Product, Service & Design Innovation
Japanese Dairy Farming Being Optimized by Digital Tech, Sustainable Practices

Japan’s dairy farming industry has been struggling in recent years. Demand for milk dropped during the pandemic, leading to concerns that huge volumes of milk would go to waste in 2021 and again in 2022. The rising prices of imported feed and soaring fuel and energy costs only added to the pressure on dairy farmers. A July 2023 survey by the Japan Dairy Council found that 85 percent of Japanese dairy farmers were operating at a loss; and roughly 60 percent of them were considering leaving the dairy farming industry.

In response to these challenges, both the government and the industry have implemented a range of initiatives; but as Shinya Kobayashi — president and CEO of Farmnote Holdings Inc — points out, “It’s vital that dairy farmers understand management practices and aim to enhance productivity.”

Tackling dairy farming challenges with technology

Farmnote CEO Shinya Kobayashi | Image credit: Farmnote Holdings

Kobayashi founded an IT startup in 2004 and learned of the difficulties dairy farmers face in keeping tabs on each individual dairy cow through conversations with a dairy farming client.

“Dairy farmers keep a close eye on their cows from dawn till dusk, using a multitude of different documents to manage their cows,” Kobayashi explained. “Many aspects, such as the timing of breeding, rely heavily on rules of thumb that farmers learn through direct experience. I realized that, by managing these aspects using a cloud system and accumulating relevant data, we could help enhance productivity and improve dairy farm management.”

Aiming to help tackle these challenges, Kobayashi established Farmnote Holdings in 2013; and in 2014, the company launched a smartphone app for dairy and beef cattle farmers called Farmnote Cloud. The company then introduced wearable sensors for cows called Farmnote Color. By attaching these devices to the cows’ necks, the system enables 24-hour monitoring of their activities and heat cycles, signs of calving and changes to their health. The system uses artificial intelligence to learn and analyze individual differences, allowing for remote cattle management — thereby helping dairy farmers to enhance productivity and utilize their time more effectively.

Kobayashi added that “Increasing per-cow productivity leads not only to reduced water and energy use and the lowering of cattle stress levels, it also enables greenhouse gas emissions reductions. By centrally managing a variety of data sets and automatically identifying individual cows requiring attention, our system can also make the work of dairy farmers easier.”

Exploring sustainability at Farmnote’s own farm

Image credit: Farmnote Holdings

In 2019, the Farmnote Group established Farmnote Dairy Platform Inc. and set up a farm in the town of Nakashibetsu in Hokkaido. Through dairy-farming digital-transformation initiatives based on systems they have developed in-house, they are working to create a framework that combines high profitability with sustainability.

“By operating our own farm, we can work on making our technology and expertise more practical in nature,” Kobayashi said. “We don’t have a manager at our farm and instead hold daily meetings to review cattle data and then allocate tasks to personnel based on that data. If someone is absent, other team members can step in to cover for them; and even new recruits fresh out of university can go and carry out tasks on the farm without hesitation. This approach allows us to create a working environment similar to that of a typical corporate setting.”

The team has made significant progress with automation and mechanization — including installing cow-milking robots that enable up to 120 cows to be milked per day, and curtains and ventilation fans that operate in response to sunlight and temperature conditions. This reduction in human intervention apparently also helps to alleviate stress among the cattle, and it is common to see the cows in the barn calmly resting and eating.

Scaling impacts

To enhance dairy-farming productivity, analyzing cows’ genetic to increase the number of high-productivity cows is crucial. To achieve this, Farmnote conducts genetic testing and provides services such as Farmnote Gene — which presents test results in an easily understandable manner and provides guidance on the next steps to take, as well as a genetics service distributing frozen fertilized eggs nationwide. These wide-ranging services are all aimed at the core goal of providing dairy farmers with visualization tools and support for decision-making.

In addition, the company has begun developing solutions aimed at reducing dairy farming greenhouse gas emissions — including sensors that measure the emissions of each cow — and has also become the first in Japan’s dairy industry to be registered in a carbon credit scheme (the J-Credit Scheme) for its slurry-processing method. In August 2023, Farmnote Holdings entered into a capital and business partnership with Meiji Holdings Co., Ltd. Leveraging both companies' expertise and technologies for gathering data on individual cows, they aim to work together to support dairy farmers in reducing their greenhouse gas emissions and help make the dairy-farming industry more sustainable.

Farmnote Group’s vision is to “Be connected.” Kobayashi says, “Dairy farming is just one entry point for us. Through technological innovation and problem-solving, we want to boost the number of leaders able to contribute to societal sustainability.”

Farmnote Group is also looking to expand into other livestock- and crop-farming industries with an eye to global expansion. Through two-way sharing of knowhow with people in the farming industry, they will keep striving towards their aim of building up a knowledge ecosystem contributing to sustainable enrichment for humans, animals and the environment.