Key industry issues need farmer input
Almost 18 years ago Shane Ardern drove a tractor up the steps of parliament to protest a proposed emissions tax. Hundreds of farmers supported his protest and the tax was abandoned. Fast forward to 2021 and you could be forgiven for having a case of déjà vu. Only today we’ve traded protests for working groups and commissions, reports, and committees. The debate may have progressed, but it’s no less important for farmers to have a voice at the table.
That’s part of the reason that Jersey Advantage was formed. To take a lead on industry issues that will affect the way you and I farm now and into the future.
Over the past year there has been no shortage of these issues. Jersey Advantage has been working, often behind the scenes, on your behalf to represent the position not just of Jersey New Zealand members, or even Jersey farmers, but all those that value efficient, sustainable dairying.
Below are a few of the key issues that we’re working on.
Bobby calves
Like the emissions tax, the bobby calf issue has been debated many times. Moves by our European counterparts to phase out the practice has fuelled the discussion. In Europe they have the luxury of reducing bobby calf numbers by exporting young surplus dairy beef calves. New Zealand doesn’t have that option and a substantial increase in feeder calves would collapse the local market.
While there are some in the industry that would like to position this as a Jersey issue, that is underplaying the situation. In fact, it’s easy to argue this is an issue with implications beyond even dairying. Make no mistake - the sheep milk and dairy goat industries will be watching this debate closely.
The challenge is that New Zealand has a finite amount of productive land, while also being tasked with reductions in carbon emissions, nitrogen use, and stocking rates. Adding an extra 1.8 million bobby calves into the mix annually doesn’t work without some significant trade-offs.
What is New Zealand prepared to give up? Is a 30% reduction in dairy production acceptable when the world has an ever-increasing number of mouths to feed? What implications does that have for dairy farmers, staffing, infrastructure, and farm profitability not to mention dairy exports, GDP and economic recovery? The issue soon becomes bigger than just a dairying one. Approaching this debate from New Zealand Inc’s point of view allows us to think about how we best use land and other resources to achieve targets and maintain our brand as the world leaders in dairying.
Leadership and consultation will be important for us to reach a target that is both practical and achievable while maintaining our social licence to farm.
Jersey Advantage is committed to working with industry leaders to ensure farmers views are represented and decisions being made pass the common-sense test.
Stocking rates and carbon emission modelling
On January 31 the Climate Change Commission (CCC) released their draft carbon budgets and recommendations to government including a number of recommendations relating to rural industries.
There are many positives in the report including the distinction between long-lived stock emissions (carbon dioxide and nitrous oxide) and that of short-lived flow emissions (biogenic methane); as well as recommendations for improved rural broadband, revisiting the debate on genetic engineering, and the need for more water storage.
One area that is causing concern is the mention of a 15% reduction in the number of dairy cows, beef cows, and sheep. It is important to note that this was not a directive by the Climate Commission.
Federated Farmers noted that the 15% figure makes a number of assumptions that may or may not eventuate, and further work is required to determine what level of reduction in biogenic methane is warming-equivalent to the current targets for long-lived emissions.
Recent communications from Dairy NZ also outlined that what the Commission has recommended is the Government introduce policies that will reduce barriers to conversion to lower emission land uses. By default, stock numbers would decline with some farmers choosing to convert to other land uses like horticulture.
Whatever path the industry takes towards reducing emissions, it is critical that any reduction in stocking rates are on a liveweight per hectare basis and not cow numbers.
You don’t need to be a scientist to appreciate that a 550kg cow will eat more than a 370kg cow. With methane emissions directly linked to feed intake, having fewer but bigger cows that require more feed is a zero-sum game.
Instead, a focus on efficient cows that maximise milk solids for every kilogram of feed consumed is where we should be heading. Cows with superior fertility that get in-calf easily to reduce cow wastage and lower replacement rates would be a more effective way to achieve industry targets.
Jersey cows tick all those boxes, with an estimated 12% carbon efficiency advantage. Not only do they produce 8% more milk solids per kilogram of dry matter, they also have a carbon advantage when it comes to cartage and drying of milk due to their higher milksolids percentage. Jersey herds also commonly achieve higher in-calf rates than other breeds and this results in less cow wastage and lower replacement rates.
Jersey Advantage will be preparing a submission, and we would encourage all farmers to do the same. Dairy NZ has a useful summary of information on their website and the full Climate Change Commission papers can be found at climatecommission.govt.nz/get-involved/our-advice-and-evidence.
Farm Environmental Reporting & GHG emissions pricing
In October Fonterra rolled out Environmental Reports to all its farmers. The reports include a Greenhouse Gas Emissions (GHG) Report and Nitrogen Risk Scorecard.
The reports have been promoted as providing useful insights for farmers to identify opportunities for improvements on farm – providing indicators such as estimated levels of biological methane and nitrous oxide. However, it’s important to note that the GHG emissions modelling uses a regional average liveweight rather than a breed average or a farm-specific value. In most areas where the average regional liveweight will align more closely to a Friesian cross type animal, the use of these generic figures will penalise low liveweight herds and reward those with heavier animals.
It’s a pragmatic approach that has allowed the reports to be rolled out in a short timeframe but it is important to consider before making any changes based on the GHG figures.
It’s also important because Fonterra is one of thirteen partners in the He Waka Eke Noa Primary Sector Climate Action partnership – tasked with delivering a farm-level pricing mechanism for agricultural emissions. It’s imperative that any pricing mechanism accurately measures GHG emissions while providing a fair outcome for farmers and high-efficiency herds. That is herds that maximise milk solids production per kilogram of dry matter eaten and per kilogram of liveweight.
You can find out more about He Waka Eke Noa and their key milestones at https://hewakaekenoa.nz/
Fonterra Milk Price
In September last year, Fonterra sought feedback from shareholders on a proposal to remove the Capacity Adjustment and Peak Volume Adjustment from the calculation of milk price. Seasonal Volume Adjustment will remain.
While many shareholders will welcome a simplified pricing structure, it is important that milk payments drive the right behaviour and support an increasing industry focus on efficient, sustainable production.
The Capacity Adjustment and Peak Volume Adjustment were designed to recognise the cost of processing milk over the peak period – through things like investment in stainless steel, and additional tankers.
Peak Volume Adjustment effectively rewarded herds that produced more concentrated milk over the peak milk period and penalised those that produced milk with a lower milksolids percentage.
While the Capacity Adjustment was based on how your milk curve compared to the co-operative average, with a payment to those with flatter production and a penalty for those with peakier production curves.
With the Capacity Adjustment removed, those Jersey herds with lower inputs whose production is linked to seasonal pasture growth should see a slightly higher milk payment, with figures of around $0.02-$0.03 per kilogram of milksolids being reported within our group.
Work is still underway to determine how the removal of the Peak Volume Adjustment will impact future milk pricing but Jersey Advantage is working to ensure that all the costs of collecting and processing high volume, low solids milk are fairly recognised in milk price.
Submissions have now closed for feedback on this issue but you can provide feedback to your area manager, and talk to them about how the proposed changes are likely to impact your milk price.
The industry faces some challenges going forward but as Jersey farmers we are well placed to tackle these. Jersey’s efficiency, lower environmental footprint, superior reproduction, adaptability to variable milking routines, superior heat tolerance, and lower levels of health issues such as lameness and mastitis all combine to future-proof the breed. The Jersey advantage is so strong that it is imperative we get good science-backed outcomes for these issues. We appreciate your support of Jersey Advantage and as always, we welcome your feedback.