequences, whether good or bad.  

Farmers deal with many factors on a daily basis that are out of their control, with silage being one of them. Understanding what aspects of growing, chopping and ensilaging forages we can control can make all the difference between a year of mitigating forage issues and battling marginal milk production and a year of optimum herd health and prosperity.  

Over my years of experience in silage management, I have developed four practical and proven tips for making great silage.

1. Start with quality

This means you need to make the proper seed selections from the very start! The following factors are important when selecting seeds, so be sure to consult with your seed salesman before you make a decision:

• Yield potential
• Digestibility
• Grain content

2. Proper moisture and maturity

Harvesting your crops at the proper moisture and maturity optimizes the benefit for the animals. For corn silage, the proper moisture should be approximately 65–68 percent.

It is important to remember that chop height is also important. For corn silage, the normal chop length should be 6 inches.

You can increase the quality and digestibility of the corn silage by increasing the chop length to 12–16 inches, but it is important to remember that we lose between 7–15 percent of our yield by chopping at that height.

3. Storage and filling of the harvest

With the popularity of high-horsepower, self-propelled choppers and custom operators, we can get a lot done in a very short amount of time when filling our silage piles, but being able to ensure that we get good packing and preservation of our forages is important. If you are using one of these machines, you may need to increase the quantity of tractors or weight used after placing the silage on the pile. Remember: When a tractor is compressing a pile, it can only efficiently compress up to six inches underneath the tractor tire, so layers need to be added in increments of six inches or less.

A lot of times when I am on the farm, I hear, “When the silage starts coming in really fast, we just let it all come in and spend a few hours at the end packing it down with the tractor,” and that is not something I want to hear. If you aren’t spending the time during the gradual filling of the silage pile and instead wait until the end to pack it down with the tractor, you are significantly decreasing the quality of the silage on the top and wasting time.

4. Be patient!

After harvest and when storing your feed, be patient as to when you are going to feed that silage. I understand there are times when we need to feed before we would like to on our forages, but we would like to try to keep the silage covered for at least four to six weeks before we open the pile or bunker to ensure that fermentation is completed and we have stable feed to provide to our herd. If it works for your operation, I would strongly suggest you allow three to four months prior to opening silage piles or bunkers to ensure you have quality feed for your animals. 

Have a question or comment?

Wait. In China they can do what?

Where on the planet can you try out a new beer, share photos of the brew on social media, buy a six-pack through that same social media channel and have it delivered to your doorstep?

In the world’s biggest beer-drinking market: China.

Chinese consumers — as a group, the world’s largest — spent $5.5 trillion on all sorts of purchases made through mobile payment platforms last year. That’s about 50 times the amount spent in this manner in the U.S., according to the Financial Times.

And well-positioned to accommodate a rapidly changing consumer landscape across China is Alltech Brewing.

“They can go on our WeChat channel,” said Dr. Mark Lyons, global vice president and head of the company’s Greater China division. “They can say ‘I just had a Kentucky Ale^®’ and they can actually order it directly through that app.”

That’s a far cry from the China of not all that long ago. Most Chinese over age 55 readily recall the austere conditions of the Cultural Revolution of the ‘60s and ‘70s. If in those days you had suggested that private consumption would someday be a significant force in the Chinese economy, no one would have believed it.

But over time, the nation’s industrialization has steadily increased mainstream affluence. Frugality is giving way to consumerism made affordable by discretionary income. Younger generations, driven by digital technologies and social media, are entering the market relatively free of the influences of the past.

“The pace of change in China is very, very fast, and a mere couple of weeks can change the entire dynamic, which means that strategies must be adapted,” said Mark Lyons. “The Western model of quarterly plans or even annual plans does not fit well where competitors can be operating in a much more real-time pace.”

In a report entitled “Meet the Chinese Consumer of 2020,” the McKinsey Quarterly notes that an outcome of this noticeable trend in consumer spending “is a propensity to trade up, driven increasingly by consumers aspiring to improve themselves, the way they live and their perceived social standing. Many Chinese, like their Western counterparts, judge themselves and others by what they buy.”

In its own analysis, the Economist Intelligence Unit (EIU) forecasts nearly 35 percent of the population, or around 480 million consumers, will meet its definitions of upper middle-income and high-income by 2030. That’s larger than the entire U.S. population of 321 million.

The EIU predicts that the portion of the Chinese population defined as low-income will shrink from 36.9 percent in 2015 to just 11 percent in 2030.

“There will be a corresponding bulge in the middle-income bracket, with a growing portion of the population falling within its upper reaches,” stated the EIU in a recent report. “The share of high-income consumers, with annual disposable income of above RMB 200,000 (US $32,100), will rise from just 2.6 percent in 2015 to 14.5 percent in 2030. China will look and feel like a more middle-class society.”

The trend is altering the consumer landscape in the world’s most populous nation as this rapidly emerging middle class expresses changes in preferences and tastes, upgrading consumption habits and switching to more expensive and premium brands — including the libations selected for personal consumption and entertaining.

A key to the success of Alltech’s beverages in China has been savvy pricing, according to Patrick Lin, Asia manager of Alltech Brewing.

“In the past, the highest-selling alcohol products were either on the lowest end of the price scale — mass-produced beer and spirits — or in the highest range — cognacs, high-end wine, etcetera,” said Lin. “Now, the new middle-class consumer is demanding something that’s in-between. 

“They no longer want the lower-priced beer their parents drank, and at the same time, they don’t want to spend the massive amounts that previously were spent on luxury alcohol products that were consumed as gifts and at banquets,” he explained. “The middle class wants to go out to restaurants and bars that are offering unique products and environments that are affordable, but not cheap.”

The China beyond Shanghai and Beijing

China is an immense nation of 31 provinces, its regions so diverse that the whole resembles a collection of separate countries.

“I often see companies coming in and seeing Shanghai, maybe Beijing, and assuming that they understand the country,” observed Mark Lyons.

And that, he says, can be a fatal mistake.

“Many subregions are very different in not only their levels of development, but personal, cultural preferences, in terms of the types of products consumers are looking for, but also business practices,” he explained. “This is where it is crucial to have local people in each market. We have representatives in virtually every province of China, and our regional representative offices help us considerably to be able to be more in touch with these local changes.”

Alltech founder and president Dr. Pearse Lyons has long been preparing his company to capitalize on the transitions now occurring in China. Alltech has 250 employees in the country, spread among offices in Chengdu, Guangzhou and Qingdao, with a factory in Tianjin and another expected to open in southern China.

“We have been in China for over 25 years,” he said. “We know the marketplace, and they know us. Therefore, to bring the beer in was almost like a logical extension. We decided to go to the market, so we reached out to our connections. We already had the resources there. They were well-educated, could speak the language and were Kentuckians. We needed to give them something that fit, like Kentucky Bourbon Barrel Ale^®.”

With the launch of Kentucky Bourbon Barrel Ale in China five years ago, Alltech became the first independently owned American craft brewery to produce beer in China for national distribution. The division now sells 10 different brews made by Alltech, including Kentucky White Ale^® , a citrus wheat beer that recently joined the beverage line. 

Sales expanded to Taiwan in 2015, then on to Hong Kong and Japan. Today, Alltech Brewing is the largest independently owned American craft brewery operating in China.

Alltech’s spirits were introduced to the market three years ago, including Town Branch^® Bourbon, Town Branch^® Rye, Pearse Lyons Reserve^® and Bluegrass Sundown^®. The Foxes Rock^™ brand appeared two years ago, and 2017 has seen the addition of Ha’penny Pot Still Gin^®.

The brands are stocked in stores and restaurants in more than 400 locations across Greater China, including nearly all of the largest cities, such as Beijing, Shanghai, Chengdu, Shenzhen, Chongqing and Tianjin, as well as in Hong Kong and Taipei.

The current sales focus, according to Mark Lyons, is on cities where palettes have long been accustomed to big Chinese beer brands such as Tsingtao, Yanjing and Snow.

“We’re offering something to them that looks completely different,” he said. “It’s probably three times higher in alcohol, has a very different flavor and is presented in different ways. Just getting them to try a beer is one thing. Once they do that, we see the same thing that’s happened all around the world: that conversion happens rapidly.”

And he believes the beverages’ appeal extends far beyond the city limits of China’s sprawling urban centers.

“It’s not even just second- or third-tier cities,” explained Mark Lyons. “It’s already down to communicating directly with our customers on the agricultural side who are in really small places where these sorts of products are not accessible.”

Quite a different picture in Japan

Alltech’s 2017 arrival in Japan required a recognition of dynamics that are in stark contrast with those in China.

Due to the steady aging of the population and low national birthrate, the Japanese drinking population is relatively small. But the Japanese, observed Mark Lyons, make up for it with attention to quality.

“You already have this very high level of affluence,” said Mark Lyons. “The focus on quality is extraordinary. There is such attention to every single detail. It’s a super-premium market, and I think that’s where our products can fit very nicely.”

With 290 craft breweries, according to a 2017 global craft beer survey released by The Brewers Journal and Alltech, Japan leads China (170 breweries) and Taiwan (22 breweries) among Asia-Pacific craft brewers. Australia holds the regional lead with 410. The Asia-Pacific region, however, accounts for a mere 7 percent of global craft brewery production.

Raising a pint to opportunity and partnership in China

When asked to consider Alltech Beverage’s most important achievement, Mark Lyons cites its presence and stature as the largest American craft brewer in China.

“That provides us with a platform for growth, which we’re very, very excited about,” he said.

And that growth works to the benefit of others.

“We’re beginning to sell other people’s beers,” he said. “We’re in discussions with several large American craft brewers (about) helping them come into the market.”

He notes that many craft brewers cast a wary eye in the direction of the brewing giant AB InBev and its self-titled “Disruptive Growth Organization.” The company is investing in craft breweries and craft beer bars in the Asian market.

“Many independent craft brewers are worried about this,” said Mark Lyons. “They’re concerned about middlemen and ‘gray channels,’ and they’re hesitant to get in. But when they see a company doing the types of things that we’re doing, it gives them a lot of confidence. So, we’re getting a lot of people knocking on our door. We’re seeing it as a great opportunity to provide customers with a truly independent and unique product.”

By 2020, predicts the McKinsey Quarterly, “companies (operating in China) that have focused on maximizing their brands’ scale will have to adopt a model based on a portfolio of more targeted brands or sub-brands to connect with different consumer segments.”

“Our more recent strategy on the beverage side to expand our product portfolio, including other companies’ brands, and also to diversify our own portfolio, is a response to this type of feedback from the market,” said Mark Lyons.

“It is clear that, without a great number of price points and brands that appeal to different demographics, it is difficult to really scale a business in a sustainable way,” he continued. “We have to be thinking about a market for us, in terms of craft beer, that within a little bit over a decade will have three to four times more accessible consumers.”

There are challenges to navigate, warns the EIU analysis: “China’s economic trajectory has become more uncertain, and firms will need to monitor risks accordingly in order to stay ahead of the curve.”

Pearse Lyons sees opportunity. His vision for the company’s beer and spirits interests in Asia is broad and has yet to be fully realized.

“We are actively looking at producing in other areas,” he said. “Keep in mind that we have Alltech Vietnam, Alltech Philippines, Alltech Malaysia, etcetera. Some of these offices are older than Alltech China. 

“We can use Kentucky Bourbon Barrel Ale as a major differentiator for us,” Pearse Lyons continued. “The strategy has been: use the beer, use the Kentucky name. We have a unique product to promote Alltech and our home state. It will slowly but surely build up the brand image.” 

The impact that heat stress can have on a herd, as we all know, can be substantial. When looking at a lactating herd, it is critical to find ways to minimize the effects of heat. But one vital area of the farm that is affected by heat is sometimes overlooked: calves can be extremely susceptible to higher temperatures due to their smaller body mass and higher respiration rate.

Calves and lactating cows experience heat stress at different levels. For a mature lactating animal, the level at which they begin to experience heat stress is at around 60 degrees Fahrenheit and is lower in humid environments. In contrast, calves start feeling heat stress around 75-80 degrees Fahrenheit. In the summer sun, calves look for relief in their hutches, but sometimes the hutch environment can be even hotter and more humid than the outside environment.

By managing the following three key areas, producers can ensure that their calves stay cool and healthy during the hottest time of the year.

Drink up: Keep calves hydrated

Though it might seem obvious, ensuring calves have an adequate water supply that is fresh and clean can be a key factor in helping to prevent dehydration. Dehydration can be particularly dangerous during times of gastrointestinal stress, which can hinder a calf’s rate of recovery.

Water acidifiers have been shown to increase water consumption because they make the water more palatable to the calves, which encourages them to drink more.

Shoo, fly — don’t bother the calves!

Hot temperatures go hand in hand with flies. It is extremely important to control flies in the calf’s environment, as flies are a main offender when it comes to transferring dangerous bacteria throughout the herd. Illnesses such as pink eye are known to be spread by flies. Recent research has also shown that flies can be carriers of some strains of Salmonella, which can show up later in life as a cause of mastitis at first lactation.

Common fly control methods include an Insect Growth Regulator (IGR) in the feed as well as treating and spraying around hutches with chemicals labeled to assist in fly control.

Easy, breezy temperature maintenance

Adequate ventilation is important for calves, especially if they are kept inside an enclosed area or barn. Some operations may have a more serious ventilation issue when using automatic feeders because the bedding can be more prone to moisture.

Ensuring the bedding remains clean and dry is critical to calf health and longevity. As temperatures rise, ammonia levels tend to rise as well, and wet bedding can pose a serious threat to calves as a result. Utilizing an ammonia binding product can be helpful.

De-Odorase®, a product from Alltech, is commonly utilized in calf barns to control ammonia issues.

Adequate ventilation is also important in the hutch. One key component to hutch ventilation is keeping vents open during the day, as hutches can get too hot if vents are closed. What many people don’t think about in the summer, though, is that hutches can also get too cold on cool evenings if the vents are not closed at night. This is particularly concerning in the summer because usually less bedding is used during this time, and a cold front can be hard on the less protected calves, especially when they are younger.

Heat stress can affect herds in many ways. Herd longevity and the future of operations depend on the health of calves, who rely on farm owners and managers taking the necessary steps to ensure they remain healthy during the summer. 

Have a question or comment?

When we talk about the balancing act of a healthy gastrointestinal tract, we want to make sure that calories, colostrum, cleanliness, comfort, the strength of the immune system and the health of the gut flora outweigh the pathogens that may invade the gastrointestinal tract of calves. In a recent webinar, Dr. Corale Dorn, a veterinarian at Dells Veterinary Services in Dell Rapids, South Dakota, explained how using proper management practices and keeping an eye out for diseases are key to tipping the scales in the right direction for healthy calves.

Calories

We need to adjust our thinking from quarts to the number of calories that calves are receiving through milk replacer.

“When I go out to a farm in the dead of winter in South Dakota and they are only feeding 2 quarts of 20/20 milk replacer every 12 hours, I know we are not hitting anywhere near the calorie requirements that we need,” said Dorn. “If we are completely missing the mark on these calorie requirements, we cannot expect to maintain calf health when pathogens enter the herd.”

If we are getting 2.1–2.5 pounds of average daily gain on Holstein calves, then we have enough calories to keep the calves healthy and growing. 

The calories and protein that they need depend on their weight and the temperature of their environment. For example, during the winter in South Dakota, we need to be feeding at least 6 quarts of milk a day.  This can be pasteurized whole milk or 24/20 milk replacer.

Re-evaluating our thinking when it comes to feeding calves for the calories they need can assist in their ability to endure seasonal changes and other challenges that can impact calf health.

Colostrum

It’s a given that calves need a good measure of colostrum beginning at calving. We know that when we take a blood sample at 24–48 hours post-calving, calves well-fed with colostrum should reach a calibrated total protein of 6.0 grams per deciliter

For calves that require esophageal tubes, we need to make sure they are getting 1 gallon of colostrum within the first six hours of life.

Not only is quantity key, but quality is equally important. Colostrum needs to be clean, high in immunoglobulin (IgG), low in bacteria and fed as soon possible. If colostrum is not fed within one hour, it needs to be cooled to less than 35 degrees Fahrenheit to prevent bacterial growth.

Cleanliness

A standard procedure to ensure milk bottles and nipples are properly cleaned is extremely important to reduce pathogen exposure to calves. It is also vital that the environment the calf comes into is managed properly to ensure cleanliness.

“The maternity pen is the first place the calf is going to be, so ask yourself, can you kneel into the bedding and come out with dry knees?” asked Dorn.  “If you have a large surge in calving, you can have a very dirty pen, so ensuring that pen is cleaned as frequently as necessary is important.”

Calves should be moved to a clean “wet calf” area within the first 15 minutes of life before attempting to stand. Be sure to clean this area vigorously after every calf to prevent pathogens from spreading between calves.

Comfort

The thermo-neutral zone for a calf is 50–68 degrees Fahrenheit.

In the winter, use calf jackets and deep bedding.

In the summer, we start to get anxious when we have semi-opaque housing, as on hot days these hutches can get very hot if not ventilated properly. Looking at ways to provide additional ventilation and water to hutch calves during the summer months is key to keeping calves cool and comfortable.

Immune system

Everything we do impacts the health of the immune system. Normally, when bacteria invade the calf’s system, immune cells attack and swallow up the bad bacteria, destroying them. However, some bad bacteria can evade this immune response.

“The problem with some of the bugs that enter the immune system, such as Salmonella, is that they have developed ways to invade the calf’s immune system by hitching a ride on the white blood cells,” explained Dorn. “Once bacteria join ranks with the white blood cells, we have a breach in the immune system and have bugs we can’t kill, with few medicines or vaccines that can slow down this process. This is where MOS products come into play. When bacteria attempt to attach to receptors on the intestinal wall, MOS blocks the attachment of these bacteria.”

Stop bugs before they take hold in your livestock

Long gone are the days we could just give calves a drug and kill the bug. Dorn advised dairy producers to:

• Keep the maternity pen clean. Be sure to test the bedding regularly to ensure it is not too damp.
• Ensure calves are well-fed! Remember, calves need an adequate supply of energy not only to fuel metabolic activity, but to support their developing immune system.
• Alltech’s Bio-Mos® is designed to feed the gastrointestinal tract and is the original solution to intestinal health issues. It promotes good bacteria and builds defenses, thereby maximizing performance and profitability.

To watch the full webinar, click here.  For more information on how Bio-Mos might be a fit for your farm, visit bio-mos.com.

The 20-somethings were from all over the world: the U.S., England, Ireland, Turkey, Brazil, Kazakhstan and Peru. And if they had one thing in common, it was their view of the supermarket.

“Do you think grocery stores are important?” they were asked by Alltech Chief Innovation Officer Aidan Connolly.

“Yes, they’re very important,” replied one young woman, “for old people.”

Leading Alltech’s Corporate Career Development Program, Connolly was hearing in this next generation of consumers a receptiveness for the sweeping, fundamental changes in the production, distribution, purchase and consumption of food heralded by the $13.4 billion Amazon acquisition of Whole Foods.

“When we buy our groceries, we mostly buy online,” one student told him.

The huge e-commerce company had already been dipping its toe in the food delivery market when it turned its eye toward Whole Foods.  AmazonFresh, a subsidiary of Amazon.com, is a grocery delivery service currently available in some U.S. states, London, Tokyo and Berlin.

The announced intentions of this mega consumer product distributor to take a step further into the brick-and-mortar premium grocery business has made waves all along the food chain, from retail to agriculture.

“I think it's an extraordinary moment,” said Mary Shelman, former director of Harvard Business School's Agribusiness Program. “This could truly be a disruption rather than a change."

“Disruption means you do something in a completely different way rather than just making some incremental changes to it,” Shelman continued. “Amazon, which had historically envisioned a world without brick-and-mortar stores, is now, in one fell swoop, making a significant run into that brick-and-mortar world.”

The deal, providing Amazon access to Whole Foods’ 466 stores in the United States and the United Kingdom, hasn’t yet closed, and there is plenty of speculation that competitive bids could materialize. But Amazon has its reasons to pursue the acquisition with determination.

“Food is the least penetrated category from the online shopping standpoint,” explained Shelman. “Amazon clearly wants to bring that into the fold. I think the realization is that it takes some different skills and infrastructure in food than perhaps they are set up to deal with, so this gives them a tremendous opportunity to learn from that, and to run with that.”

Addressing widely held consumer perceptions may also play an important role in this odd-couple marriage.

As Shelman sees it, “For Amazon, the biggest challenge in delivering fresh products to your home is what everybody always says: ‘Oh, I don't trust them. I want to go pick out my fruits and veggies and my meats myself.’ Whole Foods brings in that brand name that has value, so it’s: ‘I trust Whole Foods, so now I trust Amazon bringing me Whole Foods quality. Do I trust Whole Foods to deliver for me? I don't think they're very efficient. But Amazon delivering Whole Foods is like, wow!’ So both sides win from the opposite brand name.”

What might this mean at some key points along the food supply chain?

Producers and growers in an Amazon/Whole Foods world

The biggest obstacle for producers trying to access markets through the food retail industry today is the enormous power held by the supermarket and big box chains as gatekeepers to the consumer.

Control of in-store product positioning provides an enormous source of revenue for traditional supermarkets. So-called “slotting fees” must be paid to win premium space in order for a product to appear on the shelves of Krogers, Safeways and other major chain stores.

“Only big companies can afford to do that,” said Shelman. “Even if you are a small company and can find the money to pay a slotting fee to get on the shelf, the ongoing costs of the promotion and support that it takes to actually get your sales up to a level that is acceptable to that retailer is a staggering number — something like $100 million, $10 million to introduce a new brand today.”

A major casualty of this, she notes, is creativity.

“We see that in the big packet food industries: They just bring out yet another flavor, another line, another variation in that brand, and they keep blocking up that shelf,” she explained. “You really don't get any true innovation there.”

Shelman believes the evolution of the “Amazon marketplace” is providing new opportunities for smaller producers to bypass those costs and directly reach the consumer.

But Connolly believes “Big Ag” and smaller farmers alike have some concern.

“It's part of seismic changes taking place in the food chain,” he said. “The top 10 food companies have seen a decline in their sales, profits and share prices as consumers reject traditional famous food brands built around processed foods.”

Every day these shifts are reflected in the news: Nestlé being a $3.5 billion target by an activist investor; Kraft’s attempted takeover of Unilever; Amazon gobbling up Whole Foods; and Wal-Mart’s purchase of Jet.com 

So, if traditional “Big Food” players are in trouble, how should agribusiness respond?

“It must adapt to the new reality,” says Connolly, listing the top three strategies food businesses must take to thrive in the changing landscape:

1. Become lean: Big Food that is merging or being acquired will seek to drive costs out of the system.
2. Deliver prosumer values to address the prosumer and millennial agenda of traceability, transparency, sustainability, welfare and removing unwanted additives.
3. Go direct and to build your own brands again.  

Connolly notes that “this is a new era with the food business re-fragmenting, and smaller brands will be faster to build and sell direct. Consumer sales over the internet offer an opportunity for ‘Big Ag’ that was not available 20 years ago.”

In this new coupling, who will take the lead? Shelman expects that Amazon will pull Whole Foods toward its brand promise and mass appeal: convenience and reasonably priced items across quality levels.

“I don't believe Amazon will broadly adopt the same positioning and values as Whole Foods across their broader food portfolio,” she said. “I can't imagine them not selling Cheerios or Kraft Mac & Cheese online. They may initially adopt a higher quality approach in fresh products — meats and produce, since those seem to require a stronger brand to sell.” 

Consumers in an Amazon/Whole Foods world

Photo Credit: Whole Foods

Today’s consumer is swimming in a sea of options and information. The innovation of the “food kit” has given rise to the home-delivered packages offered by Blue Apron, HelloFresh, Plated, Purple Carrot and Home Chef. Nestlé has invested in the prepared meal delivery service Freshly, and Sun Basket has attracted Unilever capital.

It takes time to complete a merger with all the complexities brought to the table by Amazon and Whole Foods. So what's going to happen to the rest of the food industry while t’s are crossed and i’s are dotted? Views differ about the extent to which the merger will cause change.

Speaking to analysts and investors at a conference in Boston, Kroger CFO Mike Schlotman said he doesn’t envision a major shift to people ordering groceries online for delivery to their homes.

“Part of me refuses to believe that everybody is just going to sit at home and everything is going to be brought to their doorstep and nobody is ever going to leave home to do anything again,” said Schlotman.

But, according to Connolly, “the United States has been slower to the party than other parts of the world,” and there is plenty of evidence that significant change is already well underway.

“Maybe there are some of us that take joy in walking up and down the grocery aisle and doing that as our chore, but what consumers are saying is that they're voting with their feet,” Connolly said. “They're saying, ‘If you give me a better alternative, I won’t go to the store.’"

Connolly recalls the observations of a friend who is involved in the food industry in the U.K., working with Marks & Spencer, Sainsbury’s and Tesco, who forecasts that we're in the last five to eight years of the big box model of the supermarket.

“What we're going to see in the future, according to him, is much more of a Starbucks version of a grocery store,where you can buy the small produce, organic, the pieces that you want to have hands on, but for the most part, you're going to pick it on your cell phone, ordering it directly, and it will arrive today by delivery in a half-an-hour increment,” he explained. “So if you say 4:00 p.m., it'll be between 4:00 p.m. and 4:30 p.m. In the future, that will be delivered by robots, which is already happening in England, and eventually it'll happen by drone.”

One of the world’s largest pork producers, Smithfield Shuanghui of China, has a strategic cooperation agreement to sell packaged Smithfield meats through JD.com, a Chinese version of Amazon.

“They’re creating a cold chain system from the warehouse to the customer, selling fresh chilled foods, including packaged meats,” says Michael Woolsey, senior strategic manager for Alltech China. “If a customer in the morning decides they want to have hotdogs from Smithfield for dinner that night, they take out their cell phone, dial up JD.com, order the hotdogs and the truck shows up later that afternoon. Chilled distribution the entire way to the consumer’s door. So, it’s a superior product. It’s what consumers want. It’s an exciting development.”

Shelman says today’s marketplace “is just fundamentally different” as consumers are being conditioned to a whole different set of solutions.

“I think for everybody now, the fun of thinking about these different scenarios and letting go of the old retail model is leading us all to be very challenged to think about what that future is going to be like,” she said. “How are we going to get our food 10 years from now?”

Connolly sees profound change arriving even sooner.

“If we think of machine vision, where you use a camera with artificial intelligence, you can teach your camera to recognize what you want in your meat, what you want in your produce,” he said. “It can learn to smell the produce. It can learn to recognize the color that you want. It can probably even, using these internet of things-type devices, give you all of the origins of and the pesticides used in the products, all of the things that might cause allergies.

“So, your drone, equipped with the right camera and the right artificial intelligence, can do these things,” continued Connolly. “And we are not talking about something that is going to happen in the next 30 years. This can happen within the next 12 months.”

And 20-somethings from Brazil to Kazakhstan can hardly wait.

On long, hot summer days, at family celebrations and on national holidays, there’s nothing better than finishing off the day with fresh-from-the-cow, homemade ice cream.

Alltech territory sales manager Scott Holloway, who grew up in Bowie, Texas, has fond memories of his great-grandmother Ineta Wood’s ice cream, made fresh with milk from their family dairy. Scott’s family continues to use Grandmother Wood’s recipe for every summer holiday celebration, from Memorial Day to the Fourth of July to Labor Day, and especially for family birthdays. Even friends of the family expect it to be at every gathering!

“I remember, growing up, my mother making it, and the sound of the electric freezer running in the kitchen,” said Scott. “The best part is licking the paddle after the ice cream is frozen. Now my kids enjoy doing that, just as I did.”

Today, the Holloways have an old White Mountain hand-crank freezer that makes the magic happen. He says it’s fun to use, even though it’s hard work, and the end result of  rich, creamy ice cream is worth the effort. Over the years, the family has experimented with delicious changes on the basic recipe. Scott’s favorite flavor is chocolate, although his grandmother, Grandma Kay, makes an excellent Butterfinger recipe that is a family favorite.

Scott says that the best part about the ice cream was always the fresh milk used from their own family dairy herd. His grandfather started the dairy in 1971, when they milked about 150 Brown Swiss and Holstein cows. Scott’s father and Scott himself both came back and worked at the dairy, too, until they sold in 2014. Now they enjoy the family’s ice cream recipe using store-bought milk, but they cherish the special memories of when the milk came from their own cows.

Grandmother Wood’s Homemade Ice Cream

You’ll need an ice cream freezer with a 1-gallon freezer can for this recipe.

4 eggs

2 cups sugar

3 tablespoons flour

Dash of salt

1 quart whipping cream

1 tablespoon vanilla extract

Milk (about 2/3 gallon)

Mix 1 cup of sugar, flour and salt in a microwave-safe bowl. Whisk about 1 quart of milk into sugar mixture. Microwave for 3 minutes, then whisk. Microwave again for about 2 minutes.

While cooking sugar mixture, beat eggs in a separate bowl. Beat ½ cup of hot mixture into eggs and then quickly beat eggs into the rest of the hot mixture. Microwave 3–4 minutes.

Chill in refrigerator.

Once chilled, place in a large mixing bowl. Mix in the remaining cup of sugar and vanilla extract, then add whipping cream. Stir in milk to fill bowl. Pour ice cream mixture into freezer can and add more milk until can is filled. Freeze according to freezer instructions.

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The Great Green Getaway: Alltech & KEENAN launch sweepstakes for U.S. dairy producers

Three winners will receive trip for two to Ireland for the week of St. Patrick’s Day 2018

[LEXINGTON, Ky.] – Ireland is known as “the land of a thousand welcomes,” and staying true to its roots, Alltech is upholding the enduring tradition of Irish hospitality by launching The Great Green Getaway. In partnership with KEENAN, an Alltech company, maker of the “Green Machine” mixer wagon, the sweepstakes invites American dairy farmers to enter for the opportunity to win one of three travel-expense-paid trips for two to Ireland in March 2018, coinciding with St. Patrick’s Day.

The tour destinations include a “how it’s made” tour of the KEENAN production facility in Borris, County Carlow, Ireland, a guided VIP experience at the new Pearse Lyons Distillery (opening summer 2017), visits to a host of high-performance Irish dairy farms and St. Patrick’s Day celebrations in Dublin City Centre.

“We are proud to work with dairy farmers around the world and provide technology to increase on-farm productivity and maximize feed efficiency,” said Robert Walker, chief executive officer of KEENAN. “We are looking forward to welcoming the sweepstakes winners to Ireland to show them our innovations while also celebrating Irish traditions.”

The sweepstakes opens June 28, 2017, during National Dairy Month, and the winners will be announced on Oct. 7, 2017, at World Dairy Expo in Madison, Wisconsin. The sweepstakes is open to U.S. dairy farmers who have 50 cows or more and are over 18 years of age.

For more details and to enter The Great Green Getaway sweepstakes, visit http://go.alltech.com/greatgreengetaway.

Nikki Putnam, registered dietitian nutritionist and nutrition solutions specialist at Alltech, compares cow’s milk to other milk alternatives and explains why cow’s milk still reigns supreme nutritionally.

Once, milk was a beverage made only by dairy cows. But a walk into the "milk" section of today’s supermarket would suggest otherwise.

With a growing selection of milk alternatives made from soy, almond, rice, hemp, coconut and cashew, consumers have become increasingly confused by the health attributes touted by both milk and milk alternatives.

While these plant-based products make up less than 10 percent of milk sales, they are gaining ground. Even popular coffee chains have hopped on the milk alternative train — will your mocha be made with 2%, 1%, nonfat…or soy, almond or coconut milk?

Plant-based milks have been perceived, or sometimes advertised, as healthier alternatives to dairy, but that’s not always the case. Milk alternatives were created to accommodate consumers who have an allergy, are lactose intolerant or have vegan dietary restrictions, not because they are nutritionally equivalent or better.

Check the (nutrition) facts on the milk carton 

Milk alternatives, with the exception of soy milk, have considerably less protein than dairy milk. Although many of the plant products fortify their beverages with additional nutrients, they also have a long list of added ingredients, including sugar, salt and thickening agents.

The 2015 Dietary Guidelines Advisory Committee identified low- and fat-free dairy as part of a healthy diet. With the exception of fortified soy milk, the same cannot be said for milk alternatives, which lack the quantity and quality of nutrients milk has, including vitamin D, calcium and potassium.

Milk, yogurt and cheese are naturally nutrient-rich foods that provide many essential nutrients that contribute to good health at all stages of life. Milk is a natural source of calcium and vitamin B12, riboflavin, phosphorus and potassium. It also contains smaller amounts of other nutrients including vitamin A, other B-vitamins, vitamin D, magnesium, iodine, selenium and zinc.

Dairy foods are also excellent sources of high quality protein that contain essential amino acids, which the human body cannot synthesize itself. ¹  

What type of milk is best for toddlers?  

Cow’s milk is not recommended during the first 12 months of life. However, fortified cow’s milk is an important dietary component of a toddler’s diet because of its high-quality protein, calcium, and vitamins A and D. Calcium is involved in bone growth, tooth development, and muscle contraction, and it may play a role in the regulation of blood pressure and body fat.²  

One study showed that children who consumed milk with the noontime meal were the only group to meet or exceed 100 percent of the daily Dietary Reference Intake for calcium (i.e., 500 to 800 mg).³ Two or three servings of milk or dairy products per day are recommended to meet these requirements.

What's in your glass? 

This chart from National Dairy Council^® is a great at-a-glance look at how milk compares to the alternatives.

Credit: National Dairy Council. Original post: https://www.nationaldairycouncil.org/content/2015/whats-in-your-glass. 

More milk truth?

For more information, visit National Dairy Council's website.

Check out #getreal and #milktruth on social media for more highlights on the differences between dairy and plant milks.

References

1. European Dairy Association Position Paper: MILK & DAIRY PRODUCTS ARE PART OF A HEALTHY, BALANCED DIET INCLUDING THOSE CONTAINING ADDED SUGAR 2015
2. Allen R, Myers A. Nutrition in Toddlers. Am Fam Physician. 2006 Nov 1;74(9):1527-1532.
3. Johnson RK, Panely C, Wang MQ. The association between noon beverage consumption and the diet quality of school-age children. J Child Nutr Mgmt. 1998;22:95–100.

I want to learn more about promoting the health of my dairy herd!

Long summer days, grills sizzling, friends laughing.

Fall colors, crisp leaves, fans cheering on their favorite football teams.

Winter chill, comfort food, families coming together for the holidays.

Spring flowers, rain showers, graduation parties.

No matter the season, this easy-to-prepare hamburger cheese dip is a fan favorite. For Randi Walden, an Alltech assistant marketing specialist in Georgia, this is her go-to potluck recipe when she wants to be the party hero!

Made of two kinds of cheese combined with ground beef, this dip showcases the delicious products of both the dairy and beef industries, and the short ingredient list and quick preparation time make the dish perfect for any pop-up party.

Randi’s Hamburger Cheese Dip

1 package Velveeta (16 ounces)

1 package cream cheese (8 ounces)

1 pound hamburger meat, browned and drained (if greasy)

While the hamburger meat is browning, cube all the cheese and place it into a microwave-safe mixing bowl. Microwave until cheese is melted, stirring as needed to combine. Once the cheese is melted and mixed, stir in the browned hamburger meat. Serve with chips of your choice.

This may also be made in a slow cooker, to help keep it warm for serving.

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