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The 10 lessons learned in the International dairy sector during the COVID-19 pandemic

2020-10-21 15:43:35 Comments:0 Views:51 category:SDDDC News

I’m slowly drifting away (drifting away)
Wave after wave, wave after wave
I'm slowly drifting (drifting away)
And it feels like I'm drowning
Pulling against the stream
Pulling against the wave

                                                                             Lyrics of ‘Waves’ by Mr Probz



“The best predictor of future behaviour is past behaviour”

                                                                                           Mark Twain

Introduction

The above quote, meaning that we can learn from the past to predict the future, is often used by teachers and professors all over the world. What can we learn from the past in relation to the COVID-19 pandemic, which hit the world in the year 2020? And what can we learn from the current past, as we are still in the year 2020 and the COVID-19 virus is still among us and the main fear is that it will occasionally keep popping up?

Imagine the pandemic had taken place 20 years ago. Our children cannot imagine what the world looked like at that time. No Wi-Fi, no internet, no smartphones, no Netflix or other 24/7 on-call television programmes. Working from home? On-line shopping? School from a distance and on-line? Okay, in the outback of some countries such as Australia and on ships, children have received on-line education for decades thanks to VHF broadcasting or similar technologies. Still, we as humans would have dealt with the virus in a completely different way 20 years ago. This pandemic is not the first one, though.

This booklet is not about the COVID-19 virus itself. We also do not pretend to know anything about how to conquer the virus or which countries were more or less successful in dealing with the virus. In this booklet we want to focus on an essential sector, the dairy sector. A value chain from grass to glass within which a chain of cows, farmers, milk collectors, milk processors, distributors and commercial people daily work on providing food for billions of people, including highly nutritional dairy. Not all people realise that dairy is an important part of our lives and that we use and consume it throughout our lives, wherever we are and wherever we go. Not only today, but for many centuries already.

New-born babies are fed with breast milk or, when breast milk is not available, a substitute of this made from, for instance, cow’s milk. We use butter when cooking, we drink flavoured dairy drinks and chocolate milk, and we eat ice cream containing cream. We also consume a lot of milk products, such as milk, cheese, yoghurt, cheese toppings on pizzas or pasta and desserts during our meals. We drink coffee or tea with milk and some people suffering from asthma use inhalers containing elements of whey, a by-product of the cheese production. The tastes and food behaviours of consumers vary substantially across the world, but nowadays we see a fast developing trend of more common food preferences, such as Italian pizzas and pastas, hamburgers and cappuccino.

The pandemic is not just about the virus, the infection, the health care and people dying from it, but the effects of the interventions and lockdowns are just as severe. We can distinguish three waves in the process. Firstly, we have the tsunami of infections and the pressure on the healthcare system. Secondly, we see the global economic impact resulting in recessions in most countries and placing the global economy backwards many years, especially those who depend on tourism as their main income. Thirdly, there is the food crisis in some continents and countries that are dependent on food aid and import of food. In those countries this may lead to social unrest, terrorism, riots and (social) instability. The COVID-19 crisis is all about waves. The spreading of the virus around the world comes and goes in waves, as do the economic effects and the fundamental health and social aspects, such as food and safety in general. We will not deeply go into what caused this global crisis and the journey it has made, but we will specifically focus on the dairy value chain.

What can we learn from this pandemic, which actually is not over yet? What lessons can we draw from this for any future pandemic-like situation? How can we build strongholds to avoid major disruption of the entire supply chain as experienced in some countries?

While writing this booklet, the situation is still fluid and volatile. The virus is still around and behaves like a peat fire. We must always be alert. As dairy sector (and the whole of mankind) we live in a new reality and we have to deal with this in a way Mahatma Gandhi addressed as “You must be the change you wish to see in the world”.


 “If more of us valued food and cheer and song above hoarded gold, it would be a merrier world”

                                                                                                                                                            J.R.R. Tolkien

Lesson 1. Safeguard the food chain

It has been proven that in times of disasters, disruptions or wars, the supply of food and water is always of vital importance. When Napoleon wanted to conquer Russia in the nineteenth century, he realised that feeding a huge army during the winter would be crucial to win the battle. He organised a competition for the best solutions to make food available for his soldiers at all times. This actually led to the invention of the tin food can. The concept has not changed very much over the past centuries, although we do not use led any longer as a sealant for the cans. Some even say that Napoleon lost the war due to led poisoning among his soldiers, although according to other theories it was the cold and lack of morale. The point we want to make here is that securing the availability of food and water is of really great importance. The choice between dying from hunger and the risk of being infected by corona is not difficult to make. In large parts of Africa and South Amerika as well as in some other countries, people have enough food for just one day. They spend all day getting their portion of food for that same day. When some countries announced a lockdown, millions of people in Africa left the cities and went to the countryside, usually the villages they originally came from. This exodus, often by public transport or by foot, created another threat of infection and spreading of the virus itself.

The first outbreak of COVID-19 was reported in Wuhan. In the city and its surrounding areas, over 50 million people were asked to stay indoors. Only one person per household was allowed to go out shopping one day a week. Can you imagine 50 million people staying indoors for 2 months or longer? Here food and water were, again, the crucial factor. The government did its utmost to ensure the food supply to the cities and the areas in lockdown. There was no lockdown in the surrounding areas in China, so an impressive logistic system was set up, also with the help of the army, to provide the 50 million people with food and water. There were no long waiting lines in front of the shops, no plundering and no exodus from the cities.

How did other dairy companies, for instance the Dutch cooperative FrieslandCampina, deal with the pandemic? They opted for a so-called two-pillar approach:

-       People’s safety first

-       Keep the dairy chain operational

Keeping the dairy chain operational was and still is key for the dairy industry. Generally, farmers have their farms in relative safe areas in the countryside. Visitors are no longer welcome at the farms, only trucks to collect the milk or to deliver essentials for the farm. Because of the high risk of infection, the farmers avoid meetings and do not go to church. The drivers of the milk collection truck also present a big risk. They visit a lot of farms and if infected, they may function as the ‘postman’ delivering COVID-19. Therefore measures have been taken enabling drivers to collect the milk without even seeing the farmer and so prevent the spread of COVID-19.

The same way of working is applied in the over 25 dairy production plants of Royal FrieslandCampina in the Netherlands. These plants went into full lockdown at an early stage, as infection between employees had to be avoided at all times. No visitors are allowed and the people at the offices mainly work from home. People working in shifts are not allowed to meet people of other shifts. If someone has any symptom of COVID, he or she has to go into quarantine at home. In case of an infection, the full shift is taken out of the planning and the remaining shifts are to take over by means of extended shifts. If a complete production location is to be shut down due to COVID-19, the milk can be transported to other locations.

All dairy players in the Netherlands have organised themselves in The Dutch Dairy Association and cooperate with respect to pre-competitive topics or a crisis such as COVID-19. An agreement was made to help each other in case one or more plants are to shut down. All these measures have been taken to keep the milk collection and the supply of food to the shops and retail going 24/7.

In the meat industry in the USA and Europe infections popped up among personnel and plants were temporarily closed. It appeared that in Germany, the Netherlands and the USA a lot of people working in the slaughterhouses are foreign workers, who often live with a lot of people in small houses and so run the risk of being infected. This sector underestimated the importance of the COVID-19 measures and the impact was huge.

From the above it may be concluded that putting plants in lockdown and taking preventive measures are essential in this strategy. There also is a strong link between meat and dairy processing as shown by the slaughterhouses causing a chain reaction. When employees fall ill, slaughterhouses are closed and no cows and calves can be transported to the slaughterhouses. Because of this, animals had to be killed and destroyed when a farmer could not keep them any longer due to lack of space and feed. This again created a shortage of meat in the supermarkets and food shops.

The lesson learned here for the dairy industry is that it depends on the meat sector.

 

“Vehicles are one of the best modes of transportation. Relationships are one of the best vehicles of transformation”

Kate McGahan

Lesson 2. Transport and logistics

Who would have expected that there would ever be a lack of sea containers? As some large harbours were closed down during the outbreak, a huge number of containers were left unloaded and had to stay in the harbours. Also, no containers were shipped to the harbours that were still open when a part of China was in lockdown early in 2020.

Another clear lesson learned was the fact that a single Stock Keeping Unit (SKU), for instance a flavoured dairy drink, contains materials from many different parties. These parties sometimes are from various countries in different continents. This includes ingredients for the core products (e.g. vanilla, salt, sugar and soy as additives) as well as materials for processing and packaging. Here think of the plastic pallets used for bottles or packs for drinks, coatings or plastic caps, ink for printing, silicon sleeves, etc. The upcoming of the globalisation has considerably strengthened the interdependency between nations and transport within the food chain.

Petrol is another crucial item creating an issue during the COVID pandemic. The prices have dropped and so have the incomes of a lot of countries. This may be seen as a disaster, but a lack of oil/petrol, as happened during wars, would have been much worse. A lack of petrol can bring entire countries to a standstill. In the year 2000 no petrol was supplied to the petrol stations in the UK. This was a result of a dispute about prices and wages and the suppliers stopped supplying petrol/diesel. Within a week the entire country came to a standstill. Millions of cars were queuing up in front of the petrol stations, people started hoarding and measures were taken to keep the vital functions, such as emergency services, going.

No petrol will bring the dairy sector to a standstill as well. No tractors to use, the milk collection trucks cannot collect the milk and the products cannot be delivered to the distribution centres and shops. The main lesson learned is that the dairy industry needs to review its full value chain and make it more robust.

The same holds for medical equipment, masks, medicines, crucial spare parts, etc. As long as nations show solidarity with each other, there will be no issue. When the crisis was at a peak in China, planes with medical equipment were flown to China from the Netherlands. When the situation in China was more or less under control and the Netherlands was facing its peak, planes with supplies, including masks, were flown to the Netherlands again, as there was a dramatic shortage.

The lesson learned here is that As long as nations cooperate with each other, globalisation and interdependencies work well. However, when protectionism and conflicts between nations come in, solidarity will decrease and this will create new issues. Countries will start looking which products should be produced locally to reduce their dependency on other nations. Therefore efficiency will no longer be top priority in the procurement policies, as robustness and interdependencies are.

Both China and the Netherlands have invested a lot in an efficient food production system, as actually many other nations have. In some areas the trend among consumers for locally produced food is increasing. This is mainly to help local producers and for environmental reasons, but recent learnings with respect to robustness and interdependencies will accelerate this trend.


“We got where we are because our choices mapped the route and paved the road”

Craig D. Lounsbrough

Lesson 3. Digitisation and new route to market

How to keep your company operational while employees are not allowed to come to the plant or to the office. Imagine your employees have a desktop at the office only. Or software and infrastructure do not allow for working from home. There has been an explosion of webinar events and digital tools, e.g. Microsoft Teams, Skype and Zoom, became very popular in a very short time. A whole new cult around it was created.

On-line shopping

On-line shopping and on-line grocery delivery already were on the rise and becoming big, but they were strongly accelerated due to the lockdown and a fear for infections. The demand has increased so fast, that the retailers can hardly cope. After the lockdown, a certain percentage of the people will surely go back to the traditional way of shopping, but expectations are that on-line shopping has won a strong position in consumer sales.

On-line working and communication

Just like on-line shopping, on-line working and communication were available in many countries, including China and the Netherlands. Due to the lockdowns and travel bans, the use of services such as Zoom, Skype and Teams have more or less exploded. Schools and universities set up e-learning activities and many companies started holding on-line meetings using on-line tools. Within the SDDDC, training and communication make up an important part of the daily activities and the first on-line conference was held by SDDDC and its partners already within one month after the lockdown. Such courses can never replace the face to face training courses, but it was noticed that despite technical issues concerning connectivity and audio-visual quality the on-line events are very much appreciated. So on-line tools for communicating with customer also have strengthened their positions on the pathway to customers and consumers.

A case study: Qlip and COVID-19

In the early days of COVID-19, the Dutch Dairy Association (NZO), the Netherlands Controlling Authority for Milk and Milk Products (COKZ) and Qlip agreed to modify the working procedure for farm audits in the Netherlands. Priority remained the focus on food safety and quality aspects. Qlip is responsible for executing farm audits in the Netherlands for FrieslandCampina and other dairy companies. Just to put things in perspective: in the Netherlands we have ± 16,000 family dairy farms with an average of 100 cows at which Qlip performs farm audits once every two years with a duration of 1 to 1,5 hour.

How did we change our farm audits?

In the modified approach farms are divided into ‘good’ farms and ‘attention’ farms. The classification is done by means of a ‘risk indicator’ based on an algorithm developed by Qlip in which the results of the milk quality is an important parameter. Every three days, the milk quality of farms is measured in Qlip’s highly automated laboratory. Consequently, the risk indicator provides almost real-time information on the quality developments on farms.

For the ‘attention’ farms it was agreed to keep doing physical audits of 1,5 hours, of course taking all COVID-19 measurements into account (1,5 metre distance, check if neither the farmer nor his family are ill and have the document review take place in a separate room at the farm). Before setting the audit date, Qlip and the farmer discuss by telephone that all necessary documentation will be prepared and made available on the farm before arrival. Also the new working procedure is discussed and, eventually, a date for the farm audit is agreed. All this is confirmed by e-mail to the farmer. As from March 2020, hundreds of farms have been audited by Qlip according to this new working procedure. The plan for the ‘good’ farms is to start with a remote farm audit by telephone using a camera operated by the farmer. The document review and a tour around the farm are the most important elements of this type of farm audits, which are focused on various hygiene aspects.

The lesson learned is put in words by Eric van Dam (Director Sales & Marketing QLIP): “Act fast and be flexible. But most importantly, make use of and combine existing digital farm data in a smart way. This will result in more relevant information to selectively execute farm audits while maintaining the high food safety and quality standards set for the Dutch dairy farms.”


“Life is a sexually transmitted disease and the mortality rate is one hundred percent”

                                                                                                                                   R.D. Laing

Lesson 4. COVID-19 and farm animals

The SARS-CoV-2 virus is a zoonosis, which means that the disease can be transmitted from animals to humans. Many things have been written and said about COVID-19 and humans, but little is known about farm animals. Presently, there are no indications that farm animals and pets play a role in the current pandemic outbreak of the SARS-CoV-2 corona virus causing COVID-19.

There is a wide variety of coronaviruses in nature that can cause diseases in many animal species. For example, canine coronavirus (CCV) in dogs, feline coronavirus (FCV) in cats, porcine epidemic diarrhoea virus (PEDV), transmissible gastroenteritis virus (TGEV), porcine respiratory coronavirus (PRCV) in pigs and infectious bronchitis virus (IBD) in chickens. These viruses differ from SARS-CoV-2 and are mostly species-specific and non-zoonotic, meaning that they cannot be transferred to humans.

As for the coronavirus SARS-CoV-2, it is generally agreed that there is a minimum chance of this coronavirus infecting a (farm) animal. Globally, only a few cases in animals have been reported. In the Netherlands, multiple mink farms became infected and according to the Dutch government it seems plausible that some people working at mink farms were infected by minks. Tigers in a zoo in New York were tested positive for this coronavirus, as were some cats in Hong Kong and Belgium and two dogs in Hong Kong and one in North Carolina. In all cases the animals showed mild symptoms and their owners were tested positive. There are currently no indications that animals form a source of infection for humans. Nevertheless, the World Organization for Animal Health (OIE) asks member countries to share relevant developments regarding (possible) emerging animal diseases. Therefore, veterinarians are requested to contact national authorities in cases where a COVID-infection is suspected.

COVID-19 patients and farm animals

Preventive measures are key and this precautionary principle also applies to animals used for food production until more information on the risks becomes available. Livestock farmers infected with COVID-19 are advised to avoid any contact with their animals, to not go into the sheds and to let others take care of the livestock. When a pet or farm animal has been in contact with a COVID-19 patient, no additional measures are needed. General hygiene measures applicable to human-animal interaction, such as washing hands with water and soap, are sufficient. The Dutch government (like many others) developed also a general hygiene protocol.

General hygiene measures on farms (Dutch protocol)

In animal care facilities, general hygiene measures are sufficient. These measures also apply to veterinary clinics.

·         Do not allow pets to lick and wash hands immediately after having been in contact with animals, their food or their faeces.

·         Adhere to hygiene measures: often wash your hands with water and soap for at least 20 seconds, especially after having been to the bathroom, before eating, after blowing your nose, coughing or sneezing and between meeting different clients/patients.

·         When soap and water are not available, use an alcohol-based hand sanitiser containing at least 60% alcohol.

·         Provide disinfectant, wipes and tissues in all research locations, meeting rooms, toilets, break rooms and other communal areas.

·         Do not touch eyes, nose and mouth with unwashed hands.

·         Cough and sneeze in the elbow or use a tissue to cover the nose and mouth and dispose of the tissue immediately after use.

·         Additional measures are in place when animals suspected of having the coronavirus are treated or examined in a veterinary clinic.

New zoonoses will undoubtedly show up in the future. Learning from COVID-19 might help us to be better prepared for them.

Case study: CRV and COVID-19

COVID-19 also forced CRV to adapt its standard practices to prevent spreading the disease.

As a global company active in over 60 countries, CRV had to deal with a broad range of different measures implemented by (local) governments. It was impossible to formulate just one way of working, as the situation differed from country to country and the reactions of our customers to the situations differed between countries as well.

However, CRV formulated some guidelines to work with:

·         The health of our employees and customers is our first priority;

·         We will fully comply with the measures of the government;

·         We will try to continue our services and supply to our customers under these conditions;

·         We will not visit farms without prior consent of the farmer/owner;

·         We will keep a minimum distance of 1,5 metres from farm workers during all visits;

·         CRV will do its utmost to support farms in continuing to safely produce milk and meat.

As in most countries in which the services and products of CRV are considered to be essential, CRV has been able to continue its business in most countries, although farm visits have been reduced to the minimum.

Collection of data from farms is done digitally and advice is given by telephone and through other digital tools. The period during which most employees were working from their homes was used to maximise contact with customers and support them with useful information via e-mail, WhatsApp, seminars, etc. For many customers this period was also a time to reflect upon their activities and to make plans for the future. CRV wants to be involved in this planning and help farmers and farm owners to take the right decisions. For CRV it was a challenge to organise the logistics of the products between countries, especially where air freight was involved. Costs increased significantly, but the most important thing for us is to keep the supply of our goods to our customers going. As international travels came to a complete stop, all contacts with our customers took place in a digital way.

During the crisis, CRV has been able to continue its business and serve its customers.

Some important lessons learned:

·         To continue business in times of crisis, we need creativity, cooperation and persistency;

·         Stay in close contact with the customers and make things work;

·         Personal contact is important, but within good relationships things can also work well from a distance.


“Uncertainty is the only certainty there is, and knowing how to live with insecurity is the only security”

                                                                                                                               John Allen Paulos

Lesson 5. Agility

The COVID-19 pandemic came and conquered the world within a few weeks. According to recent figures from John Hopkins University (www.coronavirus.jhu.edu), the virus globally hit 21.6 million people with over 775,000 deaths within about 8 months. Many governments responded to this with unprecedented interventions. The effects of these interventions were huge as many of us have experienced.
The last time that we as humans had to deal with such a pandemic was in 1347-1351, a long time ago. The Black Death (bubonic plague) had a huge impact on mankind as well. Entire cities and villages where completely wiped out and the way of living that people were used to before the epidemic was incomparable with the situation afterwards and therefore not of much use. More recent outbreaks were Ebola in Congo. Other major disasters, floods, tornados, volcano outbursts, wars, all these led to a huge number of people having to adjust to new situations.
In our time, the pandemic also has a major impact, although in another way. Most countries went into a kind of lockdown, as a result of which many public services, such as restaurants, public transport, sports clubs, etc. where closed. It was the largest lockdown of the out-of-home establishments ever in human history. Even during the great wars, restaurants remained open.
Dairy is an important ingredient for this out-of-home food chain. This came to a complete standstill and had a huge effect on the sales of flavoured dairy drinks, cream, butter for cooking, etc. Just think, for instance, of the enormous quantities of coffee creamer cups, small portions of cheese, single slice packs, ice cream and lots of other things consumers use in airplanes and other forms of transport. ‘On the go’ became ‘stay at home’. In general, this involves relatively profitable products, so the companies that are fully dependent on this route to market and cannot compensate any losses with other product-market combinations have suffered a strong decrease in their sales.
Case study Cheese UK:
It has been a tough few months for British cheese makers, but one company has a more positive perspective for the future thanks to its switch to e-commerce and the way it sells its products. Bath Soft Cheese Co lost more than 50% of its business when the corona crisis forced restaurants and cafes to close, leaving it facing an uncertain future. Besides a drop in orders, the company also had to close its brand-new café at its home town, but at the same time it had to make sure that the work on the farms continued. In its attempt to survive the unprecedented challenges it was faced with, the company launched a simple cheese selection for home delivery and also created a grocery home delivery scheme for its village and the nearby rural area. Essentials were sold from their shops. In this way, the company managed to survive.
Lesson learned:
When business gets tough, we have to show flexibility and adjust ourselves to the new situation.


 “Do not put your eggs in one basket”

                                                                  Warren Buffet

Lesson 6. Portfolio management

Milk is generally processed into many different dairy products, which are sold to consumers. During the pandemic outbreak, the value of well-balanced portfolio management has become quite clear to dairy processors. One singe portfolio makes a company vulnerable, for example a cheese producer selling 80% of its products to little cheese shops in big cities which mainly have tourists as their customers. Because of the lockdowns, tourists stayed away and sales dropped by over 80% in many countries.

Extreme examples were seen in Spain, but also in the Netherlands and Italy. Some food producers have a chain of shops in big cities as their main route to market. If 90% of the sales is covered by dedicated food stores in cities, in which again 90% of the shoppers are tourists, the sales will drop dramatically by 80% or more. The costs of the prime locations and employees continue but no cash comes in. This could be dealt with for a few weeks or months, but a longer period will bring even the most robust business close to bankruptcy.

Buying locally produced food has been a trend for many years already. In more rural regions, such as Uganda, Ghana and Turkey, this is already quite common practice. This in contrast with fast growing cities like Mexico City, Jakarta, Lagos or Cape Town and large cities in China. Here western junk food is getting more and more popular the rise and with this the dependency of ingredients for this type of food.

The key learning from this is therefore that a broad portfolio makes less vulnerable.

 

“Owning is owing, having is hoarding“

                                                                  Ursula K. Le Guin

Lesson 7. Hoarding

Hoarding is of all times. The earliest reference to hoarding is found in Dante’s Inferno, an epic poem written in the 14th century. It is interesting to see how people in various nations respond in different ways.

Hoarding is called ‘hamsteren’ in Dutch and this refers to the hamster. This little creature tends to collect as much as possible feed in its mouth and the space behind its cheeks. It collects the feed for times when less food is available, like bees collect nectar for the winter. Squirrels show the same behaviour.

The developed countries have not seen a lack of food for 75 years. During and shortly after WW II, there was indeed hunger in Europe and a lot of people starved. Some elderly people who went through the WW II period, still tend to keep an extra storage of food for emergencies. The younger generations, however, have never experienced periods of food scarcity. Actually, due to urbanisation the households have become smaller as many singles or couples are living in smaller houses with less space for storing food and small refrigerators to keep food for only a few days. Due to the 24/7 economy, it is not necessary to store food for more than a few days and there is just not enough space to keep it. Additionally, people living in cities tend to eat more often in restaurants, order fast food and make use of food delivery services.

When a lockdown was eminent or announced in a lot of countries, especially the people in the cities started hoarding. The alarming news reports made a lot of people afraid of finding empty shelves in the shops and they started hoarding. This led to a herd reflex, which indeed resulted in empty shelves. The type of hoarding varied per country. Some extreme examples were the long queues in front of the coffee shops in the Netherlands to score some cannabis. In the USA, a lot of people bought guns and ammunition, probably because they were afraid of riots and looting. In some countries, like the UK and rest of Europe, large amounts of toilet paper where bought and stored at home. Apart from these extremes, people showed a tendency to hoard products with long shelf lives, such as rice, wheat, long-life dairy, and beans and vegetables in tin cans. After two or three weeks, the panic buying decreased and most people seemed to be saturated. The emotional panic and chain reaction meant a huge challenge for the shops, retailers and suppliers. A 24/7 response was needed to keep the shops supplied. All this in a period in which people had to be extra careful to avoid infections and this consequentially led to inefficiencies. By now, this shoppers’ behaviour has returned to normal in most countries. In some countries where food availability is an issue even under normal circumstances, some looting-like incidents still occur.

Will we be able to prevent such hoarding in the future? Probably not. As already mentioned, it is of all times. The good news is that people remained quite confident about the economy and did not run to the banks to empty their accounts, as happened in the Netherlands in 2013, when a large bank was in trouble and had to be saved by the government.

The main lessons the dairy industry can learn from this is that we must be able to quickly respond, to shift production to long-life products or to increase the capacity to meet the consumers’ needs.

 

“Who feeds a hungry animal, feeds his own soul”

                                                                                 Charlie Chaplin

Lesson 8. Feed and fodder

More and more countries have intensive farming: large-scale farms that do not produce their own feed and/or do not apply outdoor grazing. Some of these regions have problems with the supply of feed and fodder, especially when these have to be imported from abroad. Countries having their own feed and fodder production or outdoor grazing seem to be less vulnerable. In the Netherlands, the overall effect of COVID-19 on the farm milk price is estimated to be around minus 1 euro per 100 kg milk (ca. -3% of the farm-gate price). (DO WE HAVE A SIMILAR FIGURE FOR CHINA?)

COVID-19 has significantly affected China's feed industry. In the first months of 2020, the impact of the epidemic mainly manifested itself in a blocked international trade, increased import costs and prices, and unstable market expectations. For the long term this will lead to increased uncertainty with respect to imports of feed materials, such as soybeans, fish meal and whey powder. Some international ports have been closed and more than 10 countries have suspended the export of agricultural products like soybeans and corn to China. The changes have caused a significant price increase on feed and fodder and in several cases milk was not collected at all.

Dual suppliership

Most of the more traditional farming models, such as the grass feed models (e.g. the Netherlands, New Zealand and Ireland), experienced less trouble, as these farms often have a storage of fodder for almost a full year additional to having the animals graze outdoor from spring to autumn. Some ingredients, such as soy, became more difficult to obtain or more expensive. During the first half year, a lot of potato growers in the Netherlands were not able to sell their potatoes. The out-of-home business, including restaurants and large catering services, usually make up the main part of the customers, but this route to market came to a standstill during the lockdown. As a result of this, the potatoes where sold to dairy farmers for cattle feed. Other solutions were dual supplier ships, a geographical spread of the origin of the products and different departing harbours.

There are various lessons to be learned from this, such as being fully dependent on feed import leads to reduced reliability and robustness in case of a crisis affecting transport and logistics.

 

“People would rather believe than know“

                                                          Edward O. Wilson

 Lesson 9. Lockdowns and environment

Many countries decided for lockdowns in order to prevent the further spread of the coronavirus to protect their citizens. Although there were different types of lockdowns, ranging from total lockdowns to so-called intelligent lockdowns, the overall effect was a strong limitation of travelling. No travelling by airplane, trains or car except when really necessary, for instance for producing and processing food and transport this to shops. Surely, COVID-19 has brought some environmental benefits, including cleaner air, reduced carbon emissions and some relief for wildlife.

One of the most amazing consequences of the pandemic is the fact that the skies suddenly looked like paintings made in the Middle Ages. Really clean blue skies without white stripes created by passing airplanes. In the last decades, the air has basically become a highway of airplanes drawing patterns which our generations before the 1900s never saw. The clean blue sky is also an indication of some other developments. Traffic by road, sea and air was considerably reduced and industrial activities decreased as well. As a result, the carbon footprint significantly dropped.

In many countries there is a debate going on about which sector is mainly responsible for climate change. The dairy sector seems an easy target to blame. The truth is that transport and industry are the main sources of greenhouse gas emissions. This could also be seen by the short-term effect of COVID-19 and the lockdowns on the carbon footprints of various nations.

It is often stated that dairy is harmful to the environment because of emissions of CO2, CH4, phosphates, etc. During the lockdown, the agricultural sector remained more or less fully operational, but a substantial decrease of the air pollution was seen in countries such as the Netherlands and China during the lockdown.

It was concluded that the lockdowns reduced air pollution around the globe but also that own food production and availability of food is crucial and essential in order to be able to keep providing the people with food during a lockdown.


“When diet is wrong, medicine is of no use. When diet is correct, medicine is of no need“

Ancient Ayurvedic proverb

Lesson 10. Nutritional value of dairy

A Roman poet used the following words in Latin “mens sana in corpore sano“ (a healthy mind in a healthy body). A healthy diet is one of the pillars of this century’s old philosophy.

There is a general consensus and scientific evidence supporting the important contribution of milk and dairy products as part of a healthy diet. Milk and dairy products are excellent sources of calcium, vitamins B2 and B12, high-quality protein and carbohydrates, such as lactose, but they are also rich in magnesium, potassium, various fatty acids and vitamin D. Consumers are aware of the benefits of milk products and other dairy products.

There is evidence that consumption of dairy also has other benefits, for instance protection against weight gain and obesity, cardiometabolic diseases, type 2 diabetes and cardiovascular diseases (IDF, 2019). Including milk and milk products into our daily diet is really beneficial. Most people avoiding milk do not consume the recommended levels of calcium, potassium, vitamin D and other nutrients. The International Dairy Federation (IDF) concludes that there is extensive evidence that daily consumption of dairy as part of a well-balanced diet, strengthens the health of the consumers (source: IDF fact sheet 006/2019-04 – Health benefits of dairy).

It is really interesting to see how different nations respond to the pandemic and deal with the facts. In Pakistan, people used to drink raw (unprocessed) milk, but the government took initiatives in the past to abandon the consumption of this so-called loose milk. However, raw milk is suddenly considered to be a good remedy by the large population. Clearly people are not aware of the danger of drinking of raw milk. In the year 1900, thousands of people died of tuberculosis in the Netherlands (the cows were carriers of the disease and it was spread through drinking raw milk). In China, the demand for dairy increased a lot. Dairy is regarded as healthy because of its nutritional value. The Chinese population is aging fast and nutrition for the elderly is an important focal point for the government with the emphasis on dairy.

What we have learned is that healthy food becomes more and more important.

What trends can we expect in the coming years?

Of course, there will be a life after COVID-19. However, this does not automatically mean that the world will return to the pre-COVID-19 period way of living. There is general consensus among experts and virologists that there will be more of these types of pandemics in the future. Nature is full of viruses like Sars-COVID-19, so the question is not if it will happen again, but when.

At this moment (summer/autumn 2020), the current pandemic is still quite active in the world. Some regions are now experiencing a second outbreak. The main question is when the current COVID-19 virus will be completely under control (contained or vaccines available). All nations will do their utmost to be better prepared to handle similar challenges in the future. Like any human topic, there are three ways to respond to these: attack, hide or defend.

Protectionism

Some countries will hide and develop an even more protectionist behaviour than shown in the past. However, the virus does not stop at the borders and completely keeping out a virus is unlikely to succeed. Moreover, keeping the borders hermetically closed will have a negative effect on the economy of the country involved and affect the export of dairy in exporting countries (including the Netherlands).

Backward integration

Some other countries will want to become less dependent on import, especially for life’s essentials like food. Therefore, backward integration in the agricultural sector, including dairy, is likely to accelerate in countries such as China.

Own feed provision and production

Giant farms with 100% feed supply dependency will need contingency plans for the near future. This will result in more grass-fed systems or direct partnerships with arable farmers.

Locally produced food

Consumers showing a preference for locally produced food already was a trend. Although this was mainly driven by environmental issues in the first place, the COVID-19 crisis is expected to give locally produced food a boost.

Dual suppliership

More companies will draw up policies to make sure they have security and contingency plans for supply in place in case of disasters. Dual suppliership for vital food, ingredients, materials, additives, etc. across several continents is likely to be developed and to become more pronounced. Assessment of the vital functions of society and food availability by governments will be required. Less dependency of import will probably be a priority in the future.

On-line shopping


It is expected that many people who shifted to on-line shopping will keep making use of these services. This will undoubtedly have an effect on the traditional food shops.



Closing chapter

This booklet has an open end. Why? Because we are still in the middle of the pandemic. The virus is still among us and expectations are that it will regularly pop up around us and keep us busy until a properly tested remedy is ready for use (vaccine). However, not only the virus itself will probably keep haunting us for some time, the effects of the interventions, including the lockdowns and their effects on the world economy, will also spread like the virus itself. This will possibly lead to the third wave of effects, including food shortages, hunger, social and political unrest, etc.

All this will be accelerated by low oil prices and, consequentially, loss of income for some countries as well as reduced tourism. Imagine Bali without tourism. Inhabitants of Venice were complaining of being flooded with tourists, but without them the majority of the people has no income and the city will lose its soul without the visitors.
About a year from now, we will be able to come up with more learnings…..


The authors of this booklet are

Prof. Li Shengli
Li Shengli is a Professor of College of Animal Science and Technology, China Agricultural University, Chief scientist of the national modern dairy industry technology system, chairman of the cattle breeding committee of the Chinese Society of Animal Husbandry and Veterinary Medicine, the vice chairman of the China Dairy Association, the director of the Sino-Dutch Dairy Development Center. He graduated from China agricultural university, with a Ph.D in 1996.
Professor Li has more than 25 years of experience in dairy farming, nutritional value evaluation of dairy cow feed, China’s dairy feeding standards, nutritional requirements and regulation of dairy cows during perinatal period, standardized feeding management of dairy farms.
Drs Jeroen Elfers
Jeroen is currently the Corporate Director Dairy Development and Milkstreams. He joined FrieslandCampina in 2004 after an international career with various multinationals like General Electrics, STORK and Rexam in various roles like Human Resources, Mergers & Acquisitions, Cooperative Affairs and General Management. Jeroen is also representing Royal FrieslandCampina in the Sino Dutch Dairy Development Centre (SDDDC) in Beijing and is a board member of the Dutch Dairy Association.
Ing Kees de Koning
Kees is a senior scientist at Wageningen University & Research and since 2011 holds a position as managing director of Dairy Campus, the (inter)national research, innovation and education centre for the Dutch dairy chain, located in Leeuwarden, the Netherlands. He has over 35 years of experience in dairy farming (from Grass to Glass), sustainable farm and cow management, agricultural engineering, milking technology and milk quality, robotic milking, smart farming using sensor technology, quality assurance and food technology. He is also member of several international organizations and is Chairman of the Steering Committee of the Sino Dutch Dairy Development Centre (SDDDC) in Beijing.
Jan Lok MSc
Jan Lok is managing director Global Sales at CRV since 2014. He studied at Wageningen University and Research and graduated in 1987. He has more than 30 years’ experience in the agricultural business worldwide, especially in dairy. Jan is representing CRV in the Sino Dutch Dairy Development Centre (SDDDC) in Beijing since it joined in 2014.
Ing Jan Bobbink
Jan Bobbink is working for more than 36 years in the Agri & Food Business of which more than 16 years as CEO. Jan is CEO of Qlip since 2012. From 1987 till 2001 he worked as a journalist in the Agri sector and was also editor in chief of Boerderij, the leading Dutch farmers weekly magazine. Jan’s international experience started as of 2007 when he was Vice-president Sales & Marketing Europe of Alta Genetics followed by General Manager Asia for Hypor-Hendrix Genetics.

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