U.S. DAIRY SUSTAINABILITY COMMITMENT

2012 U.S. Dairy Sustainability Report A valuable resource for sharing our industry progress

About the

ONLINE EXECUTIVE SUMMARY

3rd Annual Sustainability Report

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2010

2011 2012 progress on shared industry goals and efforts

Preparing for the 21st Century

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Growing population

Urbanization

Food quantity and quality

Limited resources

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What’s Included in the Report

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Farm Topics Our Planet: Energy and GHG emissions Our Cows: Animal care

Processor and Manufacturer Topics Our Planet: Energy, GHG emissions and water Our Communities: Community contributions Our Employees: Labor management

Our Businesses Our Communities: Health and wellness

The report includes the topics from the Stewardship and Sustainability Guide for U.S. Dairy (draft version 1.1)

+ additional topics

Our Planet: Environmental Priorities

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ENERGY 169 farm energy audits 160 digesters on dairy farms delivered an estimated $56.7M in business value to producers

GHG EMISSIONS 25 dairy companies achieved the ENERGY STAR Challenge: Est. GHG emissions reduction of 58,000 metric tons of CO2e

WATER 2012 Innovation Center LCA research findings: 5.1% of total U.S. water withdrawal is from dairy-related water use

Opportunities for improvement exist at every step in the dairy value chain.

Our Businesses

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2012 economic challenge: Higher feed costs combined with a drop in milk prices

cwt: hundred weight

Our Employees

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The dairy industry strives to ensure a safe and respectful workplace.

Employment and Payroll (2006-2011)

High standards of animal care have been linked with increases in milk production and quality.

Learn more in the forthcoming Best Practices Guide developed by the Innovation Center’s Cow of the Future project team.

Our Animals

Our Consumers: Health and Wellness

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Nutrient-rich milk and dairy foods help foster health and wellness among people of all ages.

Commitment to children’s health

$10m in GENYOUth mini-grants to

3,000+ schools

75% of our nation’s schools are enrolled

in the program

18.7% of dairy’s new product claims in 2012 were health and wellness claims such as low fat, low sodium, low calorie or no added sugar.

Community Contributions

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Food drives, mobile food pantries and hunger relief efforts provide healthy, high-quality food to those in need.

1 in 6 AMERICANS

FACE HUNGER

2012 partnership among Feeding America, National Dairy Council and the Academy of Nutrition and Dietetics

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Outstanding Dairy Farm Sustainability • Petersen Dairy Farm of Appleton, Wis. • Prairieland Dairy of Firth, Neb. • Skyridge Farms of Sunnyside, Wash. Honorable mention: McCarty Family Farms of Rexford, Kan.

Outstanding Dairy Processing & Manufacturing Sustainability • Unilever of Henderson, Nev.

Outstanding Achievement in Renewable Energy • Green Valley Dairy of Krakow, Wis. Honorable mention: Fulper Family Farmstead of Lambertville, N.J.

Outstanding Achievement in Energy Efficiency • Ballard Family Dairy & Cheese of Gooding, Idaho

2013 Award Recipients

Supplemental Funding

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Source 2010* 2011 2012 Direct Funding $6,600,000 $8,038,630 $4,732,305

Partnerships 700,000 500,000 525,000

Grants/Awards 525,000 1,168,000 -

Sponsorships 211,000 165,000 253,892

In-kind Contributions 5,164,000 6,205,630 3,953,413

Indirect Funding** - - $840,000 Total Direct and Indirect Funding

$6,600,000 $8,038,630 $5,572,305

*Values for 2010 reflect January through August 2010. **Tracking started in 2012 for grants and awards given to external organizations for efforts to advance a sustainable dairy industry.

SUPPLEMENTAL FUNDING (2008-2012)

286% increase from 2008 to 2012

2012 in-kind support from 728 stakeholders

Using the Report

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Share results, infographics and stories with others.

Let us know what you think of the 2012 report at USDairy.com

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Slide notes and sources

3. Nutrition: A. Drewnowski, Am J Clin Nutr, 2010; USDA National Nutrient Database for Standard Reference SR25; 2010 Dietary Guidelines for Americans. Nutrient management and by-products: Est. of human-edible and inedible materials computed from the avg. Midwestern lactating cow ration published by Thoma et al.; Greenhouse Gas Emissions of Fluid Milk, 2010; Erb, Kevin; Manure 101, University of Wisconsin Extension, 2010; Digester: Innovation Center, Case Study: Food Waste, 2013. 5. Henderson et al., U.S. Fluid Milk Comprehensive LCA, University of Michigan and University of Arkansas, 2012. Thoma et al., Greenhouse Gas Emissions of Fluid Milk, 2010. 6. USDA/NASS; Milk-feed price ratio: 1/Pounds of 16% protein mixed dairy feed equal in value to one pound of whole milk. 7. Quarterly Census of Employment and Wages. U.S. Department of Labor, Bureau of Labor Statistics 8. Strategic Insights and Planning Dept., Dairy Management, Inc., Innova database custom query, “Market Insights Into Milk, Cheese and Yogurt Claims in 2011 and 2012,” accessed April 8, 2013. Milk is defined as milk and other dairy drinks; cheese is defined as natural/ processed cheese, ricotta cheese, cream cheese, cottage cheese and goat cheese; yogurt defined as yogurt cups and drinking yogurt/fermented beverages. 11. In-kind contributions are estimated at the amount of formal stakeholder participation hours, valued at a $115 per hour rate.

©2013, Innovation Center for U.S. Dairy. All rights reserved.