Sustainable Dairy Farming
What is Sustainable Dairy Farming?
“Sustainability” is the dairy industry’s “in” word for 2013. Prior to Christmas Fonterra announced that it was making sustainable dairy farming its no.1 priority. The company said its new strategy identified three key areas where it wanted to make a difference:
CEO Theo Spierings is reported as saying that the goal in achieving these three priorities is to make Fonterra a “sustainable co-op”, providing the greatest nutritional value for the lowest environmental footprint per kilogram of milk solids. I’m not sure what that means but it sounds good.
Recently the President of Federated Farmers, Bruce Wills, stated that “the environment is farmers’ first priority”. Likewise, DairyNZ chief executive Tim Mackle pointed to the introduction of the word “sustainable” into their research mix.
It’s great to see the Feds, Fonterra and DairyNZ each acknowledging that sustainability is an important issue and developing strategies appropriate to their organisations. The three, together with other dairy companies and the Dairy Women’s Network, will launch a new Strategy for Sustainable Dairy Farming in a few months, which they say will guide the future investment and activities of the industry.
These priorities, reviews and strategies are to be welcomed as long as they ultimately benefit farmers. My question is what will the farmers’ strategy have to be? Will they have to go cap-in-hand to the bank manager for a larger overdraft to achieve the sorts of sustainability that the CEOs have in mind? Just what extra research will be needed, and can most of that research be done on-farm in a real situation?
One of the problems is that sustainability means different things to different people. To Fonterra it means, amongst other things, more milk and consistent supply. To DairyNZ it might mean higher and consistent funding. To many farmers it probably involves higher and more consistent production.
Given these different expectations and interpretations it isn’t surprising that there is confusion about how farmers are actually going to achieve sustainability. For some it may mean a high stocking rate with feed supplies propped up by maize, PKE and lots of nitrogen. For others in sensitive catchments it probably means optimising Olsen P, low solubility phosphate, limited N and tight management of effluent treatment and disposal. The wise ones will be asking what is the most profitable approach.
There is a very real danger that the true intent of words like sustainability and profit will be lost in the jargon and different interpretations. There are wide variations in what people understand by them and how they measure them.
This is significant because, for farmers, sustainability and profit should be intimately linked. In fact I am convinced that sustainable options have to be measured in profit terms and then managed to achieve maximum returns to farmers. Why make any change unless it is going to be profitable?
The key to all this is how you measure profit, and the best I have found over 50 years of searching is cents per kilo of dry matter eaten daily by stock. This may sound complicated but it is actually fairly straightforward and certainly the most accurate of comparing management options.
A simple example: You might be wondering whether to put on more stock and therefore using more fertiliser and/or supplementary feeds, or fewer stock and doing them better with existing resources. Using your own farm data in new, innovative on-line software you can determine which option will be the more profitable – not just today but also next week, next month, next year and forecast for several years after that. The more sustainable option becomes obvious when profit is the measure.
I hope that the new Strategy for Sustainable Dairy Farming takes this measure of farm profitability into account rather than just tinkering with generic industry figures or indirect estimates like EFS. I would be happy to work with them as I have done in the past.
There are many opportunities to improve your sustainable profits.
Feel free to contact me to find out how: Sustainable Profits Now!
Peter Floyd is the managing director of Cogent Farming Business Systems Ltd.