Research shows NZ dairy sector can reduce emissions without losing production

The Country

15 Nov, 2022 12:38 AM6 mins to read

Headlands Consultancy has found there are better ways to achieve and even exceed climate change targets. File photo / John Stone

When it comes to the Kiwi dairy sector reducing its emissions, it’s not all doom and gloom, according to new research.

According to agriculture business Headlands Consultancy, concerns that the Government’s emission pricing plan could devastate New Zealand’s largest export sector can be mitigated, by making a few tweaks on-farm.

Headlands managing director Warren Morritt was already optimistic about the results of his company’s research.

He told The Country’s Rowena Duncum that there were better outcomes from Headlands’ modelling, in terms of reductions in the carbon footprint of milk, greenhouse gas (GHG) emissions, nitrogen leaching, dairy cow numbers and land used - while maintaining total milk production and increasing on-farm profit.

“All of which is achievable while remaining within Fonterra’s pasture-based milk criteria, with total feed consumption being 80 per cent homegrown feed.”

This research shows that with systematic refinements, and the inclusion of a moderate amount of concentrate feeds to fewer, but better cows, the total amount of feed required per farm reduces dramatically, but total milk production per farm is retained, increasing feed conversion efficiency.

However, under the Government’s proposed GHG calculator, the main lever left available to farmers was to reduce total milk production, “which completely ignores any potential gains to be made out of increasing feed conversion efficiency,” Morritt said in a statement.

“Our modelling research clearly shows that the dairy sector can build a system that achieves and exceeds the 2030 climate change and greenhouse gas targets while improving animal welfare and ensuring we don’t compromise on profitability and total production.”

Listen to Rowena Duncum interview Headlands managing director Warren Morritt on The Country below:

Research and results

Headlands’ modelling used the Waikato “average” farm from DairyNZ statistics 2018/2019 season as the basis for the comparison and compared five scenarios against this “control farm”.

The scenario with the greatest environmental benefit shows that dairy farmers can continue to achieve the same total farm milk production levels, with a 36 per cent reduction in cow numbers per hectare, coupled with 8.5 per cent of dairy farm land being retired for alternative use, delivering a 22 per cent increase in operating profit.

The reduction in total GHG emissions (15.6 per cent) exceeds the Government’s emissions reduction targets for 2030 (10 per cent), while there is also a strong reduction in nitrogen leaching (15.5 per cent) in this system when compared to the control scenario.

Greenhouse gas emissions associated with growing and sourcing off-farm supplement was accounted for in the modelling.

Recent industry recommendations include scenarios where cows per hectare are reduced by 15 per cent with a limited option to utilise supplemental feeds.

When modelled, these recommendations resulted in a reduction in total farm GHG emissions (14.4 per cent) and N leaching (9.7 per cent) compared with the control farm.

However, there was also a severe reduction in milk production (11 per cent) and profitability (7.4 per cent) while having minimal impact on the carbon footprint of the end products (3.9 per cent improvement).

By comparison, Headlands’ modelling showed a scenario which could achieve a similar total farm GHG reduction (15.6 per cent) but maintained milk production, and increased profitability by 22 per cent compared to the control farm while reducing the carbon footprint of the end product by 15.7 per cent.

Morritt said the key to reducing greenhouse gas emissions at the dairy farm level, and per unit of product produced, was by producing milk more efficiently, and this required increasing feed conversion efficiency.

“Supplementing the cow’s diet with concentrates is a critical tool to achieving this feed conversion efficiency that enables each cow to consume more feed and nutrients in total, channelling a much higher proportion of feed energy towards milk production.

“This in turn allows a much lower number of cows per hectare while maintaining farm production levels.”

Headlands managing director Warren Morritt. Photo / Supplied

The key difference of this modelling compared with previous research is that introducing these concentrates wasn’t done with a view to increasing total production levels (intensification); rather, they were used to drive feed efficiency, allowing a lower number of cows per hectare, while maintaining total farm milk production and improving environmental outcomes, Morritt said.

According to Morritt, the GHG emissions calculator in the current Government proposal used a fixed amount of feed per kg milk solids to calculate the GHG emissions of each farm, which if adopted, would remove the ability to recognise and reward improved feed conversion efficiencies which deliver GHG emission reductions.

Adopting this “overly simplified” method would drive a severe reduction in milk production and farm profitability, for a sub-optimal environmental outcome, he said.

“With the Government’s proposed GHG calculator, reducing milk production would be the key lever to reduce GHG emissions. Headlands’ modelling shows this approach would be both flawed and unnecessary.

“It’s vital that policies and GHG emission tax calculators do not use a fixed amount of feed per unit of milk production to calculate farm GHG emissions, or unfairly penalise the use of concentrate feeding in dairy systems.

“Moderate amounts of concentrate feeds are critical to improving feed conversion efficiency and are a crucial tool for achieving positive environmental and economic outcomes.”

Headlands’ modelling research has been peer-reviewed by some of New Zealand’s leading dairy scientists including Mr Dave Clark, formerly a principal scientist at DairyNZ, and Dr Eric Kolver, formerly a principal animal scientist at DairyNZ.

Ultimately the purpose of the research was to ensure that the final Government policy was broad enough to allow farmers to innovate and have options within their farming businesses while achieving environmental targets, Morritt said.

“The alternative would be negative on all fronts, as productivity and profitability would be reduced, and environmental benefits would be sub-optimal. We have grave concerns that adopting the proposed government calculator will result in a much less efficient, less clean dairy industry, with severe downstream economic effects on NZ society as a whole.

One of the main differences with the strategies Headlands developed was being able to reduce the carbon footprint of milk in line with the reduction in total farm greenhouse gas emissions, Morritt said.

“The Government’s current proposal will have minimal impact on the carbon footprint (kg GHG per kg milk solid) of NZ dairy exports. This will likely be a key consideration for the consumer in the future, and if we don’t address this, it could result in our products being less saleable in the global market.”