Will dairy enter Industry 4.0?

Disruptive technologies could help dairy industry


Dairy
Disruptive technologies such as the Internet of Things, Blockchain, and artificial intelligence are all part of Industry 4.0, and Dr Ross McKenzie, founder and CEO of The Startup Business, believes it could help the dairy industry.

Disruptive technologies such as the Internet of Things, Blockchain, and artificial intelligence are all part of Industry 4.0, and Dr Ross McKenzie, founder and CEO of The Startup Business, believes it could help the dairy industry.

Aa

Disruptive technologies such as the Internet of Things, Blockchain, and artificial intelligence are all part of Industry 4.0, and Dr Ross McKenzie believes it could help the dairy industry.

Aa

MICRO-PROCESSING facilities may be the way of the future for dairy producers and regions seeking a more sustainable industry.

Not only is the dairy industry faced with the continual challenge of drought, price, large companies and competition in the marketplace, they have a complex supply chain.

Several parties are involved between the cow and the milk being poured into a consumer's cup of tea.

But this could be left behind if the dairy supply chain starts thinking differently, according to Dr Ross McKenzie, founder and CEO of The Startup Business, Sydney, who is scheduled to present at the CEBIT Expo in Sydney from October 29 to 31.

"We have got to think differently, but not just in pocket. As a competitive strategy, price is the only lever played in the dairy industry - it is a race to the bottom as we know," Dr McKenzie said. "But we need to look at the whole supply chain.

"How can we collectively look at technology across the whole supply chain and by doing so improve welfare of producers, so we don't lose an industry?

"I don't believe it is about building bigger factory farms; the problem isn't with the dairy farmer. They are doing what they can, they are controlling what they can but they can't control the climate.

Dairy farmers are involved in the use of both artificial insemination and artificial intelligence technologies which has allowed them to reduce cows, build better genetics, boost production and improve efficiencies, but they are only the beginning of the supply chain.

"But do they have the negotiation power with companies such as Parmalat?," Dr McKenzie said.

In 10 years time, Dr McKenzie believes Australia will see some very specific dairy industries, whether it is in a particular region of Australia or individual dairy farmers.

"There is going to be producers that are going to say 'Look we are going to change the rules, we are going to look at technology ... and now I am going to look at going direct to the market with my own product and own labelling, and I am going to use a lot of smart technology to be able to do that'," he said.

"In 10 years time you will have that easily, and you will potentially start to see specific brands of milk products in mainstream supermarkets which will have a premium price.

"We have that to a degree now, such as Farmhouse Gold. But the crazy thing about the idea of a premium milk product is - isn't that what milk used to be anyway?"

The current supply chain is broken, it is not giving value to all members of the supply chain, and there is potential for people to take a different approach and bypass traditional supply chain, Dr McKenzie said.

"How can we collectively look at technology across the whole dairy supply chain and by doing so improve welfare of producers, so we dont lose an industry," he said.

"The challenge is it is a complex ecosystem or supply chain with multiple parties. However, if we look at other food products or industries such as microbreweries, stillmills - they are changing rules of the games.

"You don't need to be the large milk production company; you can be a more bespoke manufacturer. It is almost like going back to the old ways, but you can still distribute globally through technology.

"By creating cooperatives and setting up micro-production facilities, they can do their own direct marketing using technology and trade directly to a specific market place.

Technology allows you to punch above your weight Dr McKenzie said, and disruptive technologies such as the Internet of Things, Blockchain, and artificial intelligence are all part of Industry 4.0 that are transforming all facets of everyday life.

"In the past, when we traded, we used to have a verified independent third party, who would be a trusted third party. Disruptive technologies are saying no we don't need that anymore, it removes the middle man," he said.

"When you start to think about that impact, there are a lot of people with skin in the game that won't want this to happen. It will be difficult to implement but it is moving very fast.

In particular Blockchain, the platform the at the cryptocurrency Bitcoin runs on, will allow for traceability of products and will give power in negotiating back to more individuals.

"Blockchain is a technology platform that can be available for all. Whenever a product is passed from one supplier to the next in the supply chain, it allows for transparency that the product is from that original person," Dr McKenzie said.

"It is now being used in logistics, for example in shipping containers and ensuring organic food is in fact that, and traceability of milk from the farm gate is without a doubt possible.

"If I am an organic dairy farmer, producing a premium product and charging a higher price, how can I protect that? I can use technology like Blockchain which when I sell my product and it goes to the wholesaler or retailer, they know they are buying it from me.

"With all the technology, it is also possible to know exactly which cow/s it has come from."

Dr McKenzie said without a doubt, these technologies are also possible in other industries such as the beef and sheep industries.

Technology already there for dairy industry

Dairy farmers are hesitant to race and adopt disruptive technologies, believing it may not be the answer to their industry's issues.

The Little Big Dairy Co's Erika Chesworth said technology was already playing a part in the dairy industry, and it would continue. "These (disruptive technologies and micro-processing facilities) are exciting opportunities for some, but this certainly will not be an option for all," she said.

Aaron and Rikki-Lee Tyrrell with their son Emmett, 4, and their dog at Tyrrells Family Dairy, Invergordon Vic. They are a Lion supplier. Photo: Rachael Webb

Aaron and Rikki-Lee Tyrrell with their son Emmett, 4, and their dog at Tyrrells Family Dairy, Invergordon Vic. They are a Lion supplier. Photo: Rachael Webb

Rikki-Lee Tyrrell who runs the Tyrrells Family Dairy, alongside her husband Aaron, at Invergordon, Vic, said they were always looking for new ways to monitor and improve production as effectively as possible, but within reason of affordability and knowing how well it works.

"Being the guinea pig (of new artificial intelligence) and having it fail, especially in the current climate, makes you hang back a bit," Ms Tyrrell said.

She said the future of robotics on farm was already happening, and was something they would consider.

"Technology has helped farmers in the sense that when they can't afford something, technology takes up the slack. It has allowed for farmers to manage their farm more efficiently ... helping them to step up a notch by applying their skills and time more effectively within other areas," Ms Tyrrell said.

"However it is hard to make changes, with the climate and current hardships in farming and agricultural from policies and governments frequently changing."

With new disruptive technologies and artificial intelligence (AI) entering the industry, she said it could change employment opportunities. "With new technologies, there would still be people behind the scenes making it work, so it would maybe more-so be changing the roles rather than removing them," Ms Tyrrell said.

Traceability is something producers believe consumers have the right to know, but it is already happening, according to new NSW Farmers Dairy Committee chair Colin Thompson.

"Traceability through AI would be an advantage for both processors and consumers, but it is pretty much already happening through barcodes, processors can track the product closely," he said.

Aa

From the front page

Sponsored by