I visited a Waikato dairy farmer recently who is running against the tide and finding it profitable. He is running 2.2 cows per ha and says intensification holds no benefits for him except when milk prices spike as they did in 2007/8. I found this hard to believe as the dairy industry has been steadily increasing its stocking rates for years now - from an average of 2.4/ha in 1990 to 2.83 now, but on some farms over 5 - and surely there must be some science behind it. However the scientific research I've seen lately seems to support this farmer. It indicates that, at current input prices, intensification does not pay when the milk payout is below $5.50.(1) The inflation-corrected average milk price for the last ten years was $5.20; that's about where it is for 2008/9, and is predicted to be $4.50 in 2009/10. Are we running harder to go backwards?
Bear with me a moment for some numbers.
A four season study of three farmlets in the Resource Efficient Dairying (RED) trial, in the same Waikato environment with similar feed levels, compared varying inputs of fertiliser, feed supplements, off-farm grazing and stocking rates. The "low input" farm grazed 2.3 cows per ha, bought in no feed, no urea (but some P and K) and grazed all replacements on-farm. The "middle" farm with 3 cows/ha applied 139 kgN/ha/y, grazed heifers off-farm but bought in no feed supplements. The "high intensity" farm with 5.2 cows/ha applied 119 kg N/ha/y, grazed replacements off-farm and bought in 13.108 kg maize and pasture silage/ha/y. The "middle" and "high input" farms used some irrigation. (2)
At $4.50/kgMS the low input farm was the most profitable and the cows produced more milk per head - 4970kg/cow/y compared with 4718 and 4848 for the other two. That's fewer hooves pugging, and less work calving.
Back in the real world, when Mike and Madeleine Moss converted their family farm near Raglan to low input farming they stopped buying urea and feed and started grazing all their heifers on-farm. They also went for organic certification which gives them an additional $1.05/kg premium for their milk. They dropped their stocking rate to 2.2 and after last summer's drought and a wet and cold winter are considering going to 2.1 while growing more supplementary feed on the farm. They are still profitable when many dairy farmers this year are struggling to borrow to stay afloat.
At the same time their effects on the environment are markedly reduced.
Lower stocking rates greatly reduce nitrate and bacterial runoff into waterways. In addition, all of Mike's waterways are fenced and planted and the effluent from his herd home is held until soils are dry before it is applied to the land. What was news to me though was the research finding (2) that total greenhouse gases per kilo of milk solids were quantified for the test farmlets and are lower in the low input system.
Where this leads is that we can do something about dairy farming emissions here in New Zealand. In fact, the search for lower emissions may lead us down a path to more profitable, as well as more sustainable, farming.
It is important to note that if our average stocking rate was reduced from 2.83 to 2.43, the dairy industry would have nothing to pay under the ETS legislation as it was passed last year. And that would remain the case until 2018 as long as the number of animals did not rise. In fact it would be better than that as the lower emissions per kgMS and the higher milk production per cow of the low input system would see us even further ahead. (The ETS as it currently stands gives the dairy industry free credits for up to 90% of its 2005 emissions, and this does not begin to reduce until 2018. Herd numbers in 2005 were roughly 2.43 per current dairy hectare.)
Every year that dairying is exempted from paying anything at all for its emissions, that benefit is capitalised into the price of land. High land prices are great for retiring farmers but bad for the industry as they lead to higher debt and require high prices to just break even. Land prices have relentlessly risen after every rise in the milk price over the years but they never fall as fast as they rise, blocking the entry of young farmers and the renewal all industries need.
Of course, expressing stocking rates in number of milking cows per effective ha of dairy land can be misleading anyway. The farmlet with the 5.2 stocking rate required 130 ha off farm to raise its heifers and its maize silage - more than a doubling of the 115 ha where the cows grazed. Per cow, the total land required is very similar in the low and high input systems.
There are other reasons to be optimistic about our ability to reduce agricultural emissions. A comparison of methane emissions from different cows of the same breed eating the same feed has found they vary by 30%. The cows producing the least methane are the ones turning more of their feed into meat and milk so if a reliable genetic test can be developed to identify these superior individuals they will be more productive as well as lower emitting. Seems to me it would be good if farmers could get some financial benefit from that, but it is hard to see how that could happen without a price on emissions.
There is a lot more science still to do on methane and nitrous oxide emissions and ways of reducing them, but its clear there are steps we can take now. I believe the interests of New Zealand farmers will be best served by embracing the reality of climate change, adopting all the low emissions practices that make sense, and giving greater priority to developing the science that will enable us to lead the world in emissions reductions from farming.
Jeanette Fitzsimons, Green Party MP
References:
1. Glassey, C and Clark, D, Milksolids Production per ha vs Profit per ha Dairy NZ July 2008
2. Basset-Mens, C., Ledgard, N., & Boyes, M., Eco-efficiency of intensification scenarios for milk production in New Zealand, Ecological Economics, 2009
