The Aussie dairy carbon hoofprint

hoofprint

Something of a wet blanket was thrown over the World Milk Day celebrations last week in the form of a story in The Guardian and on the ABC about dairy’s carbon footprint.

Avoiding meat and dairy products is the single biggest way to reduce your environmental impact on the planet, according to the scientists behind the most comprehensive analysis to date of the damage farming does to the planet.
– The Guardian, June 1 2018

The story was based on a study published in the journal Science that was based on almost 40,000 farms in 119 countries.

Being something of a “greenie” myself, I know how much emissions vary depending on how we farm and that was reinforced by a chart in The Guardian’s story. The lightest cheese footprint really is quite light! But where does Aussie dairy sit in the spectrum?

GuardianChart

To learn more, I asked Catherine Phelps of Dairy Australia for answers. Thank you, Cathy, for these incredibly comprehensive answers!

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MMM: How much does the farm gate carbon footprint for dairy vary around the world?
CP: There is a wide variation in the carbon footprint for dairy.

A 2010 study by the Food and Agriculture Organisation on Greenhouse Gas Emissions (GHG) from the Dairy Sector (2010) reported the highest emissions of about 7.5kg carbon dioxide equivalent per kg of fat and protein corrected milk (FPCM) for sub-Saharan Africa.

The developed regions of the world had the lowest footprints of 1 – 2 kg of carbon dioxide equivalent per kg of FPCM. Asia, North Africa and South America have intermediate levels of emissions.

The Australian dairy industry 2010 carbon footprint study of farm gate GHG emissions reported the average GHG emissions to be 1.1kg of carbon dioxide per kg of FPCM. Per unit of production Australian dairy producers have one of the lowest carbon footprints in the world.

MMM: Why is there such a variation?
CP: Differences in carbon footprints are usually related to the efficiency of the production system, cow genotypes and the quality of the forage.

In arid or humid zones where producers are reliant on native grassland, the quality of the feed is poor and milk production per cow is low. The genotype of dairy breeds best suited to poor quality feed and/or high temperature and humidity is often adversely correlated with milk production efficiency.

The majority of GHG emissions from Australian dairy production systems are methane from enteric fermentation (57%); followed by methane and nitrous oxide from urine and dung (18%).

MMM: What have Australian dairy farmers done to reduce their carbon footprint and how has it changed over time?
CP: Between 1980 and 2010, the Australian dairy industry reduced its carbon footprint per kg of FPCM by 30%.

This reduction is due to improved production efficiencies, examples being better quality pasture and selection of higher genetic merit cows. Enteric methane emissions represent energy losses from the digestive process. Improving feed quality, breeding animals with increased feed conversion efficiency and use of specialist feed additives reduces the amount of energy lost as enteric methane.

Increased adoption of good practice manure and nitrogen fertiliser management is also contributing to the lower carbon footprint.

MMM: Does combining animal farming and cropping have any environmental benefits?
CP: This is not an easy question to answer. The practices implemented by an individual producer are often more important than their type of farming system with respect to environmental impacts.

The argument for mixed farming over specialised livestock or cropping systems is usually based on the assumption that animals can utilise cropping waste, or take advantage of grazing cereals with the outcome being greater productivity per unit of land. In addition, animals contribute nutrients to the soil through manure and pasture can act as a disease break crop and/or soil conditioner.

Whether a mixed farming system is more environmentally beneficial will depend on the management practices being implemented. For example, a zero tillage cropping system may have less impact on water quality and soil health than a mixed farming system with a high proportion of conventional cropping.

A different approach is to identify practices which boost productivity whilst reducing environmental impacts. Some of these will be common across farming systems, others will be relevant to a particular system and its location. For example using a nutrient management plan to inform fertiliser/manure applications and identify and remediate soil constraints will improve soil health and farm profit whilst reducing the risk of nutrient loss regardless of the farming system.

MMM: If Australians adopted a vegan diet, what difference would that make to the area of land needed to sustain us?
CP: Recent research based on the Dutch diet reported carbon emissions could be reduced by approximately 2.9 tonnes/person by eating vegan. However the nutrients lost by avoided animal products would need to be compensated by plant-based products. To obtain the nutrients provided by dairy an individual must eat more fruit and vegetables than the recommended daily portions.

The same research estimated the amount of land needed to produce the extra plant food is equal to the land used by dairy. The carbon emissions from the extra food were similar to dairy. Similar research has not been conducted in Australia.

A US study found the removal of animals from the agricultural system resulted in diets with excess energy that were deficient in essential nutrients. There was potentially a decrease in the area of land required, however to support the nutritional needs of the US population nutritional supplements would be required.

The outcome determined that is a challenge to scale up plant-based diets to meet the nutrient needs of whole populations, due to land availability, soil type and climate.

MMM: Aside from eliminating animal foods, what are the implications of a vegan diet and lifestyle?
CP: When considering the environmental impact of various agricultural products it is important to consider the full nutritional value delivered by different foods. Multiple research papers have found that whilst it is possible to meet essential nutrient requirements through vegan diets this can be a challenge in reality.

Without careful balancing such diets are likely to be deficient in various micro-nutrients and fatty acids including calcium, vitamin A, Vitamin B12 and vitamin D. These nutrient deficiencies can be difficult to manage at a population level. Products like dairy are nutrient dense and an excellent source of many essential micro-nutrients and fatty acids.

There are alternative lifestyle options for reducing individual greenhouse gas emissions that don’t involve a significant change in diet.

For example driving a smaller car, reducing air travel, or sequestering carbon by planting more trees. A passenger on a return flight from Melbourne to London return will be responsible for producing approximately 11.2 tonnes of carbon emissions (https://www.treesforlife.org.au/carbon/calculate-your-impact/ready-use-calculations).

Planting five trees will sequester one tonne of carbon.

person s left hand holding green leaf plant

Photo by Alena Koval on Pexels.com

Free range milk in Australia

jamieoliver

Jamie Oliver has a new cause – free range milk. Of course, his focus is on the UK but what about here?

There are housed dairy cows in Australia but I’ve never seen one because they’re very rare – so rare, I don’t even know how many hours I’d need to drive to show you one.

When we talk about the “cow shed” here, we mean the dairy. Aside from milking time, our cows spend their days out in the paddock grazing pasture and munching silage or summer crops.

Dairy cows are much more commonly housed in difficult climates. Teats exposed to snow in Europe or the USA can freeze, while cows exposed to desert heat in Saudi Arabia can die of heat exhaustion. Keeping cows indoors in those conditions not only makes sense, it’s the only humane thing to do.

There are some cases, though, where cows are kept permanently indoors, just to make the most milk possible. Advocates of housing say the cows live lives of luxury and are not forced to walk long distances and endure the discomfort of bad weather.

I’ve got some sympathy for those arguments. On the other hand, studies suggest that cows prefer access to pasture and then, there are videos like this one showing Dutch dairy cows being let outside for the first time after winter.

Really intensive farms are popping up around the globe where thousands – even tens of thousands of cows – are housed and milked up to four times per day.

I’ve never been to one of these places, so find it hard to pass judgement on them but it’s even harder to forget watching a cow leap for joy as she greets the great outdoors.

Could this have been the wake-up call Aussie dairy needed?

bulllores

When the two biggest processors of Australia’s milk, Murray Goulburn and Fonterra, squandered the goodwill of farmers earlier this year, there was a sense they could do as they wished. They made the rules and broke them, too.

One executive told me there was no risk of supply loss following the drastic price cuts, saying, “After all, where would they (farmer suppliers) go?”.

How things have changed. Both the big processors have watched milk supply evaporate and, with the dawning realisation that something had to be done to avoid the death spiral outlined here and detailed by MG’s own advisors, Grant Samuel, both have responded.

After suspending the MSSP while reducing the forecast close by about the same amount a week earlier, MG made amends with a step-up the day before its AGM.

In his AGM address, MG chairman Phil Tracy acknowledged farmers’ pain and offered an apology of sorts.

“While as a Board, we did what we could with the information that we had at the time, we know that the outcomes of that period have been devastating for suppliers and for that we are deeply sorry.” – Phil Tracy, MG Chairman

Like MG, Fonterra Australia has announced it is reviewing the way farmers are paid for milk in order to avoid a repeat of the May debacle. Farmers whose milk production peaked in May and June were initially singled out for a thumping, causing many to sell off cows, only for Fonterra to back-track days later and spread the pain of its price cut more evenly among suppliers.

Despite poaching 200 million litres of milk from MG, Fonterra Australia’s supply remained fragile, due to the tricky season, the low milk price and the damage done in May to autumn-calving regions. Hours after MG announced its step-up, Fonterra came out with its own, much larger (and incredibly welcome), price increase.

The size of the step-up challenged the oft-held belief that Fonterra only pays the price it needs to in order to prevent supply loss to MG. With profitability restored, perhaps Fonterra has indeed extended its co-operative spirit to this side of the Tasman. On the other hand, Fonterra’s announcement provided a hint that perhaps it was essential to fill under-utilised stainless steel:

“The last six months have been challenging for all of you, and we know that spring is critical to optimise production.” – Matt Watt, Fonterra Australia

No matter what the motivation, it’s enormously heartening to see the two biggest processors act and act so positively. Maybe this is the wake-up call Australian dairy had to have. It might even help to rekindle the traditional sense of partnership between farmer and factory that had been on the wane for so long.

What’s certain is that farmers – and their supply of milk – can no longer be taken for granted. Loyalties have been stretched or broken and farmers who have now experienced how easy and rewarding it can be to shift their supply may well be tempted to do so again.

In return, expect processors to lock in a broader range of “desirable” supply with more special deals and contracts. Be careful what you sign. I’m tipping the unfair contract law that came into force quietly this weekend will be more important for dairy farmers than legislators could have imagined.

The big opportunity for MG, the last big co-op

cowcockiesbook

To many dairy farmers, Murray Goulburn is much more than a milk processor. It’s their co-op. I know, it was my co-op too. For the record, our farm had always been a dairy co-op member for generations, even before MG was formed, until just before the partial float.

But sometimes, that zeal can backfire. It’s counterproductive to say farmers can leave the co-op without penalty and then openly consider placing special conditions on returnees. Zealots also look foolish, or callous, publicly arguing black is white in an attempt to airbrush the hurt caused to so many since April. Nor is it okay for them to harass anyone – as I was this weekend in private messages – who simply points out inconvenient facts. Aggression is not the path towards conversion.

As MG director-elect Craig Dwyer pointed out on Twitter this morning, the fish rots from the head.

craigdtweet

And this is where Murray Goulburn is at a crossroads. Until the April trading halt, it had been travelling at what the then MD Gary Helou loved to call “break-neck speed” towards its vision of becoming a “first choice dairy foods company”. The co-operative ethos had faded into the background.

Over the last few years, MG’s culture has moved away from that of a real co-op towards a company. “Each for all and all for each” once graced the cover of MG’s annual report but in its submission to the Senate inquiry published just days ago, MG revealed there were many more “special deals” than many had suspected (see below).

specialdeals

Excerpt from MG Senate Inquiry into the Dairy Industry submission (p. 10)

The zealots often lament the treatment of MG by the media and commentators like me. The reality is that this scrutiny offers the co-op a massive opportunity. Everyone is listening and the story MG could tell is compelling. It is the last big Australian dairy co-op (with apologies to Queensland’s Norco) and many – even those who have fled MG – still cherish the co-operative spirit. We just need to know that MG does, too.

What MG’s announcement means in plain English

This is a post written purely for my fellow dairy farmers in light of the MG announcement today. After speaking with the people at MG, this is what I have learnt:

Why the price must fall
MG opened at $5.60/kgMS. Its lower than expected sales, the rising Australian dollar and the fall in the value of its larger than normal (which are routinely high anyway) inventories mean it has a shortfall of between $170 and $200 million. This means the price paid to farmers must fall.

How far the price must fall
Depending on how the last two months of this financial year pan out in terms of sales and exchange rates, Murray Goulburn will finish the season between $4.75 and $5.00.

But the price can’t fall that far in two months…
To do that, it would need to pay farmers virtually nothing for milk supplied in May and June. Some rough numbers sent to me by an industry analyst puts those figures at about 4.75 cents per litre. Clearly, that would be disastrous for many suppliers. It would also cripple MG because farmers would have little choice but to leave MG and supply any other processor that would take their milk.

…so, here’s what will happen
MG will pay farmers for milk supplied in May and June as if the price was $5.47 all along. In other words, the price for May milk will be $3.38 for fat and $7.42 for protein. For June’s milk, it will be $3.45 for fat and $7.59 for protein.

If MG’s sales and the currency fall in line with the worst case scenario and MG really should have paid farmers just $4.75 for the year, it will mean there is a shortfall of 47 cents for every kilogram of fat and $1.03 for every kilogram of protein.

This money will be deducted from the price paid to farmers evenly over the next three years. It means the milk price will be lower for each of the next three years than it otherwise would have been by about 15 cents for fat and 34 cents for protein.

But it’s NOT a debt carried by individual farmers
The money to be deducted over the next three years will simply come out of the milk price. If a farmer leaves MG and moves to a different supplier during the next three years, no debt will follow that farmer. If a farmer joins MG in the next three years, that farmer will have a lower milk price than they would have received in a normal year.

MG will not apply a loan against an individual supplier and will not respectively apply terms and conditions to suppliers.

About this post and me:
I am a former MG supplier who still holds some MG shares and currently supply Fonterra Australia. This post is not designed to do anything other than clarify confusion surrounding the situation because I am fearful for the mental health of my fellow farmers. This post has been checked by MG for accuracy.

 

 

A quad bike helmet that really, truly works for dairy farmers

HQHelmet

This new helmet for quad-bike-riding farmers will save lives because it works. Not just because it’s tough and protective but because it’s not the sort of helmet you rip off as soon as you’re out of sight of the boss.

Most farmers refuse to wear helmets and I can understand why. I’ve tried wearing a road bike helmet (in line with official expectations) to bring the cows home on a sweltering Sunday afternoon. A road bike protects your head alright – that is, for the few minutes before heat exhaustion sets in.

Road bike helmets are made for riding motor bikes on a road, fast. Not at 2km/hr behind 250 cows, each throwing out the same body heat as a 1500kW hair dryer (I’m not joking, they do).

As a result, we’d decided to wear equestrian helmets compliant with AS/NZS 3838. Designed to protect a rider from a nasty fall at speed, they provide more protection than a pushbike helmet and better ventilation than a motor bike helmet.

Why hadn’t we chosen a helmet rated for agricultural quad bike use, you ask? Because there wasn’t one. New Zealand has developed such a standard – NZS 8600 All Terrain Vehicle Helmets – but, for reasons I can’t fathom, Australia has not adopted it or chosen to follow suit. Australian inspectors will still expect you to wear a road bike helmet, unless you can prove you have done a proper risk assessment.

Despite it all, the Quadbar people have finally designed and made a helmet especially for Australian farmers, the HQ Stockman 2. We were sent a complimentary sample helmet to test on the farm. Suffice to say, Wayne’s old equestrian helmet is gathering dust and we’ll be buying another Stockman.

The helmet is light and comfortable enough to forget you’re wearing it and the ventilation is just as good as the equestrian helmets we’ve been using.

Equestrian helmet (left) vs Stockman (right)

Equestrian helmet (left) vs Stockman (right)

What it has over the equestrian helmets is added protection. The HQ Stockman 2 meets NZS 8600 standard as recommended by both the Queensland and NSW coroners.

The helmet is so strong, it passes the test used to gauge the protectiveness of road bike helmets, although only based on one impact, rather than two, as Quadbar’s Dave Robertson explains:

“The ‘Impact energy attenuation test’ is the same test for the Australian motorcycle (and USA DOT motorcycle) standards however the test is repeated a second time on each location on the helmet for motorcycle helmets,” Mr Robertson said.

“Helmet expert, Dr Terry Smith form California USA, at the Qld coroner’s inquest went to a lot of trouble to explain that the second test is to ensure protection in a case where the ‘head strikes twice in the same location’ and MUST not be interpreted as providing double the protection. The speed impact is the same on both tests and the protection must be below 300g. The level of protection of a motorcycle helmet is in the fact that it can withstand a second impact on the same location on the helmet which is more likely at higher speeds. It (motorcycle helmet) is not tested at a higher speed than NZS 8600 however will most likely withstand multiple impacts.”

If you’re riding a quad on the farm without a helmet, get a Stockman. It’s the sort of helmet you forget to take off and it might just save your neck.

EDIT: A helmet compliant with NZS 8600 called the AgHat came on the market a couple of years ago but we didn’t adopt it at our farm because it had no ventilation.

Fonterra’s Judith Swales explains Theo’s thoughts on Aussie dairy farmers

Theo Spierings Fonterra chief executive Theo Spierings. Photo: Pat Scala, Sydney Morning Herald

Fonterra is one of the world’s biggest dairy companies with a glittering history. A cooperative in New Zealand, Fonterra is also Australia’s second-largest processor.

Just last year, Fonterra delivered a stellar Kiwi farmgate price far better than anything ever enjoyed by Aussie dairy farmers. Analysts enjoyed debating why Australia could not emulate its success. Today, the co-op is under intense scrutiny from its shareholders.

As I mentioned in the previous post, farmers in New Zealand are doing it very tough this year and Fonterra Australia chalked up losses last year.

Then, last week, Fonterra’s chief executive Theo Spierings​, was quoted in the Sydney Morning Herald  in a story headlined Aussie farmers being overpaid amid global dairy rout, says Fonterra boss.

After quoting Mr Spierings as saying the current price of $5.60kg MS could not be supported, the Sydney Morning Herald reported:

Mr Spierings said the method on how Australian farmers were paid needed to change so it wasn’t based just on the farm-gate price and matched other processors.

“It’s loyalty and skin in the game that can lead to an upside. You can call it a dividend, or whatever, a bonus per kilogram milk solids,” he said.

“But we need to have the conversation now about what the endgame looks like. What is the value being created – what’s the size of the cake? Then we need to have a good debate with farmers … about how are we going to share – how are we going to cut the cake?

The comments raised a lot of questions for a Fonterra Australia supplier like me, especially in respect to the “Bonlac Agreement”, which extends until 2019 and commits Fonterra to paying its Australian suppliers a price that equals or betters the dominant processor.

I put some of those questions to Fonterra Australia and am grateful to managing director, Judith Swales, for answering them.

Judith Swales, Fonterra Australia managing director. Pic source: Australian Dairy Farmer

MMM: Why has Theo chosen to telegraph a change in Fonterra’s dealings with Australian farmers via the media rather than by opening a conversation with farmers?
JS: Theo was commenting on the global dairy situation and its impacts for Australia. He was putting a voice to issues that many in the industry are well aware of. These are difficult issues and shouldn’t be shied away from, and as an industry we need to address them.

MMM: Are there any inaccuracies in the article you would like to correct?
JS: The headline was unfortunate. The main issue to point out is that the problem is not around Australians dairy farmers being overpaid – as stated in the headline – but rather the impact global volatility is having on the sustainability of current dairy pricing in Australia. What’s important, is that we’re sending the right price signals to our farmers to avoid any surprises and so that they can budget for various scenarios.

MMM: Theo appears to cast doubt on the Bonlac agreement that ensures farmgate prices match or better the dominant competitor. Will Fonterra honour that agreement this year?
JS: We remain fully committed to honouring the Bonlac agreement. We are focussed on giving our farmers line of sight to the price we can pay this year as quickly and accurately as we can. The price we pay this year must be sustainable. We do not want to sacrifice investment in our long term strategy, which aims to deliver returns above the Benchmark price, in response to short term, tactical pricing pressures.

MMM: Does Fonterra remain committed to the Bonlac agreement in the medium to long term?
JS: We view the BSC Milk Supply Agreement as a baseline. We always strive to aspire to more – whether it be with our SupportCrew services, price risk management tools or our suppliers receiving the highest milk price (as found in an independent report by Ian Gibb for the 2013/14 season). We expect our relationship with our suppliers to continue to evolve over time.

MMM: “It’s loyalty and skin in the game that can lead to an upside. You can call it a dividend, or whatever, a bonus per kilogram milk solids,” says Theo. Does this mean special pricing that favours long-term contracts and large farms?
JS: Achieving a mechanism for determining milk price that drives behaviours that support the success of Fonterra’s strategy for all suppliers is our aim. This work is always evolving and we will continue work with BSC on this.

MMM: Farmers who supply milk to Fonterra Australia are suppliers rather than shareholders. What does Theo mean by “sharing the cake”?
JS: We have always said that the best dairy industry model is the one where everyone can get a sustainable return. Farmers need to be able to make money, processors need to make money and so do customers, like retailers. And that’s what he means by sharing the cake.

MMM: Does Fonterra continue to have a long term commitment to Australia?

JS: Absolutely we are committed long term to Australia; and our Board continues to voice this commitment. Australia is one of our four key strategic markets for Fonterra. It is a key plank to our global multi-hub strategy, which complements our Retail and Foodservice business. We continue to invest: we are progressing our Beingmate partnership; we have plans to rebuild our cheese plant in Stanhope; and only this week we commissioned a multi-million dollar Beverages plant in Cobden.

Thank you very much, Judith Swales!

Why I’m signing the Farmer’s Letter about climate change

The view from the house after the fire

The view from the house after the fire

Will you help me? Apparently, just before Australia goes to the Paris climate summit, proof is needed that real, live, everyday farmers want the government to do something about climate change.

According to today’s Sydney Morning Herald:

“A cabal of regional and rural Liberal members, centred in Western Australia and supported by a number of conservative MPs, will force a vote at Saturday’s federal council meeting in Melbourne on whether Parliament should “examine the evidence” around climate change before agreeing to any post-2020 emissions cuts.”

“Liberal sources told Fairfax Media that Environment Minister Greg Hunt is likely to be forced to step in and fight off the motion on Saturday by asserting the Abbott government accepts climate change is real and is willing to work with other nations to combat its effects.”

So, to show that farmers who want action are more than a figment of a latte-sipping lefty’s imagination, I’ve signed The Farmers’ Letter, which says simply:

“Aussie farmers are on the front line of rising temperatures and more extreme weather, so global warming is a priority issue for rural, regional and remote Australia. An ambitious target to cut carbon pollution, a transition plan away from coal and gas towards renewable energy, and a strong deal at the UN climate talks in Paris this December are all in the interests of Aussie farmers and our families.”

Dozens of farmers from across the country are joining me and I hope you will too, so that, like the Whos from Whoville, we can prove that we exist.

Noise

Perhaps climate change shifts are especially obvious to dairy farmers because these days, everything on a dairy farm is measured to the nth degree. We can tell you how many days it took for the cows to get in calf, how much grass we grew this week and how many litres of milk were made in the last 12 hours.

It’s a fact that less milk is made from listless cows in a heatwave and the cost of a litre of milk skyrockets during drought, fire or flood. And the locals are worried. Just as Alex was about to be born, I joined a meeting of dairy farmers in town to discuss what we could do to adapt to climate change.

I can’t tell you how impressed I was that individual farmers were already doing so much and were so hungry for more information. Four years on and I think it’s all become just another part of the way we farm around here.

But if we are really going to pass the farm on to the kids in a better state than we found it, we’d better make sure we are heard on climate change. Please, if the thought of doing nothing doesn’t sit well with you, visit www.farmerletter.org and show them you’re for real.

Instilling a love of nature the Brave New World way

When Alex found this gorgeous green grocer cicada, he was a little wary. But, of course, cicadas don’t bite – they’re sap suckers – so I encouraged our little people to have a really good look at the marvellous creature.

CicadaZoeGrinLoRes

Once Alex saw Big Sister having fun with the green grocer, he was more inclined to get into the act, beginning with a cautious stalking session.

CicadaStalking

Then, with some trepidation, he let it creep slowly across his fingers and was actually starting to enjoy the encounter when the impossible happened: the wretched winged wolf BIT him.

CicadaDrill

Alex’s hands shook and tears began to well but the green grocer clung on with all six hooks and the proboscis too! We finally flicked it off a little less carefully, I must admit, than I’d like.  Twenty minutes later, Little Man was off for his afternoon nap, only to wake with a “Cada hurting me, Mama!” nightmare.

So much for instilling a love of nature. More like a Brave New World conditioning session.

PS: If you were under the illusion that cicadas won’t hurt you, watch the reaction of this grown-up: