Cows, cash and climate: Low stocking rates, high-performing cows, emissions and profitability across New Zealand farms

David Fleming (), Suzi Kerr and Edmund Lou ()
Additional contact information
David Fleming: Motu Economic and Public Policy Research
Edmund Lou: Motu Economic and Public Policy Research

No 19_11, Working Papers from Motu Economic and Public Policy Research

Abstract: Using the New Zealand Monitor Farm Data (NZMFD), this paper explores the cost-effectiveness of two mitigation options to reduce biological greenhouse gas (GHG) emissions on farms: reducing stocking rate (SR; the number of cows per effective hectare of dairy land); and increasing animal performance (AP; measured by production of milk solids (MS) per cow). These mitigation options have been defined as “no cost” because, if applied together, they could reduce the carbon footprint of farms while also maintaining or even improving profits (de Klein & Dynes, 2017). We evaluate the effect of these mitigation options on three main variables: milk profitability of the farm (cash operating surplus (COS)/ton of MS produced); emissions intensity (ton CO2eq/ton of MS produced); and the value of emissions (COS/ton CO2eq). The paper has two main findings: high-AP farms show significantly lower emissions intensities and higher milk profitability; and higher SRs on farms are significantly associated with lower emissions intensities while not being significantly associated with milk profitability or negatively associated with profit per hectare. These results imply that higher levels of AP reduce the GHG intensity of the farm and increase profit – a “no-cost” option – but unless either the SR or the area under dairy farming fall, an increase in AP will lead to an increase in absolute emissions. However, our results cast doubt on the idea that reducing SR is a no-cost way to achieve absolute emission reductions. The two options do seem to constitute a no-cost outcome when combined, but potentially the same mitigation could be achieved with lower loss of profit by reducing the area of dairy land while maintaining high SRs and increasing the performance of the animals.

Keywords: value of emissions; agricultural greenhouse gas emissions; climate change; dairy; methane; nitrous oxide; emissions intensity; mitigation practices; pastoral systems (search for similar items in EconPapers)
JEL-codes: Q10 Q19 Q52 Q54 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2019-05
New Economics Papers: this item is included in nep-agr and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://motu-www.motu.org.nz/wpapers/19_11.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mtu:wpaper:19_11

Access Statistics for this paper

More papers in Working Papers from Motu Economic and Public Policy Research Contact information at EDIRC.
Bibliographic data for series maintained by Maxine Watene ().