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OK, Hello everyone and welcome.

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I hope everybody is already in the chat.

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Thank you for joining us today for this month’s University of Wisconsin Division of Extensions Badger Insight.

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This is a monthly webinar series offered on the third Tuesday of each month.

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The Badger Insight provides the latest research, dairy based information to improve animal welfare, breeding and genetics, selection, automation and modernization, and nutritional decisions.

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This content is made for producers, dairy workers, managers and agricultural professionals.

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My name is Manuel Pena, I am the bilingual regional dairy educator for the University of Wisconsin Madison Division of Extension in Dodge, Fond du Lac, Ozaukee and Sheboygan Counties.

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We hope to provide this opportunity as a formal, informal discussion on today’s topic.

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As this is a webinar format, please add any questions or comments to the Q&A bottom at the bottom of the screen.

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The webinar is going to be or is being recorded and will be available within a week in our website.

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So for today, our first topic is under Matheus Pupo.

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Pupo, who will be speaking on nutritional strategies to reduce methane emissions in lactating dairy cows, while Chuck, our second speaker, will be discussing the effects of feeding 3 NOP on income over feed cost in the United States.

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Matthews Pupo is a PhD student under under Doctor Luiz Ferreretto supervision.

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His research is focused on the effects of physical and chemical characteristics of the relations on milk component production, feeding the behavior, and methane emissions in lactating dairy cows.

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He earned his Master’s in Animal and Dairy Sciences from the University of Wisconsin, Madison in 2022.

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Then our second speaker is Chuck Nicholson, who is an agricultural economist at University of Wisconsin Madison.

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His research and outreach focus on the economics of dairy farms and post farm supply chains.

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He has a PhD in Agricultural Economics from Cornell University and 30 years of experience not only working in the US but also working in dairies internationally.

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His position at UW Madison is supported by the Dairy Innovation Hub.

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So we’re about to start.

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Please feel free to put any comments or questions in the Q&A feature in the bottom of the screen.

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You guys take over.

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Thank you.

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Thank you, Manuel.

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Thanks also for hearing this presentation with me.

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I’m glad to be here today.

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I’ll talk a little bit about the dietary strategies, but before we jump into that, I think it’s important to understand why is it becoming so important some of the dietary strategies that some of the genetics that people have been working around to reduce methane emissions.

3:01
So let’s jump into numbers.

3:03
So when we think about methane emissions, we are we are talking about 11% of methane representative of all the greenhouse gas emissions nationally.

3:16
And when we think about agriculture per say, we are talking about 10% of US total greenhouse gas emissions.

3:25
But looking looking into that a little bit deeper.

3:28
So you can see in this first row and the fourth row when we’re talking about the enteric fermentation and also the manure management, we can see like that both together can sum up roughly 45% of the methane emissions.

3:46
So when we see more with a little bit deeper into those methane emissions from enteric fermentation, we can see that the main drivers of those methane emissions are beef and Dairy cattle.

4:01
So we can see that the Beef cattle has a large participation and that’s because most of the methane emission comes from enteric fermentation, while Dairy cattle roughly splits half and half with manure and enteric fermentation.

4:16
And then we have some of some other participants like swine or sheep.

4:23
But because we work with dairy cows and it’s the main area of research of my PhD, I’ll focus heavily today on dairy cows and how we can implement some strategies to decrease methane emissions and also further discuss a little bit about the economic impacts of some of these strategies, such as feed additives.

4:54
Not only the amount of the methane produces important, but also when some climate scientists look into the effect of each gas, they look into two different things.

5:08
The first one is the lifetime of each gas.

5:11
So how long does it take to be to be out of the atmosphere?

5:16
And the second thought, the second important sector that we have there is the impact compared with the most prevalent greenhouse gas in our in our world.

5:28
In this case, we have the carbon dioxide.

5:32
So when you look into methane, we can see that the lifetime of methane is actually pretty low compared with carbon dioxide and nitrous oxide.

5:42
But when we look into the the global warming potential compared with carbon dioxide, we can see that it’s 28 times greater in a in 100 year lifespan.

5:56
And interesting, interesting.

5:59
UW actually had this picture and I try to put it here and I’ll try to be briefly brief, brief about that.

6:09
So they compare the potency and duration of the greenhouse gases.

6:14
So in this this Figure 1, we can see three different gases, the CO2, the methane and the nitrous oxide.

6:23
So, so we can see like from the figure to the left to the right, the build up of methane is pretty low, pretty slow because usually because of the time span is around 12 years, 12 1/2 years.

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So it doesn’t build up as it does the nitrous oxide and CO2.

6:43
But then when we look below the figure below here represented as Figure 2, we can see like in 20 years, the effect of methane is 84 times and this effect is a little bit lower in 100 years.

7:00
So here when we are thinking about 20 years, we are talking about an effect of 36% and it goes down to 17% in 100 years.

7:12
So what what does it say to us?

7:16
So methane has a short term impact and because of that we need to deal with that right away.

7:22
So that’s why we are have a bunch of research going on with nutritional management, feed additives and some other aspects that could affect the methane production of these animals.

7:38
But when we think about methane, how is it produced?

7:41
I don’t, I want, I don’t want to go in details, a lot of details for that.

7:45
But basically when the animal consumes the feed and we have the fermentation by the microorganisms and the rumen, we have the production of volatile fatty acids such as acetate, propionate and butyrate.

8:01
And some of what we call byproducts of that is CO2, hydrogen.

8:09
And those either CO2 and hydrogen can be used by methanogens.

8:15
So I don’t want you guys to remember about all the types of methanogens that we have.

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We have a bunch of them that as I listed here on your right.

8:28
But I do want you to understand that the microbes, the methanogens are capable of producing methane by using CO2 and hydrogen, but also they can produce methane by using formade as well as methyl compounds.

8:45
So what can we do to affect this metabolism?

8:51
So methane emissions, manure methane emissions can be affected by several factors.

8:57
So here I listed some of them.

9:02
Not a lot of research is is define the amount of methane that is produced in manure.

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That’s some some of the research that is going on right now in some of the universities such as California.

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But I want to highlight here the importance of the amount of carbon as highlighted in the literature that is important for to increase methane emissions.

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Also the time of storage that the manure is kept is keep on the farm and also if it’s kept, it’s kept in anaerob anaerobiosis.

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So that enhances the methane emission from a manure perspective.

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But when we look into the animal perspective, so we can see that the main driver and is it has been used mostly in the equations to predict methane.

10:00
In most of the universities, we have the dry matter intake.

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So in this paper here which it which was published 15 years ago and it’s still like we have some recent data from Pennsylvania and they also show a similar trend.

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We can see that dry matter intake largely drives the increase in methane emission.

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So on your X axis here, we can see as we increase dry matter intake, we also have an increase in methane production.

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But dry matter intake is not the only factor that is affecting the methane emissions.

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We have several other factors that could impact that such as forage digestibility, fiber and starch levels, lipid supplementation, animal genetics.

10:53
So when we talk about animal genetics, there are some, there are some groups working with that and trying to select lower metered animals.

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Also some of them have been looking into RFI.

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So RFI is basically the, the, the abbreviation stands for residual feed intake.

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So it’s basically the difference between the observed and predicted intake.

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So some of this work has been done to select animals that consume less intake compared with the predicted 1.

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Then we can look into the fiber and starch level.

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So we know that starch is important in the rumen and because it can produce propionate and propionate works as a hydrogen sink which damage the hydrogen availability for methanol that in this way we have a reduction in in a methane also forage digestibility has been shown to increase to decrease methane emissions.

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So some of the opportunities that we have with BMR and also producing some of the forage without better quality would also impact methane production.

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And some people have seen some effect on lipid with lipids fermentation as we can increase the biohydrogenation so we can use as a hydrogen sink as well.

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So this is a nice actually UW Extension article that I put here to show the overall and a summary of the effects of what I just listed in the previous slide.

12:41
So you can see that some of the effects that we have for the low forage with decreased enteric methane emissions.

12:51
And what is nice about this summary is like the the reductions in a scale from 150 cows and a thousand 1500 cows.

13:04
So this is actually interesting because we can see some of the reductions, although we have some some of the reductions for methane emissions, there is like there are some counter effects.

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So for example, when we see like the high fat strategy, we can see an increase in feed production, for example.

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And also some of the farmers will be impacted by that since fat is an expensive ingredient.

13:32
So that that’s something I think it’s going to be probably the objective of this, of this presentation to show that although we have some strategies available, we need to understand what are the impacts besides methane emissions, what are the impacts in profitability, what are the impacts on performance?

13:56
And actually Claudia in 2022 and colleagues, they did a nice meta analysis where where they collected around 100 peer reviews and they had over 430 treatment means.

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And they divided basically they strategies in three different categories.

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So they had the animal and feed management, they had the diet formulation and they had the rumen manipulation within those categories.

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They divided in different subcategories.

14:30
I won’t spend much time with that because otherwise we would be a long presentation.

14:36
But it was interesting to see here and I want to highlight that some of the they strategy dietary strategies by changing management.

14:46
So when we see the increase in feeding level, we can see a decrease in intensity, methane intensity for milk of about 20%.

14:56
Changing the harvesting time also decrease the methane intensity for milk and also changing the forage to concentrate ratio was important to decrease methane intensity either for weight gain or for milk.

15:13
Another interesting, interesting finding of this this review was about the feed additives and it was actually one of the limitations of the the this meta analysis because they put together the methane inhibitors as a one category.

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And I will show you later why we cannot do that.

15:35
Although they it was like the way that they find they found to be easy to get done.

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But why we should consider each feed additive independent.

15:48
So we can see here that the absolute reductions from the inhibitors and some of the other feed additives we have a greater potential for methane reduction.

15:59
Although we can see a greater potential for that, one of the conclusions that they found was actually that either strategy alone when we we’re talking about feeding level only or either only methane inhibitor, we cannot achieve the target level to decrease 1.5°C by 2030.

16:24
So what they suggest actually is to adopt at least two different strategies combined so we could achieve some of the targets that we have to reduce methane emissions and also reduce the impact in the global warming.

16:41
So I mentioned previously why we couldn’t, I think we couldn’t put together and consider all together the feed additives.

16:51
And that’s why so that this is how it works from Ermias and Feng in 2021.

16:58
And it’s interesting to see like the different effects of the of the different feed additives.

17:04
So we can see a large potential of seaweed.

17:07
So here we have these paradoxes and then the effects kind of become become lower when you go down the the figure.

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So we can see like the effect of Monensin is way lower compared to the seaweed today.

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I’ll try to focus a little bit more on seaweed and 3 NOP, because when we look into some of the efficacy, when you’re thinking about not only the methane reduction potential, but also the amount of research that people have done, it makes way more sense to focus on those two.

17:46
As we can see here and highlighted by Hegerty in 2021, we can see that 3 NOP inspired asparagopsis have shown a great potain methane reduction potential.

17:58
So 3 NOP has shown about 30-35% of methane reduction.

18:05
And when we are looking into asparagopsis, there are some work, there are some work research actually showing around 50% which is not actually cooperated in literature.

18:19
I, I still think we need way more research on that in and in long term trials.

18:26
But that’s what the, the information that we have now.

18:30
And also because we have some confidence mainly with 3 NOP right now, because most of the research conducted in Pennsylvania and some other areas, we have some different trials and we already have a long term, long term trial.

18:47
Although I still also think that we, we need to do a little bit more research on that in long term feeding trials.

18:58
So that’s why today I’ll talk a little bit more about those two feed additives.

19:04
So when we look into asparagopsis, we can we can see that most of the mechanism, mechanism of methane reduction, we rely on some of the secondary compounds.

19:17
So the most important ones are the bromo form and the bromo bromochloro methane.

19:25
So those two will be important because they will act on on the on the reaction of methanogenesis and it will decrease the formation of methane.

19:40
However, as I mentioned previously, not a lot of research has shown like a long term effect of asparagopsis.

19:49
Actually there is a trial that show last year that the effect was diminishing around over time.

20:00
And because of that, I do think that we need to to look deeper into some of the effects of feeding Asparagopsis.

20:12
3 NOP on the other hand, we have what some of way more papers compared with Asparagopsis.

20:20
Also because it’s a little bit easier to feed the animals, usually Asparagopsis requires a lot of harvesting, it’s expensive.

20:30
So 3 NOP is a little bit easier compared with asparagalopsis and mainly acts in the I don’t want you guys to remember that, but mainly acts in the last step of methanogenesis in this enzyme here which is the material coenzyme M reductase.

20:50
So whenever this three NOP binds to this enzyme, there is a, there is a decrease in the methane production and this last step is inhibited.

21:04
But although we can see some of the effects for example in in the methane emissions of the animal.

21:12
So here is a is our study that took Doctor Luiz and I conducted this year and is under review.

21:21
So keep that in mind, we can see that when we have the supplementation of 3 NOP, we can see a decrease in the methane emissions of around 120 grams per day.

21:39
So here we can see that each study, so we had 15 studies and each of these studies we can see different size of the diamonds which represents the weight of each study.

21:53
So it looks like the train of heat is really consistent when we are thinking about methane reductions.

22:01
But we still don’t know a lot about the performance of these animals and how the dissipatives impact the milk production, the energy corrected milk and some of the other metrics that are also important when we are looking into the business of the farm.

22:22
So what is interesting here and I wanted to highlight and I’ll give the word to Chuck that will show you about the economic part of that.

22:33
And I really like this sentence that highlights that none of the currently available additives can consistently offer a productivity game to justify the feeding the additive across ruminant production systems.

22:47
So that that shows actually, although we have like a high concern with the methane production of farm, we still need to be cautious about how this will impact the performance of the animals and overall the the profitability of the farm.

23:06
And because of that, I think Chuck will show you now some of what we are looking into and what is important to consider whenever we adopt any strategy on farm.

23:22
OK, Yeah, thank you for that.

23:24
Matheus, if you want to go ahead and and advance to the the next slide, I think since you have control of the the slide deck, that’d be great.

23:32
So thanks for providing that really nice introduction to some of the basic biology and the importance of thinking about methane emissions reduction and enteric methane emissions reduction and dairy cattle.

23:45
And I think this is a really nice example of some of the cross disciplinary, some cross conversations between animal science, animal nutritionists and folks like me who focus a little bit more on the economic component of this.

24:03
So it was mentioned earlier that my position is supported by the Dairy Innovation Hub in this particular project that we’ve been working on as a collaboration also received support from the Dairy Innovation Hub.

24:14
So I want to make sure that we thank them for that and making this possible.

24:19
And I think it also speaks to the idea that one of the motivations for having a hub is to identify a strategies that are going to be providing benefits to dairy producers of various different kinds.

24:34
And so one of the benefits that I think of is important in the conversations that I have with both dairy producers, but also people further down in the dairy supply chain really concerns the combination of sort of biological impacts with the kind of farm financial impacts.

24:54
And so Matheus just ended up with a slide that said we have no good evidence for a lot of the methane reduction strategies having a productivity gain that sort of provides an offset to the use of a feed additive.

25:12
And that leads me to kind of pull up this slide and say we need to really think about how the money works.

25:19
What’s the business model, if you will, for reducing enteric methane emissions through feed additives or through other approaches.

25:29
So what I’d like to do is to talk a little bit about the approach that we would use to assess this.

25:35
As Matheus mentioned, we have done research.

25:38
It’s all written up.

25:40
We are actually mostly waiting for the OK of the the reviewers of the papers to be able to make a more formal announcement of this.

25:48
And that’s why we’re being maybe a little bit less detailed about some of the results.

25:52
But we’ll be happy to share those once we have what we hope will be the approval to go ahead and publish that and make it more broadly available.

26:01
So Matheus, if you can go to the next slide, please.

26:05
So for a person like me who thinks about sort of the farm financial performance and the economics of this, it’s important to think about how do we evaluate the kinds of approaches that a feed additive would represent.

26:21
And one way that’s relatively easy to do and fairly commonly used is something that we call partial budgeting.

26:29
And in that what we’re going to do is look at the the economics or the financial implications of only the things that we are changing in a feed ration or on a dairy farm.

26:41
And that means we can kind of hold the other things that we’re not changing constant.

26:46
And that sort of simplifies the kind of information that we need and the analysis that we need to do.

26:51
So in the case of thinking about strategies, especially feed additives to reduce enteric methane emissions, we can think about the benefits that in this case we’re talking about the financial benefits of using a practice, using 3 NOP as an example.

27:09
And we typically break those benefits down into two categories.

27:13
They might be increased revenues.

27:16
An example of that might be if a farm actually receives some kind of carbon related payment or another benefit would be that we have lower costs.

27:25
As an example, that might be that we have some lower feed intake and therefore a lower feed costs per 100 weighted milk.

27:33
We also want to balance that by looking at the potential costs of using a feed additive like 3 NOP.

27:40
And we might have some increased costs that would be including the actual cost of buying and putting into the ration the feed additive itself like 3 NOP.

27:53
And another cost of adopting a strategy like that to reduce methane emissions would be that perhaps we have some decreased revenues, we might have decreased milk yield and we might have decreases in milk components.

28:07
And most dairy farmers in this part of the world get paid on the basis of the components in milk, not the overall milk.

28:13
And so we can think about the net of financial impact for the economic impact as looking at the changes in the revenue side and looking at the changes in costs.

28:25
So if we have increases in revenues and decreases in costs, that’s a pretty clear win.

28:32
If we have decreases in revenues and increases in costs, that can be kind of a pretty clear negative net impact doing that.

28:41
And then if we have any of the other possible combinations, we have to scratch your heads and and work the numbers in a little bit more detail to be able to tell us what those actual outcomes are.

28:52
So Matheus, if I can have you then go to the next to the slides.

28:57
So from the work that Matheus has done and then adding in a kind of a financial or an economic analysis component we can put in more specifically into those four different boxes there, the two benefits boxes and the two costs boxes.

29:15
What we think the the evidence to date shows us about the likely impacts.

29:21
And to do this, we actually looked at the milk yields, the milk components, we looked at the prices of those dairy components over a 10 year period of time because those of you who are producers know that there can be a great deal of variation in milk prices and the components that drive those milk prices over a period like 10 years.

29:45
And then we also tried to account for the variation in feed costs.

29:48
And we’ve actually seen quite a lot of that in recent years as well, a little bit lower recently, but pretty high a couple of years ago.

29:55
So when we look at the evidence over a 10 year time span that accounts for the values of milk components, accounts for the value of feed, accounts for the cost of actually having an additive like 3 NOP into the ration.

30:10
We can better understand through a table like this what the likely impacts are are here.

30:16
So for our analysis, we did not include any potential sources of increased revenues.

30:23
So that’s why I have none there in that particular box in the upper left.

30:27
I’m going to talk in a minute about what are some of the things that might actually make that go from none to actually a benefit to dairy farms.

30:35
We did see in the studies that Matheus reviewed lower feed intake, so lower dry matter intake.

30:41
That would be in some sense a decrease in the cost of feed for for an animal.

30:48
We noted increased cost of the actual feed additive and here we don’t have a great deal of data.

30:55
So we use the available information that we have from a couple of different studies and price quotations to look at that, but didn’t spend a lot of time thinking about how that might vary over time.

31:06
And then we also noted from the studies that Matheus reviewed that there was decreased milk yield and decreased butter fat yield.

31:14
And so the basic idea that we come to is we end up with some kind of lower revenues because we didn’t have any increase, any sources of increase and we had decreased revenues because of lower milk and butter fat yields.

31:32
And we had a little bit higher cost because of the actual cost of the additive that was not quite offset by the costs for lower feed intake being decreased.

31:45
And so when we look across the four different boxes there and we think about a feed additive like 3 NOP, our financial analysis to date indicates that the net impact without any kind of external support or payments to farmers would be negative.

32:02
And the basic bottom line in that is we have some reduced revenues and we don’t have enough of a decrease in costs to completely offset that.

32:12
So the strategy appears to be beneficial in terms of reducing methane emissions and Matheus showed you some, some nice numbers that I should talk about pretty substantial reductions in methane emission.

32:24
But the financial analysis suggests that those reductions in methane emissions would actually be paid for by lower farm profitability.

32:36
So that’s kind of an important point and it’s one of the values that we add by being able to combine sort of the animal nutrition side, the dairy nutrition side with the farm financial of the economics component.

32:49
So Matheus, if you can go to the next slide then.

32:53
OK.

32:54
So I mentioned earlier in looking at this set of four boxes that we didn’t see or didn’t include in our analysis, at least to date any increases in revenues.

33:06
And so the question is, is there any way in which that might actually happen?

33:11
And it turns out that the answer is yes, or at least maybe in some cases, milk buyers have provided price premiums for documented lower carbon footprints, not a super common thing in my experience, at least here in the upper Midwest, but at least as a possible offset to some of the higher costs associated with this.

33:38
And I think actually it’s something that we’re likely to see a bit more of going forward in the future as food companies in particular become more concerned about documenting beneficial environmental impacts going all the way up their supply chain to the dairy farms.

33:54
Another possibility that has been undertaken to a certain extent is actually selling what we call carbon credits.

34:02
And that’s basically a way of saying if you have reduced carbon by a certain amount, there’s a marketplace that you can go to that will actually compensate you that will verify the claim that you’ve reduced carbon.

34:18
And there are traders on either side.

34:20
There are typically food companies who want to buy these carbon credits so they can make a claim that they are involved in the process of reducing greenhouse gas emissions.

34:31
And there are sellers of those credits who are farms and other businesses who are the ones actually implementing strategies to reduce methane emissions.

34:40
So either of those two are the primary ways in which you might provide additional support to dairy farms to at least minimize, if not completely mitigate kind of the negative farm financial impacts of using an additive like 3 NOP.

34:57
So if I can have you go to, I think what is the last of my slides here?

35:02
Yeah.

35:03
And these are just a couple of examples of ways in which those offsets for carbon can be credited to dairy farmers.

35:13
Back earlier in 2024, at the beginning of the year, there was actually a news announcement coming out of Dairy Farmers of America, the major, a major US dairy cooperative, that they are actually now offering their farms the opportunity to participate in these carbon credits.

35:30
And so they actually talk about the, the overall magnitude.

35:34
And these can not be just through like use of a few additive like 3 NOP, but other practices on the farm that would reduce overall greenhouse gas emissions.

35:44
And then also one of the main places in the US where these carbon markets are active are actually out in California.

35:51
There’s a state oriented market out there.

35:55
And the graph that you see down in the bottom right is actually showing you.

35:59
And it’s probably a little bit hard for you to see the numbers on there, but it’s basically just trying to talk about the fact that there are markets that are valuing these carbon credits that do have mechanisms by which dairy farmers can contribute.

36:12
The green line you see there a little bit lower line is the cap and trade carbon payment actually out in the California markets.

36:21
The European Union actually has a much better developed and much more used in agriculture set of carbon credits and they have a little bit different pricing structure there.

36:32
And it’s a little bit hard to translate that just to the base of the graph into a like a farm financial impact.

36:38
The basic bottom line is that carbon credits or price premiums would likely go a long way towards offsetting the costs or the loss in revenues that dairy farms would experience by using a product like 3 NOP.

36:53
So that’s kind of what I wanted to add value to here is to think about the the farm financial components of that.

37:01
And I think we have actually a really good amount of time for questions that have come in while we’ve been talking.

37:06
So thanks very much for listening.