Industry good – DairyNZ

Understanding key profit and environmental numbers helps farmers to identify improvements in their farm systems.

Know your numbers

Keely Buckingham

DairyNZ solutions and development specialist

There’s a lot of policy talk at the moment that has many farmers considering what they can do now to adapt for the future.

One of my key pieces of advice is to understand what your key profit and environmental numbers are, to identify improvements in your farm system. It may seem a little overwhelming, but by breaking it down you can easily get to grips with your farm numbers, and what these mean for your business.

What are the key numbers to know?

Some of the environmental key indicators are purchased nitrogen surplus, nitrogen conversion efficiency, emissions per milk solid (GHG/kg MS) and methane, while your profit is analysed through operating profit per hectare.

Where do the numbers come from?

Your metrics and farm numbers are calculated from data you have already collected and submitted to your dairy supply company or consultant to meet regulatory requirements.

Those companies then input your information into programmes or models, such as OverseerFM or the AIM model, to calculate your farm’s numbers. Different reports will include different information, but the main ones reported are the “key numbers to know” mentioned above.

What should I do with these numbers?

Once you know your numbers, one of the key things to do is benchmark against other farms.

This can be done through the environmental reports from your dairy company, which contain benchmarks to help understand where your business fits, compared to others.

These benchmarks give an indication of what good looks like so you can see where you need to be, if you aren’t already there.

DairyNZ has a range of resources to help, including regional graphs to plot your information on, allowing you to compare your farm at a regional level for operating profit, methane emissions and purchased nitrogen surplus.

DairyBase also allows you to gain a full analysis of your farm numbers, including benchmarking farm profitability.

“Once you know your numbers, one of the key things to do is benchmark against other farms.”

What do I do next?

You might think everyone operates with DairyNZ

the same way, but your numbers are not the same as your neighbour’s. So, once you know your numbers, look at your farm system and consider where you can create more efficiencies.

Find the areas that need the most attention, such as nitrogen fertiliser, imported feed or effluent, and determine what adjustments can be made to become more efficient and adaptable for future.

For example, a significant driver for methane emissions is total feed eaten, so this may be something to consider on your farm.

Any practice that increases feed use efficiency will reduce emissions, without affecting farm profitability.

This would include reducing the amount of feed going to unproductive animals by improving reproductive performance or reducing feed going to maintenance, by increasing per-cow production.

Our DairyNZ regional teams are always happy to help, so if you have any questions or want support, contact your local team. n

MORE:

DairyNZ is running regional benchmarking events in March and April, so keep an eye on your local DairyNZ events calendar and come along. More information is available at dairynz.co.nz/knowyournumbers

Wetland law aids farmers

Changes to the Essential Freshwater 2020 wetland regulations, which will come into effect in 2023, will help farmers continue to invest in wetland restoration, and provide better wetland restoration, maintenance and water storage options for farmers according to DairyNZ. “We were concerned about initial government proposals that had regulations applying to constructed wetlands,” says Dr David Burger, DairyNZ general manager for sustainable dairy.

“It made getting consents for constructed wetlands difficult for farmers and could have discouraged them from creating wetlands that would benefit the environment. This has now changed, which is positive for farmers and the environment.

“The changes are timely, as more farmers are looking to reduce their environmental impact, and there’s growing interest in re-establishing and constructing new wetlands,” Burger says.

DairyNZ continues to encourage farmers to invest in wetland restoration due to the environmental benefits. Its water science team works with other science organisations to increase understanding of wetland performance and how farmers can best place new wetlands in catchments.

Wetlands can significantly reduce nutrient and sediment losses on farms and improve water quality. They also boost biodiversity and can provide a habitat for birds and fish. A constructed wetland about 1% of the catchment size can remove an average of 20-25% of nitrogen and 50% of sediment.

In initial regulations, resource consents were not obtainable for construction of any water storage infrastructure that could adversely impact the extent or values of a wetland.

The new consenting pathway has several conditions, including that the water storage infrastructure needs to provide significant national or regional benefits. These conditions set a high bar for the development of water infrastructure in and around wetland areas and are an improvement on previous regulations, which prevented farmers from creating storage structures if they would adversely impact the extent of or values within a wetland.

“The change addresses concerns raised in DairyNZ’s 2021 government submission on proposed wetland management changes to the Resource Management (National Environmental Standards for Freshwater) Regulations 2020,” Burger says.

DairyNZ also made a joint submission with Fish & Game New Zealand on aligned positions and continues to support farmers wanting to protect and restore existing wetlands.

Tools are available to help farmers manage and improve wetlands on-farm, such as the Constructed Wetland Practitioner Guide – Design and Performance Estimates, which contain information on designing and constructing wetlands.

Interested farmers should contact an environmental consultant to work through the guidance and seek regional council advice about consents and funding opportunities.

Dr David Burger, DairyNZ general manager for sustainable dairy, says the changes to the freshwater legislation that will come into effect this year will help farmers in their system management. Wetlands can significantly reduce nutrient and sediment losses on farms to improve water quality.

“The changes are timely, as more farmers are looking to reduce their environmental impact, and there’s growing interest in re-establishing and constructing new wetlands.” Dr David Burger