Last year I had the opportunity to visit a dairy farm in Lajas, Puerto Rico that is preparing for climate change. Tai South Farms, owned by Eng. Neftali Lluch, is a model dairy farm that operates with best management practices and sustainability principles to grow and increase its profitability. The farm served as one of the best practices host in a series of workshops for farmers and agricultural businesses interested in developing skills to cope with climate change.
Aside from the climate topic, the visit to Tai South Farms was an eye opener because the relatively newcomer, is becoming an innovative force within the local dairy market. This makes it a great investment opportunity, both for government agencies looking to promote and replicate productive and sustainable dairy management practices, and private investors seeking triple-bottom line returns. There are three reasons for this farm to have significant potential for disruption; a genetically adapted tropical cow, technologically enhanced dairy management systems; and the use of big data to further research and development.
The farm is increasing the use of a type of cow that is better adapted to the tropical climate. The “Pelona” variety of the Holstein breed, has shorter hair than the common Holstein-Friesian we all recognize for its distinctive black and white pattern. Recent animal science research conducted at the University of Puerto Rico, Mayaguez Campus (UPRM), shows the phenotype’s advantages. The “Pelona” was first scientifically documented by Dr. Jose Pantoja of UPRM and Dr. T.A. Olson of the University of Florida who together observed the “Pelonas” at Agro. Rafael Borges’ dairy farm. Borges already knew then that the “Pelona” had a milk production advantage over the rest of the Holsteins in his herd and worked with Agro. Rafael López at El Remanso Dairy Farm to develop a string of registered Holsteins that carry the “Pelon” gene. This rare tropical phenotype has caught the attention of researchers around the world, and animal scientists and industry professionals in the U.S., Australia and Puerto Rico are currently in a race to improve introduction to dairy farms in tropical and subtropical climates.
When Lluch bought the farm, he had to develop dairy production from scratch. Rather than copying what other farmers had been doing, he invested in technology to enhance the most crucial component of the production system; milking the cows. Tai South Farms employs milking hardware and software developed by Afimilk, a global leader in advanced computerized systems for dairy farms. The company introduced the first electronic milk meter in 1977 and has provided various cutting-edge solutions for the industry over the years. Afimilk is part of the Afikim kibbutzim in Israel, and it is backed by Fortissimo Capital, a private equity fund that invests primarily in Israeli-related public and private technology and industrial companies that require a capital infusion and strategic guidance to expand their business. Once the cows are in place, all the milking is done automatically and through a process that measures production on a per cow basis. The Afimilk system also takes individual measurements to help dairy farmers ensure each cow’s welfare.
Cow & Milk Data
Each cow at Tai South Farms has an electronic identifier on one of its legs. This serves a double purpose; identifying the cow at the milking station or “parlor” and being able to assign “milk data” to each individual animal. Like any other business, dairy farms need to plan for
production to ensure profitability. In the dairy industry, increasing the means of production is usually a long-term proposition of raising more cows, or a costly one if the farmer chooses to buy new ones. Hence, having production data allows for improve management and decision making when it comes to the individual cows. Having analytical data on the milk itself, the farm’s principle product, allows the farmer to make all the necessary adjustment needed to bring about a consistent product, while guaranteeing each animals’ welfare. Data is being shared with UPRM’s animal scientists to further research that benefits the local industry.
Investing in innovation is just part of the formula. An invention can surface without transforming its industry. The automobile had long been invented before the market was disrupted by Ford’s Model T. It was the mass production of the vehicle that really disrupted the market at that time. Hence, innovation is a signal or criteria for investors, but it takes more than that. Investment opportunities can arise when a business hasn’t been aggressively managed and is underperforming, or companies have not gained the means to reach a broader market. Making an investment also requires determining a company's true value through rigorous and dispassionate due diligence. These are some of the reasons to visit Tai South Farms again and again.
Thanks to Dr. Guillermo Ortiz Colon for his kind review of a previous version of this article.