Modern Dairy Water Management Practices
Modern Dairy keeps a watchful eye on the water stress risk and changes at all operating sites. Based on regional characteristics, impact of water consumption, local regulatory requirements, water resources characteristics, and the actual conditions, the Company, referring to official documents such as the 2021 China Water Resources Bulletin and the 2021 China Environmental Status Bulletin, has applied the WRI water risk map model to assess risks of water resources scarcity and water quality during the productive process, and drawn the water pressure assessment map. The Company tracks water resource risks in the operating areas in a timely manner based on the water pressure map and has developed targeted prevention and control measures to guide the planning and layout of the project.
Modern Dairy’s water consumption by region in 2023:
| Region where the farms are located | Total Water Consumption in 2023 (tons) |
|---|---|
| Saibei Region | 3,449,302 |
| Northeast Region | 1,226,736 |
| Chabei Region | 1,006,146 |
| Northern China Region | 1,701,268 |
| Central China Region | 2,461,768 |
| Eastern China Region | 3,515,908 |
| Bayan Nur Region | 421,253 |
| Northwest Region | 1,614,334 |
| Inner Mongolia Region | 1,646,388 |
| Total Water Consumption | 17,043,1021 |
Note1: Compared to the water consumption data statistics in the 2023 ESG report, we have expanded the water consumption statistics to include 7 new farms added in 2023, resulting in an increase in total water consumption.
In 2023, for Modern Dairy:
- 54.88% of total water consumption came from high water risk pressure areas.
- The proportion of milk production in water-scarce areas was 53.12%.
- The proportion of silage procurement in water-scarce areas was 50.18%.
- Water-related capital expenditure: Modern Dairy has implemented a series of water-saving measures to reduce water consumption and improve water use efficiency. In 2023, the company invested 1.8 million RMB to install precision sprinkler systems, which significantly improved irrigation accuracy and effectively saved 29,661 tons of water.
Water conservation:
- Precision sprinkler: We have implemented precision sprinkler systems in all 18 of its southern farms. These smart systems monitor environmental parameters within the barns, such as temperature and humidity, and automatically adjust the operation of the heat-activated sprinkler system accordingly. This reduces water waste. Since the implementation of these systems, water conservation has significantly improved, with a 39% reduction in water usage and a 10% reduction in electricity consumption compared to pre-installation levels.
- Pre-Milking Hygiene Optimization: In 2024, we introduced an innovative detergent containing enzymes and plant extracts specifically designed for cleaning udder towels. This new detergent requires only a “wash and rinse” cycle, unlike the traditional “wash and double rinse” method. While delivering superior cleaning performance and reducing foam production, it also enhances towel softness. This optimization saves approximately 10 cubic meters of water per day for every 10,000-cow dairy farm, resulting in an estimated annual water savings of 90,000 cubic meters for the company.
- Smart Irrigation Technology for Forage Production: Our forage land utilizes intelligent water valves equipped with automatic pressure regulators and automatic backflush devices, ensuring balanced pressure output and optimal irrigation efficiency. Through an intelligent water-saving mode, high-flow drippers deliver low-pressure, low-volume irrigation, effectively reducing water quality requirements at the source and improving clog resistance. Automatic pressure balancing ensures consistent pressure across the entire field, enabling frequent, small-volume irrigation for precise control of water and fertilizer application. This intelligent system can promptly detect and report malfunctions, preventing unnecessary water and fertilizer waste caused by prolonged damage to the drip irrigation system. Compared to traditional irrigation methods, this system achieves water savings, electricity savings, and fertilizer savings of 25-30%, 25-30%, and 10-15% per acre (or hectare if that’s your unit of measurement - please specify), respectively. It also precisely controls soil moisture content, ensuring uniform seedling emergence and increasing emergence rates.
Water Recycling:
- Wastewater Reuse and Treatment: The Company recycles the cleaning water from milking machines in the milking parlor, using reclaimed water instead of fresh water for flushing the holding area and manure transport pipelines. Approximately 9.78 million cubic meters of wastewater is recycled annually. This wastewater, together with water from the precision sprinkler system and cattle manure, is collected in fermentation pools for treatment. Following solid-liquid separation, the solids are used as bedding material, and the liquids are used as fertilizer.
- Rainwater Management: The Company strictly implements rainwater-sewage separation and promotes comprehensive utilization measures. The drainage system is rationally designed to separate rainwater from sewage, preventing pollutants carried by rainwater from entering the treatment system. The farms have rainwater collection ditches along the roads and rainwater collection ponds within the premises. The collected rainwater is partially used for irrigating surrounding land, while some is discharged into surrounding surface water bodies through drainage channels, effectively preventing overflow of sewage pools during heavy rainfall. Additionally, rainwater mixed with manure enters the manure fermentation system and is later used as fertilizer for field application. This approach achieves resource recycling while reducing negative environmental impacts.