Dairy sector profit still on the table, but margin gap tightens
DairyNZ’s latest Econ Tracker update shows most farms will still finish the season in a positive position, although the gap has narrowed compared with early season expectations.
Environment policy manager Dr Mike Scarsbrook says the dairy industry is pleased to see the 'Environment Aotearoa 2015' report, released last week, filling a vacuum for robust and independent national reporting.
"Dairying is taking the lead in protecting the rural environment, as seen in many improving trends, but there is more to do. The report shows... not just dairy farming but other sectors -- and our urban lifestyles -- affecting our environment. We all need to work together on this.
"It's in everyone's interest to have a single, common set of independent, robust data to measure progress. Like everyone else, farmers are keen to see whether their investments to manage water quality are making a difference to their communities.
"It's important we continue to track progress, improving and learning what works or doesn't. As more rules and regulations are set and affect farmers we will want to know if the environment is benefitting."
Scarsbrook says that since the last State of the Environment report in 2007, dairy farmers have acted voluntarily to reduce their industry's footprint.
"For example, two years ago we launched a new Water Accord covering all dairy farmers. Dairy companies have reported on nearly 24,000km of waterways -- that's 94% -- from which all stock are now excluded. This report identifies a 14% improvement in water clarity since 1989 linked to stock exclusion, which keeps sediment out of waterways by protecting banks and beds from collapse.
"Improvements will now continue at pace as more of the 'exclusion' effect is felt. With dairy farms now also managing soil structure and runoff to waterways by grass filters and plantings, we can also expect lots more improvement in nutrient concentrations, algae and biodiversity.
"More robust and regular reporting on all our Water Accord commitments is allowing the dairy industry to focus support where it is needed most urgently.
"The rate of significant non-compliance of farm dairy effluent systems for the 2013-14 season was 7%, down almost half on 2012. While we are still confirming the numbers for the 2014-15 season, this trend is continuing to improve," he says.
"Farmers have made big investments in environmental initiatives themselves and through the $13 million spent each year by DairyNZ, including 15 large waterway projects nationwide, the Waikato Wetlands Showcase, hundreds of Sustainable Milk Plans direct to farmers and regional council initiatives. We are also doing research into mitigating soil compaction.
"Farmers themselves have also put their money into our environment. $1 billion over the past five years has been spent by farmers on effluent systems, riparian planting and retiring sensitive land – that equates to $90,000 by each dairy business in NZ."
At least 600 Sustainable Milk Plans executed in the Upper Waikato alone are slashing nutrient loss to waterways, Scarsbrook says.
"We are not waiting for rules to be put in place: farmers... are putting the right practices in the right places for the long term – learning all the time what works best and trying to perform even better."
The dairy industry is currently evolving, he says. "We are changing to new farming techniques and systems with a lower environmental footprint while ensuring the country -- and particularly rural towns and communities -- can continue to benefit from farmers remaining competitive and profitable.
"Nutrient management is our next big challenge and we're working with councils to ensure rules are put in place that reflect local community aspirations for water use and quality," says Scarsbrook.
