Primary Industries

Milk could be carbon-neutral now, says new study

By boosting how much maize cows eat, modestly reducing stock numbers, shrinking fertiliser use and buying carbon offsets, New Zealand milk could be carbon neutral today, according to a new study modelling changes to a typical Waikato dairy farm.

Researchers at AgResearch have calculated that a typical Waikato dairy farm could go carbon neutral now and still make a profit.

As a bonus, a farm that adopted the changes could also reduce nitrogen leaching by up to 42 percent, improving water quality.

Crucially, the farms profit could also increase, by 15 percent, after factoring in a premium paid by climate-conscious consumers.

The modelling, which was funded by the Our Land and Water National Science Challenge, reveals that making relatively small changes to existing farming practices could allow milk to be marketed as carbon neutral, while also improving water quality downstream – an important consideration as regional councils and the Government move to impose stricter run-off limits.

However, there is one major caveat – the exercise assumes that most of the emissions from producing milk will be offset by buying carbon offsets. Actual emissions on the farm would be reduced by a maximum of 20 percent, with the rest counteracted using credits. While that makes the proposition attractive at today’s carbon prices of just $25 a tonne, the calculations will change when the price of carbon inevitably increases.

On the other hand, the exercise shows that comparatively modest changes to farming practices, such as feeding cows more maize, would enable farmers to market New Zealand milk as greenhouse-neutral -- so long as they could find the rights sales and marketing channel to capture a premium price.

AgResearch senior scientist Gina Lucci, the senior author of the study, says the researchers deliberately avoided suggesting large-scale changes such as hugely slashing milk production volumes or retiring big swathes of land from use. “We didn’t want to come up with things that nobody would actually do, we tried to operate within the constraints of a realistic situation because we wanted this to be applicable and not a blue sky exercise of ‘What if we got rid of half of our cows?’,” she says.

AgResearch senior scientist Gina Lucci. Photo: Supplied

The researchers took the workings of a typical Waikato dairy farm – including the average number of cows, what they ate, the fertiliser used and other inputs – and entered them into a model to calculate the milk’s greenhouse gas footprint. They then tweaked farming practices to reduce emissions as much as practicable, before adding the cost of offsetting the remaining emissions to calculate an overall profit.

The researchers came up with three scenarios: two in which milk production volumes remained close to today's conventional farms, but with tweaks to fertiliser use and the cows’ food, as well as a third scenario in which the farm reduced its stocking rate and and shrunk the amount of feed being purchased.

In the third scenario, the farm’s milk production shrank by 9 percent, although the individual cows were more productive, with each one making 8 percent more milk. The third scenario was the one that generated the biggest climate and water quality benefits – and the biggest boost to profit (an estimated 15 percent increase).

The economic analysis was done by Wei Yang, an economics lecturer at Lincoln University, who calculated how much more consumers would be willing to pay for dairy products with “feel-good” qualities related to the environment and animal welfare, based on previous studies. After combining the results of 32 different studies on consumers’ willingness to pay, the study factored in that overseas customers would pay around a quarter more for environmentally-friendly dairy products.

The third option, with lower stock and less feed required for cattle, was found to be the best-case scenario by the researchers, because it reduced greenhouse gases from the farm by up to 20 percent and shrunk nitrogen leaking by up to 42 percent. Nitrogen leaching is a problem for waterways and also a greenhouse contributor, because when excess nitrogen in cow urine falls on paddocks, microbes convert some of it to a powerful greenhouse gas, nitrous oxide.  

From the perspective of the farmer, the key change was increasing the use of maize to feed cows -- with maize rising to up to 30 percent of the animals’ diets. Maize is lower in nitrogen, says Lucci, so increasing cows’ maize intake reduced nitrogen excretion, with potential benefits for water quality and the climate.

Increasing maize intake also allowed the hypothetical carbon neutral farm to stop using nitrogen fertiliser on the pasture, because maize replaced the extra pasture growth that would have resulted from fertiliser use. The cows could keep getting the same energy intake. Their stocking rate was reduced by 17 percent to 2.4 cows per hectare, increasing milk production from each cow by an estimated 8 percent.

The researchers’ model incorporated some of the important inputs from off the farm, including the greenhouse gas produced by growing maize on a different property.

Also counted was the cost of paying for carbon-neutral certification through an independent scheme.

Not every environmental aspect of the milk-making system could be counted, however. While the team included the greenhouse footprint of growing the maize off-farm, they did not include the nitrogen run-off from growing maize in their estimates of nitrogen leaching. However, Lucci says any nitrogen leaching from growing the maize offsite would not negate the overall benefits to waterways from switching to feeding more maize to cows.

She says she was surprised by the scale of the benefits to water. “Even if you are just focusing on carbon emissions, you get benefits from nitrogen (leaching) as well,” says Lucci. “There are dual benefits there."

Other aspects of the milk sales and processing chain would need to be in place to allow farmers to sell and market carbon neutral milk for a premium, Lucci acknowledged.

Danone announced in July it is investing $40m in building a wood-powered, carbon-neutral milk processing facility in Balclutha and Fonterra has also announced goals to shrink its carbon footprint.

By 2024, New Zealand farmers will be required to report their livestock emissions and start to reduce them, under an agreement between the agriculture industry and the government.

AgResearch described the results from its modelling as showing a viable path for farmers who wanted to “rip off the band aid” by going carbon neutral sooner rather than later.

Get it early – This article was first published on Newsroom Pro and included in Bernard Hickey’s ‘8 Things’ morning email of the latest in-depth business and political analysis. Get it early by subscribing now or starting a 28-day free trial.

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