How small dairy farms in Vermont can give themselves a pay raise

When Efficiency Vermont can focus on solutions that save energy while also making small dairy farms more profitable, that’s a win-win. For a small to medium dairy farm, one problem is keeping bacteria levels low in their milk. Lower bacteria levels translate into better milk prices for farmers.

The key to lower bacteria counts is proper sanitization and rapid milk cooling.

Milk leaves the cow at about 98 degrees, and needs to be cooled to below 38 degrees to keep it fresh. During that cooling period, bacteria have an opportunity to grow. The longer it takes to cool, the more bacteria can grow.

The equipment that can cool milk the fastest and most efficiently is expensive, and oftentimes out of reach for smaller dairy farms. Farmers have to balance the cost of new equipment with other ongoing operational expenses. Because they can’t afford this equipment, farmers can’t give themselves the pay raise that comes with higher quality milk.

Milk quality is one of many challenges dairy farmers are facing; but it’s one that Efficiency Vermont can support farmers on.

In response to the economic crisis that came in the wake of the COVID-19 pandemic, Efficiency Vermont worked with equipment installers and distributors to help make high efficiency cooling systems, plate coolers, and heat recovery units more accessible to small dairy farms.

The heart of an effective cooling system is a high efficiency condensing unit (HECU) – a system that provides refrigeration to chillers, bulk tanks, and other cooling equipment used on dairy farms.

Efficiency Vermont provided financial backing to help distributors place large orders for HECUs, enabling them to receive volume discounts from the manufacturer that they could pass on to farmers.

Efficiency Vermont also increased its incentive for HECUs, which cost about $6,000-$7,500 per unit. Most small farms need 2 units. This incentive lowers the cost by $5,000 per unit. Efficiency Vermont has dedicated enough funding to help about 40 small and medium dairy farms around the state install HECUs. Farmers will also be able to take advantage of technical support from our staff experts. Additional incentives for new plate coolers and heat recovery systems can further improve milk quality by shortening the time it takes to cool milk.

With these HECUs installed, farmers will be able to lower their energy costs and increase their revenues with higher milk quality. Using less energy in the process, the new HECUs could cut cooling times to four hours or less for certain dairies, down from eight or more hours on farms with older systems. This could result in $10,000 to $20,000 a year in increased milk revenues at some small farms.

Farmers can also apply for low-interest financing through Efficiency Vermont. In addition to paying below-market interest rates, farmers can now defer payments for up to four months. That means the money they save on energy, and the additional money they earn from increased milk prices, can flow right into their operating budgets. This improves cash flow at a critical time for many farmers.

Installing HECUs is also a first step farmers can take toward reducing other costs to make their farms more resilient. That’s because their higher-grade milk can be stored on the farm longer, which allows for less frequent shipping via tanker trucks to the cooperatives.

“Improving cooling systems is a critical step in our longer-term goal of increasing onsite milk storage capabilities,” said Alyson Eastman, Deputy Secretary of the Agency of Agriculture. “Combined with other measures such as larger, more efficient bulk tanks, we can help small dairy farms take a big bite out of their transportation costs. Not only will this help the farmers, it will reduce wear and tear on Vermont’s rural roads and lower greenhouse gas emissions from the transportation sector.”

While investing in more efficient milk cooling systems might be a good place for many small dairy farms to start, there are many other energy efficiency projects they can tackle to save money on energy.

Efficiency Vermont offers many incentives and technical support for more efficient lighting, barn ventilation, farm fuel use, space heating, and weatherization for on-farm housing.

Just like we do for any small business, we encourage small dairy farmers to contact us for a free energy consultation. Our expert staff are ready to learn more about each farm’s unique energy challenges and help develop a plan to meet those challenges.