New report provides eight models for financing sustainable dairy

Dairy farmers seeking sustainable practices and technologies for their farms face a variety of financial barriers that can prevent them from taking action. For the dairy sector to meet its collective sustainability goals, the broader dairy value chain and agricultural financial sector must collaborate with producers and each other on financial solutions that overcome these barriers and enable farmers to access economic opportunity. 

A new report, Financing dairy climate solutions: How the dairy value chain and financial sector can collaborate to reduce methane emissions from U.S. dairy, outlines eight financial models designed to overcome financial barriers associated with manure management practices and feed additives that reduce dairy methane and generate other benefits to farms. The financial models can activate collaboration between financial institutions and the dairy sector to make economically viable sustainability investments on dairy farms. The report is the result of a collaboration between Environmental Defense Fund and the Innovation Center for U.S. Dairy, who commissioned Pinion to author it.

Download the report PDF

Key findings 

• The current approach to financing dairy climate solutions is unscalable and cumbersome. It depends too heavily on individual farmers piecing together different and frequently incompatible sources of finance. 
• Financial models must be designed to overcome the financial barriers to adoption faced by farmers. Financial barriers to adoption of a variety of manure management practices and enteric emission-reducing feed additives include high upfront costs, gaps between operational expenses and receipt of funding, ongoing operation expenses and increased risks associated with new practices.
• Collaboration is essential to finance dairy climate solutions at scale. There is substantial interest from both public and private sources of finance in supporting dairy farmers in adopting sustainable practices and technologies, but the different sources of finance need practical models to enable collaboration.

Taking action

Given the urgent need to scale funding for methane mitigation practices and technologies, there are numerous opportunities for dairy value chain members, financial institutions and other partners to advance new financing models together. EDF and the Innovation Center for U.S. Dairy invite all those interested to collaborate to realize these financial solutions for the benefit of dairy farmers and the climate.

Download the report PDF