Low-footprint feed holds the key

New Zealand’s pasture-based dairy systems are complex and dynamic, with many interacting parts. Focusing too much on one aspect can create risks if it compromises others.

Milk processor incentives have increased interest in emissions intensity – the emissions per unit of product, such as per kilogram of milksolids, or fat and protein-corrected milk.

This has raised questions about how farmers can reduce their emissions intensity and whether doing so might have unintended impacts elsewhere in a farm business.

Emissions intensity is an important metric used internationally to compare different sources of milk. Customers who buy milk from our processors to produce consumer goods are looking to reduce their greenhouse gas (GHG) footprints, so they’re paying closer attention to the emissions associated with the milk they source.

As 95% of New Zealand’s milk is exported, the dairy sector needs to respond to customer expectations. However, we also have other goals, including the government’s targets to reduce total emissions, along with profitability and broader sustainability outcomes like water quality.

The challenge is finding the balance — reducing emissions intensity while still achieving good overall farm performance, especially profitability and nitrogen efficiency.

Not all feed is equal

Different types of supplementary feed come with varying levels of embedded emissions, depending on how they’re produced and transported. For example, palm kernel extract (PKE) typically has higher lifecycle emissions than the same amount of silage.

So, if one farm is using PKE at a similar level to another farm using maize silage, the PKE farm is likely to have higher overall emissions due to the feed’s embedded footprint.

Imported feeds can also bring additional nitrogen into the farm system, which may contribute to a higher nitrogen surplus and increase the risk of nitrogen losses to the environment.

To gain a deeper understanding of the relationships between physical and financial outputs on-farm, DairyNZ partnered with Fonterra and LIC. The aim was to provide clearer insights and to support consistent messaging across the sector.

The analysis draws on a new and uniquely comprehensive dataset — farm financials from DairyBase, herd-level data from LIC (like breeding worth and 6-week in-calf rate), and a range of production and emissions metrics from Fonterra. Together, these give a much clearer picture of what’s happening on-farm.

Data from each organisation was joined and anonymised before being analysed by DairyNZ data scientists, supported by technical input from Fonterra.

While this isn’t a controlled experiment, the analysis of real-world farm data allows us to spot patterns and associations. It doesn’t prove cause and effect, but it does provide valuable insights.

A project in collaboration with:

So, what did we find?

There was no direct relationship between profit and emissions intensity — a farm can be highly profitable with either low or high emissions intensity.

However, when compared with high-profit farms that had higher emissions intensity, those with both high profit and lower emissions intensity had some key differences (see Table 1).

They relied more on homegrown feed (both per hectare and as a proportion of total feed), used fewer high-emission supplements like PKE and had a lower nitrogen surplus.

Although cow performance was good on the high-profit, low-emissions farms, it wasn’t extreme — cows were producing an average of 89% of their liveweight in milksolids (kgMS/kgLWT) in the Waikato and 96% in Canterbury (see Table 1). That means cows produced close to their liveweight in milksolids, but there didn’t seem to be any advantage in going beyond that.

As expected, more feed eaten per cow (and a relative increase in production) can help reduce emissions intensity, but the source of that feed matters. Higher total feed (irrespective of source) was linked to higher total emissions and purchased nitrogen surplus (PNS), while farms using more homegrown feed had lower PNS and less risk of increasing total emissions.

Aiming for lower emissions intensity through more production per cow can work, but if it relies on high-footprint feeds, it may increase total emissions and nitrogen surplus, or reduce profitability. That’s why the type, cost and source of feed matters, not just the production outcome.

These findings are consistent with previous DairyNZ research, which has long highlighted the value of homegrown feed. Now there’s another incentive – it can help reduce emissions intensity.

Importantly, the analysis showed that there are opportunities for all farmers, no matter where they are. Within each region, there was no specific concentration of high-profit, low-emissions farms — they were spread around (see Figure 1).

That means any farm, anywhere, has the potential to improve emissions intensity without compromising other key outcomes. Some farmers are already making good progress — maybe even you — and there’s a real chance to share what’s working and learn from each other.

Learn more at dairynz.co.nz/emissions-profit

Emissions terms to know

LCA emissions (Life Cycle Analysis emissions)
Greenhouse gas emissions measured across the whole dairy production chain – from on-farm sources and off-farm inputs like feed, fertiliser and fuel, through to milk processing.

Emissions intensity
The amount of greenhouse gases produced for each unit of product, such as per kilogram of milksolids, or fat and protein corrected milk.

Homegrown feed
Feed that is grown and harvested on the farm, such as pasture and crops, rather than imported supplements.

Embedded emissions
Greenhouse gases released during the production and transport of inputs like feed and fertiliser. These emissions are “built into” the product before it reaches the farm.

Purchased nitrogen surplus (PNS)
The difference between nitrogen inputs (fertiliser and imported feed) and nitrogen outputs (milk, meat, crops and exported feeds). A lower PNS means nitrogen is used more efficiently, while a higher PNS indicates more nitrogen could be lost to the environment.

Total emissions
The total greenhouse gases produced by an entity (e.g. a farm, a business, or nationally as a country) without considering the amount of product produced.

Fat and Protein Corrected Milk (FPCM)
A way to adjust milk volume to a standard fat (4%) and protein (3.3%) level. This makes it easier to fairly compare milk production between farms or herds that produce milk with different fat and protein contents.

Louise Cook
Fonterra programme manager (environment), on-farm excellence