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.
DairyNZ was keen for Climate Change Minister James Shaw to go into bat for Kiwi dairy farmers and the split gas approach at the recent COP26.
The dairy industry good body wanted Shaw to share NZ's story as the world's lowest emissions dairy producer at the 13-day conference in Glasgow.
"We hope the Government will still strongly advocate for split gas and advanced metrics like GWP*," says chief executive Dr Tim Mackle.
He claims the current metric used internationally, GWP100, overstates the warming impact of methane emissions by three to four times, when emissions are stable.
"Agriculture's methane emissions have stabilised in New Zealand, so they are not causing additional global warming; any reductions will contribute to less warming. On the other hand, CO2 emissions continue to add to warming until emissions reach net-zero," Mackle explains.
A split gas approach highlights the difference between short and long-lived gases and their individual impact on warming. Mackle says all sectors - not just agriculture - need to pull their weight.
“We want to see New Zealand show real leadership on the world stage by strongly advocating for the scientifically-robust approach we have taken to methane,” he adds. “Kiwi dairy farmers are up for continuing to manage emissions and improve efficiency, and on-farm work is underway nationwide, but they can’t be singled out as the only sector that needs to take action.”
Mackle says it is important that New Zealanders don’t feel our agriculture sector is not pulling its weight on the world stage.
“We want to see other nations also legislating specific methane targets and following New Zealand’s lead.”
He adds that the country’s split gas approach is backed up by a world-first climate action partnership – He Waka Eke Noa – to reduce agricultural emissions, comprising the primary sector, government and iwi.
COP26 included an agreement to reduce methane by 30% by 2030.
Mackle says while the dairy sector is supportive of reducing global methane, a distinction needs to be drawn between biogenic and non-biogenic methane.
“Not all methane is created equal – biogenic methane is expelled from ruminant animals and fossil fuel methane is from oil and gas exploration.”
He says the latter must receive significant focus as a low-hanging fruit, while the NZ dairy sector, partners and government are investing significantly and working together on a long-term R&D plan to address biogenic methane.
“We want to highlight that New Zealand agriculture is taking a leading role in climate change research,” Mackle adds. “New Zealand’s best contribution to addressing climate change, particularly in agriculture, is to find solutions all agricultural nations can adopt to address biogenic methane emissions.”
Options being researched include methane vaccines and inhibitors, selective breeding of low methane animals and forages and technology uptake.
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