Modern Dairy Food Loss and Waste Reduction Policy

1. Purpose

Modern Dairy is committed to sustainable development and deeply understands the negative impact of food loss and waste on resources and the environment. We strictly adhere to national laws and regulations such as the “Anti-Food Waste Law of the People’s Republic of China” and actively respond to the policy spirit of the “Grain Saving Action Plan” and the “Grain Saving and Anti-Food Waste Action Plan.” To this end, we will continuously optimize and implement strategies to reduce food loss and waste across the entire value chain, including feed production, raw milk acquisition, and transportation and delivery. By improving resource utilization efficiency, we aim to promote the sustainable transformation of the industry through practical actions.

2. Food Loss and Waste Reduction Plans and Practices

We will implement multi-dimensional and comprehensive strategies, starting from the life cycle stages of food, to effectively reduce food loss and waste.

2.1. Raw Material Acquisition and Feed Production Stage (Feed Loss and Waste)

Precise Feed Formulation and Feeding Management:
- Based on the breed, age, weight, and health status of cattle, we precisely formulate personalized feed recipes and adjust the type and quantity of feed allocated to ensure that all cattle groups receive optimal nutritional balance, while avoiding unnecessary feed input.
- Each farm utilizes automatic feed pushing robots to quickly and accurately complete feed pushing tasks according to the actual needs of dairy cows, ensuring that cattle can always access fresh feed. This effectively avoids feed waste caused by traditional manual feeding due to experience and manual operations, and promotes refined farm management.
- By strictly controlling the standard for leftover feed and monitoring cattle feeding behavior, feeding quantities are adjusted in a timely manner to minimize feed residue and waste.
Promoting Low-Protein Diet Technology:
- While ensuring the nutritional needs of animals, we optimize feed formulations to reduce crude protein levels and scientifically supplement synthetic amino acids. This improves the absorption and utilization efficiency of nutrients in feed by the cattle, reduces resource waste caused by unabsorbed protein excreted in feces and urine, and lowers nitrogen emissions.

2.2. Production and Processing Stage (Raw Milk Loss and Waste)

Raw Milk Production Process Control:
- Optimize the entire raw milk process control, implementing refined management at every stage from milking, collection to initial storage.
- Strengthen source control, regularly maintain and upgrade milking equipment to ensure equipment operating efficiency and stability, reducing raw milk overflow, leakage, or contamination due to equipment failure or wear.
- Through employee training and standardized operations, ensure precise operations, striving to achieve the goal of “zero loss” of raw milk.

2.3. Operational Process Stage (Employee Meal Waste)

Advocating “Clean Plate Campaign” and Enhancing Environmental Awareness: Promote the “Clean Plate Campaign” within the company through multi-dimensional publicity (e.g., DingTalk system, WeChat official accounts, video playback, promotional slogans, etc.) to guide employees to cherish food, refuse waste, and enhance food saving awareness.
Optimizing Menu Structure and Ingredient Utilization: Reasonably match dietary structures, select local seasonal vegetables, innovate dish varieties, and make good use of ingredient value to ensure the freshness and nutrition of dishes while reducing ingredient waste.
Alternative Uses for Food Loss: Reutilize fresh milk not consumed by employees daily for dough making, producing noodles and bread for employee meals, achieving resource recycling and maximizing value.

3. Collaboration with Upstream/Downstream Partners

3.1. Upstream Collaboration: Reducing Waste and Environmental Impact in the Feed Supply Chain

Developing Alternative Raw Materials and Optimizing Feed Formulations: We actively collaborate with upstream feed raw material suppliers to promote and procure alternative raw materials such as low-double rapeseed meal to partially replace traditional soybean meal. This not only reduces reliance on traditional high-carbon footprint feeds, lowers the risk of deforestation and resource consumption associated with soybean cultivation, but also reduces feed resource waste and environmental impact from the source by improving feed utilization efficiency and inhibiting methane production.

3.2. Downstream Collaboration: Optimizing Raw Milk Transport for Quality and Loss Reduction

Specialized Transportation and Packaging Optimization: In raw milk transportation, we insist on using specialized milk tankers, without additional packaging materials, fundamentally eliminating packaging waste and related resource waste, and ensuring the sealing and hygiene of raw milk during transportation.
Full-Process Constant Temperature Control System: We work closely with logistics partners to build a strict raw milk insulation transportation system. Raw milk is rapidly pre-cooled to 2-4℃ before leaving the farm and loaded into specialized transport tankers with high-efficiency insulation materials. The tankers themselves have excellent insulation performance, which can maximize the maintenance of the raw milk’s low temperature, effectively preventing quality degradation and loss due to temperature rise during the entire transportation process from the farm to the processing plant, ensuring the freshness and safety of the raw milk.
Intelligent Logistics System Optimization: Improve the logistics system by embedding GPS technology to achieve real-time tracking of vehicle trajectories and precise planning of transportation routes. This effectively shortens transportation time, reduces the risk of raw milk exposure and potential quality degradation during transit, thereby controlling raw milk loss caused by improper transportation.

4. Recycling Program

To minimize the environmental impact of its production activities, Modern Dairy pays close attention to the waste generated during its production and operations and its management. We strictly adhere to laws and regulations such as the “Measures for the Management of Hazardous Waste Transfer,” continuously implement internal management policies such as the “Waste Oil Recycling Management System” and “Equipment Management System,” and formulate detailed waste management plans to ensure the standardization of waste classification, separation, and recycling operations. For various types of waste, the company establishes waste ledgers, simultaneously registers disposal information with environmental protection departments, and hands over waste to qualified recycling units for centralized treatment.

The company does not involve landfilling. Unrecycled waste engine oil is handled by qualified third parties. Farms primarily dispose of diseased and dead cattle through harmless treatment or safe landfilling by entrusting qualified units, to prevent environmental pollution.

4.1. Hazardous Waste

The hazardous waste generated by the company mainly includes medical waste, laboratory waste liquid, and waste engine oil. We strictly comply with relevant laws and regulations, formulate hazardous waste management plans, establish ledgers, and set up dedicated disposal or storage sites. All hazardous waste is transferred and treated in cooperation with qualified third parties to ensure compliant disposal.

Medical Waste and Chemical Waste Liquid: We follow standards such as the “Technical Specifications for Centralized Disposal of Medical Waste (Trial)” to standardize the storage of medical waste and laboratory reagent bottles, and optimize laboratory chemicals, selecting high-purity products to reduce waste liquid generation. By upgrading silage quality inspection from chemical testing to infrared physical testing, and by preventing cattle diseases, we reduce the amount of medical waste generated per head of cattle.
Waste Engine Oil: Each farm regularly inspects and maintains equipment to prevent waste engine oil leakage. Waste engine oil is recycled within the farm, for example, for lubricating vehicles, anti-corrosion of cattle shed scraping systems, and treatment of skin diseases at the base of cattle tails. The unrecycled portion is handled by qualified third parties.

4.2. General Solid Waste

The general solid waste generated by the company mainly includes manure or digestate, diseased and dead livestock from farms, and domestic waste. We adhere to the principle of “use where appropriate, full-process control” for the reasonable recycling and disposal of waste.

The general solid waste generated by the company mainly includes manure, digestate, diseased and dead livestock from farms, and domestic waste. We adhere to the principle of “use where appropriate, full-process control” for the reasonable recycling and disposal of waste.

Digestate or Slurry: In terms of manure treatment, we have pioneered the industry-leading “forage planting—dairy farming—manure treatment—biogas power generation—manure return to field” green circular industrial chain, achieving efficient resource conversion and recycling. All farms are equipped with advanced manure treatment facilities. Through the return of digestate to the field, we fully utilize its rich organic matter and nutrients, effectively improving soil fertility, thereby building a sustainable circular agricultural and pastoral model. In addition, dried solid digestate is used to produce bedding material for cattle sheds, significantly improving the cattle shed environment and the comfort of dairy cows.
Diseased and Dead Livestock from Farms: We strictly comply with relevant laws and regulations such as the “Animal Epidemic Prevention Law of the People’s Republic of China.” Each farm primarily disposes of diseased and dead cattle through harmless treatment or safe landfilling by entrusting qualified units, to prevent environmental pollution. At the same time, we are committed to improving the health level of cattle, reducing the number of diseased and dead cattle from the source, and effectively reducing the generation of such waste while ensuring the quality of raw milk.

5. Responsibility and Training

Management at all levels of the company and all employees bear the responsibility for reducing food loss and waste. We will continue to conduct relevant training to enhance employees’ professional skills and environmental awareness, ensuring the effective implementation of this policy.