THE N CAP IN TAUPO A FARMER PERSPECTIVE. NZARM/Fert Research Conference 11 June 2012 MIKE BARTON.

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1 THE N CAP IN TAUPO A FARMER PERSPECTIVE NZARM/Fert Research Conference 11 June 2012 MIKE BARTON. CONTENT An outline of the process leading to capping Nitrogen Emissions from farms in the Taupo catchment A brief look at the current NZ farming business model and the interface with emissions capping Why Taupo Beef? Mike Barton 1

TAUPO CATCHMENT THE HISTORY OF THE N CAP FROM A FARMERS PERSPECTIVE We became aware of the issue in 2000 Incorporated Society formed Taupo Lake Care (TLC) to represent farmer interests in

2 TAUPO CATCHMENT THE HISTORY OF THE N CAP FROM A FARMERS PERSPECTIVE We became aware of the issue in 2000 Incorporated Society formed Taupo Lake Care (TLC) to represent farmer interests in negotiations with EW Negotiated to balance Lake protection with economic viability Advocate for and participate in research Represented the majority of catchment farmers and Maori incorporations farms Mike Barton 2

3 NITROGEN LEACHED Tussock, Native Forest - Plantation Forest Sheep and Beef Farms Dairy Farms 3kgs/ha 3kgs/ha 17kgs/ha 55kgs+/ha Farming emits 93% of the Manageable Nitrogen entering the Lake 4 Dairy farms -101 Extensive Sheep and Beef farms A NITROGEN CAP -THE REALITIES Is a cap on stock urine Essentially a cap on stocking rate/production A production cap is an income cap under existing commodity regimes To remove 20% of N we need to shut down about 28% of the farmland in the catchment. Mike Barton 3

4 CONSENTED FARMERS - Applying for a consent that limits our production in perpetuity-significant implications for farming business models Six farms modeled for Environment Court - insolvent Length of consent about the length of an average mortgage or less than one rotation of trees, but at least we know what we can do for 25 years OUR FARM- THE IMPLICATIONS Discontinued with breeding cows based on gross margin per kg of N leached Need to grow young animals as rapidly as possible no 2 nd wintering Spraying or cultivating for pasture renewal unlikely to be viable/allowable (permanent pastures?) Mike Barton 4

5 LESSONS TO DATE Taupo farmers have had a Clean Streams Accord since 1983 and have consistently won environmental awards yet we still have a problem! Environmental impacts will likely define production limits for all farmers in the future THE CURRENT SHEEP AND BEEF FARM BUSINESS MODEL Static returns for the last 25 years- Profit before tax 1984/5 - $70.24/ha, 2007/8 - $13.91/ha On farm costs have risen 38% between 2002 and 2008 Mike Barton 5

BEEF FARM BUSINESS MODEL My current winter stocking rate is 3.5 cattle/ha. In 1985-1.

6 BEEF FARM BUSINESS MODEL My current winter stocking rate is 3.5 cattle/ha. In animals/ha Farmers have taken up science driven production increases to counter static returns Have we now reached the limits of that business model? DO CONSUMERS PAY A PREMIUM FOR BEEF PRODUCED UNDER A CATCHMENT MANAGEMENT PLAN THAT PROTECTS LAKE TAUPO? Mike Barton 6

7 Taupo Beef CERTIFIED BY WAIKATO REGIONAL COUNCIL TAUPO BEEF- WHAT IS IT? RADIO FREQUENCY TRACKED FROM THREE FARMS GROWN AND FINISHED QUICKLY CHARLOLAISE/ANGUS CROSS AGED FOR A MINIMUM OF 4 WEEKS SOLD AT A PREMIUM IN TAUPO RESTAURANTS AND BUTCHERY Mike Barton 7

8 TAUPO BEEF THE RESULTS CONSUMERS HAVE PAID A SIGNIFICANT PREMIUM OUTSTANDING FEEDBACK FROM CHEFS AND DINNERS DEMAND EXCEEDS OUR ABILITY TO SUPPLY NEED TO BUILD A BUSINESS MODEL THAT RETURNS A PREMIUM TO CAPPED FARMERS WE CAN FARM IN A WAY THAT PROTECTS WATER QUALITY DO YOU ACTIVELY SEEK OUT FOOD THAT HAS A MINIMAL IMPACT ON WATER QUALITY? WHAT PREMIUM ARE YOU PREPARED TO PAY FOR SUCH FOOD? IS THIS THE REAL TEST OF HOW MUCH YOU VALUE WATER QUALITY? Mike Barton 8

FARMING IN THE THICK OF IT Craige Mackenzie Email: craige.

9 FARMING IN THE THICK OF IT Craige Mackenzie Craige Mackenzie 1 Craige Mackenzie 1

10 The Stock Factor Weather Nutrients Data Collection the THICK of IT Markets The People Factor The all encompassing legislation/regulation/ recording Paper War Craige Mackenzie 2 Farmers are in the thick of it on a whole range of different levels Where to start???... This is what it looks like from our end Craige Mackenzie 2

Farming Businesses Greenvale Pastures Ltd 200 ha intensive cropping Three Springs Dairies Ltd 330 ha high output dairying Agri Optics New Zealand Ltd Mackenzie Research Precision Agriculture company

We specialise in small seed production 330 ha 1200 Cow Dairy Operation The farm is run by a 24% variable order Share-milker with 5 staff.

11 Farming Businesses Greenvale Pastures Ltd 200 ha intensive cropping Three Springs Dairies Ltd 330 ha high output dairying Agri Optics New Zealand Ltd Mackenzie Research Precision Agriculture company Group Ltd Farming technology Craige Mackenzie 3 Run 200 ha intensive Irrigated arable farm Grow wheat, Ryegrass, carrots, radish. We specialise in small seed production 330 ha 1200 Cow Dairy Operation The farm is run by a 24% variable order Share-milker with 5 staff. The farm is a pasture based system which is supplemented with grain, canola meal and silage 2010 along with daughter Jemma we started Agri Optics. Specialising in data management for farmers, fertiliser companies, and machinery retailers. Electro Magnetic (EM) soil surveying service. Trimble distributors for GreenSeeker, WeedSeeker and Trimble software. In 2010 we also started Mackenzie Research Group To help with new initiatives and the patenting of Smart N fertiliser application system. Craige Mackenzie 3

in China through to corporate farmers in the US and Europe. Met with 6 US Senators Raj Khosla had a large impact on my ideas.

12 Nuffield Scholarship Understanding our Carbon Footprint in Farming Systems Grain Drying in -China 80-a-side parallel shed -USA Craige Mackenzie 4 In 2008 I was fortunate to be awarded a Nuffield Scholarship I met a lot of amazing people from peasant farmers in China through to corporate farmers in the US and Europe. Met with 6 US Senators Raj Khosla had a large impact on my ideas. Until then I thought PA was big tractors and gear. Not common in smaller NZ farms Certainly not seen on pastoral farms. Craige Mackenzie 4

In-shed Technology RFID tag reader on milking platform Delivery of cow-specific feed

from cow Craige Mackenzie 5 Talking about tools for farms and looking specifically at

Automatically delivered a measured feed ration match production.

production Shed has Auto Cup Removers, Teat Sprayers, Auto Drafting and heat recovery

13 In-shed Technology RFID tag reader on milking platform Delivery of cow-specific feed ration Cow eating measured feed ration Milk meters collecting milk production data from cow Craige Mackenzie 5 Talking about tools for farms and looking specifically at our farm All Cows have RFID Tags Read each time onto the milking platform Automatically delivered a measured feed ration match production. Grouping parameters adjusted weekly Milk meters used to measure quality standards and production Shed has Auto Cup Removers, Teat Sprayers, Auto Drafting and heat recovery system Have been using Precision techniques for our cows Now we are applying the same precision on our land Craige Mackenzie 5

14 Making it Pay with Mapping All farms have variability, some natural and some man-made. Not every area was paying its way. Mapping allows us to manage areas differently, ensuring every area is profitable MAPPING Craige Mackenzie 6 Courtesy of BILLIRWINARTS All Farms have variability - some natural, some man-made. Not all areas are paying their way and we need to know where they are. Our forefathers had it all fenced off and we are now looking for tools to fix it. Mapping allows us to manage these differently ensuring all areas are profitable Craige Mackenzie 6

Case Study 1: Pasture Mapping with GreenSeeker Mapping biomass differences High Nitrogen levels Potential savings with the use of crop sensors MAPPING Craige Mackenzie

High and low. Some is also from soil variability, stock behaviour and movements. Large savings in N without production loses.

15 Case Study 1: Pasture Mapping with GreenSeeker Mapping biomass differences High Nitrogen levels Potential savings with the use of crop sensors MAPPING Craige Mackenzie 7 We have been using GreenSeeker on the cropping farm with great success and are using it on the Dairy farm. Variability of effluent has had to be dealt with. High and low. Some is also from soil variability, stock behaviour and movements. Large savings in N without production loses. Over the farm we have reduced our Nitrogen use from over 300 kg/ha to 170 kg/ha with plenty more savings to come. Large increase in clover in the pastures without reduction in dry matter production Craige Mackenzie 7

Case Study 1: Application & Exclusion Zones High nitrogen zone Gateway Water trough VARIABLE RATE APPLICATION: Traditional application 70 kg/ha Urea Average application rate reduced to 49 kg/ha Urea

16 Case Study 1: Application & Exclusion Zones High nitrogen zone Gateway Water trough VARIABLE RATE APPLICATION: Traditional application 70 kg/ha Urea Average application rate reduced to 49 kg/ha Urea Saving 21 kg/ha Urea $19 /ha Craige Mackenzie 8 MAPPING Application Rates specific to needs of different zones. Exclusion zones can be set Close to rivers/ creeks /gateways Truck Drivers can not over apply product or apply in wrong field Provides traceability. Craige Mackenzie 8

Change of Mindset about Effluent Recognised as a very beneficial nutrient source Look at the distribution of material Changed our dispersal system MAPPING Reduction in imported nutrients N 2.5, P 0.

17 Change of Mindset about Effluent Recognised as a very beneficial nutrient source Look at the distribution of material Changed our dispersal system MAPPING Reduction in imported nutrients N 2.5, P 0.1, K 1.6, Ca 9.3, Mg 2.2, Na 9.5 Craige Mackenzie 9 We have changed our mindset around how we deal with our effluent. We don t have an effluent disposal system..we have an effluent dispersal system Now seen as a very important nutrient source to help imported nutrient costs We were not happy with our system so moved to a graduated system over the pivot length(vri Next) We have increased the dispersal area to maximise the use and reduce the application rate per hectare Craige Mackenzie 9

Case Study 2: OLSEN P Soil Testing Grid & Zonal Soil testing GPS located points Dominant Effluent Zones Mineral N tests VARIABLE RATE APPLICATION: 45% saving in base fertiliser and lime $22,000

Measure / Model / Mitigate MAPPING Craige Mackenzie 10 We have begun grid and zonal soil sampling to get a accurate idea of farms variability All points are GPS located for testing and building maps.

18 Case Study 2: OLSEN P Soil Testing Grid & Zonal Soil testing GPS located points Dominant Effluent Zones Mineral N tests VARIABLE RATE APPLICATION: 45% saving in base fertiliser and lime $22,000 Saving! Measure / Model / Mitigate MAPPING Craige Mackenzie 10 We have begun grid and zonal soil sampling to get a accurate idea of farms variability All points are GPS located for testing and building maps. Effluent area is dominant as seen here Deep Mineral N tests are taken in the spring on the cropping farm for most crops Deep N tests are also taken on the dairy farm to access available N ECO-N is applied We have reduced the amount of base fertiliser by 45% - $20K. If you don t measure what going on, on the farm, you can t make use of the models that are become available and in turn, You can t undertake effective mitigation measures. Craige Mackenzie 10

Case Study 3: Zonal Management of ph Lime Phosphorus Nitrogen VARIABLE RATE APPLICATION: Application from traditional testing 75 tonnes Total application reduced to 10

Trucks have not returned to where they should have. Trucks have also run out lime when the farmers are not looking.

Grid soil sampling and data management allows us to fix all these issues with variable rate fertiliser applications By using Precision Ag technology we have added

19 Case Study 3: Zonal Management of ph Lime Phosphorus Nitrogen VARIABLE RATE APPLICATION: Application from traditional testing 75 tonnes Total application reduced to 10 tonnes Saving total $2,925. $ 195/ha MAPPING Craige Mackenzie 11 Some variation that occurs is natural, but a significant amount is man made. Trucks have not returned to where they should have. Trucks have also run out lime when the farmers are not looking. We have removed fences for irrigation and large centre pivots, but are looking for tools to deal with the variability. Grid soil sampling and data management allows us to fix all these issues with variable rate fertiliser applications By using Precision Ag technology we have added bonuses of o o o o Applying the correct amount - no double application to use up excess product on truck Applying product only to the assigned paddock so no field mix-ups Records for traceability purposes Can create exclusions zones around sensitive areas so no chance of application. Craige Mackenzie 11

Pest damage has reduced reliance on Insecticides Site specific application

20 Case Study 4: GreenSeeker for Pest Control MAPPING Grass Grub impact on Ryegrass Establishment Craige Mackenzie 12 The use of GreenSeeker to map Pest damage has reduced reliance on Insecticides Site specific application will help avoid resistance and increase effectiveness of products. Craige Mackenzie 12

can be mapped. Soil testing can be undertaken once areas have been given a GIS location.

21 Case Study 5: GreenSeeker for Micro-nutrient Issues MAPPING Uneven growth in a ryegrass seed crop Craige Mackenzie 13 Over application of Lime in this case has created micro nutrients issues that can be mapped. Soil testing can be undertaken once areas have been given a GIS location. Build Variable rate application maps to reduce inputs and improve applicators accuracy Craige Mackenzie 13

Case Study 6: Profit Mapping Case Study 3: Net Profit ($/ha) MAPPING Craige Mackenzie 14 When its all said and done though, yield is great and technology maybe fun, but if it s not having a

This map shows the actual yield throughout the areas of the paddock, ranging from lows of just 14kg/ha through to 3715kg/ha And when we look at the $ of profit per hectare, the areas in the red

22 Case Study 6: Profit Mapping Case Study 3: Net Profit ($/ha) MAPPING Craige Mackenzie 14 When its all said and done though, yield is great and technology maybe fun, but if it s not having a positive impact on our bottom line, it s most probably just an expensive hobby. This is where the profit mapping comes in to play, to show how effective our decision making has been. This map shows the actual yield throughout the areas of the paddock, ranging from lows of just 14kg/ha through to 3715kg/ha And when we look at the $ of profit per hectare, the areas in the red are costing us money, while the dark blue are making over $7500/ha. Management decisions have been made for the red areas so that we can minimise their impact on our bottom line in the future. Craige Mackenzie 14

Electro Magnetic (EM) Mapping Indicates variability in Soil Texture Moisture Content Depth to Stone Clay Content Maps: Different soil types and their respective nutrient sources Different organic

23 Electro Magnetic (EM) Mapping Indicates variability in Soil Texture Moisture Content Depth to Stone Clay Content Maps: Different soil types and their respective nutrient sources Different organic matter levels MAPPING Craige Mackenzie 15 EM mapping is showing us soil variability, identifying areas that have different production potential. Because of this we have the ability to reduce Nitrogen in areas that cannot perform as well. We can avoid areas such as gate ways, stock camp areas and streams with confidence using prescription maps. Our soils are more patchy than the old soil maps show us. Variable areas which we had already recognised but we ve now given them GPS coordinates and their actual size has been quantified. From here we can manage the identified zones with varied rates of inputs, as required. These maps also really helpful when making decisions on where to place moisture probes for irrigation management. The EM maps are a one-off map that we will be able to utilise for future needs such as variable rate irrigation. Craige Mackenzie 15

Reduce emissions intensity Extremes in efficiency Craige Mackenzie 16 Water will be the biggest issue that will face the world.

24 Irrigation Soil moisture probe location matched with soil type zones VRI Irrigation. Use of mapping technology to evaluate VRI suitability Help reduce nitrate leaching MAPPING Enable use of other tools to maximise production Reduce emissions intensity Extremes in efficiency Craige Mackenzie 16 Water will be the biggest issue that will face the world. Environmentally, politically and financially We will be installing VRI this year Nutrients banks increase and have a potential to pollute on dryland Reduce Nitrate leaching Reduce emissions intensity Craige Mackenzie 16

Science on the Farm Measure / Model / Mitigate Lysimeter - ECan Measuring leaching in a real situation Tower on farm to get accurate farm scale measurements

lysimeter to measure leaching as part of a long term research programme If you do not measure it, you can t model it and then you can t mitigate.

25 Science on the Farm Measure / Model / Mitigate Lysimeter - ECan Measuring leaching in a real situation Tower on farm to get accurate farm scale measurements Accurate figures needed for NZ regulatory schemes THE FUTURE Its all about being engaged Eddy Co-variance Tower -NIWA Craige Mackenzie 17 Have installed a lysimeter to measure leaching as part of a long term research programme If you do not measure it, you can t model it and then you can t mitigate. With NIWA have installed a eddy covariance tower, measuring N2O and CO2 We need to get accurate data for our farming systems not international default figures for a pending ETS. Craige Mackenzie 17

26 Science on the Farm THE FUTURE Craige Mackenzie 18 Irrigation is about filling holes in rain fall periods Drainage occurred from rainfall mainly Use of accurate weather forecasting is essential for efficient irrigation application Fertiliser application timing is scheduled using all this information to stop Nitrate leaching Craige Mackenzie 18

27 SMART-N Craige Mackenzie 19 This is a typical NZ dairy pasture...check out the huge variability Having managed variability on the cropping farm driving past the dairy pastures was very frustrating Had to be a better way of managing nutrients. We took existing crop sensing technology and gave it a Kiwi twist. Now able to put Nitrogen between urine and dung patches not on them. Craige Mackenzie 19

28 - How it works SMART-N Craige Mackenzie 20 How it works. Craige Mackenzie 20

29 Challenges Ensure the farm management has attention to detail with new technology. Ensure farming team are engaged in the concept. Increase farm profitability to allow improved investment in sustainability. Better extension across industry, with improved focus on delivery Increase precision agriculture capability across all sectors. As farmers, be actively involved in research associated with our industry. THE FUTURE As Regulators, be actively involved with farmers. Good sustainable farming practices and the most profitable Craige Mackenzie 21 farming practices go hand in hand. Craige Mackenzie 21

30 We are in an era with farming, where we have new efficiency measures that are the standard for robust profitable farming systems, but we still have to produce the goods if we want a future for the generations to come. Our businesses will evolve to meet today s and tomorrow s challenges. Farmers will continue adapting their farming systems as knowledge and skills increase, like they have for generations. More from less will remain a foundation principle of any business that has a future. Compliance with regional laws will be an outcome of good farming systems not the driver for change. Keith Riley 1

31 Keith Riley 2

32 Keith Riley 3

33 Farming within limits is nothing new, however as our population grows there will inevitably be more demand on our natural resources. Responsible resource management is another sensible criteria to ensure a future for our businesses. However I am not speaking from a position of great authority or from a position of having developed a model farm that meets all our industry goals. Rather, I will share some of the practices that helped us improve resource efficiency that has lead to improved profit and ease of management of our business. Resources used on farm Nutrient losses from our farming system. What we are trying achieve with the DairyLink farms Keith Riley 4

34 How it was for us Milking 700 cows producing 55L/cow of effluent each day. 270 days milking producing 38m3/day ~10,000m3/ annum. 4500m2 surface area, yard, roof and pond collecting 4500m3 of rain per annum. Total effluent to manage annually was around 15000m3.(90% water) Pumping 18m3/hour to irrigator took around 830hrs per annum. Electricity consumed by 15kw effluent pump $3124.(17% of total electricity costs) Recycled the green water. Reused primary cooler water for stock Diverted roof water into stock water storage. Still milking 700 cows now producing ~7L of new effluent day. Still collect the 4000m3 of rain water. Total effluent to manage per annum >6000m3 60% reduction Pumping 18m3 hour to irrigation took 330hrs per annum. Electricity consumed for irrigator $1240 plus $770 for storage and recycling. Total per annum $ % less electricity consumed pumping effluent saving $1100. Keith Riley 5

35 We estimated that we spend one hour of labour for every six hours of irrigating. Reducing the annual effluent irrigation hours from 830 to 330 saves around 83 hours work. That s two forty hour weeks each year someone doesn t spend managing the irrigator. Daily consumption of around 113m3 from ground water before changes reduced to around 47m3 after. Nearly 60% less fresh water taken from our well. In per cow terms from 160L to 60L per day. Our regional council uses 140L cow per day as the standard. From a catchment prospective could we move from our current fully or over allocated status to having less than 50% of our water allocated. Keith Riley 6

36 The 6000m3 capacity pond held 110 days before changes and 270 after. Have storage facility that keeps all material in suspense. Produces a product that is easy to manage for recycle and consistent for irrigating. Gives the option of applying effluent when soil and pasture conditions can make use of moisture and nutrient value. A catalyst to developing storage was the swath of dead worms that used to appear behind the effluent irrigator. Keith Riley 7

37 Keith Riley 8

38 Keith Riley 9

39 Thirty years of data shows that we have ample capacity to store our effluent until the time is right to irrigate. Keith Riley 10

Asset or Liability depends where they end up. On the farm = asset, in the waterway = liability. Test show that 2500t N in flows past our farm in the Manawatu river each year.

40 Asset or Liability depends where they end up. On the farm = asset, in the waterway = liability. Test show that 2500t N in flows past our farm in the Manawatu river each year. (only 30t or 1% of that from point source) In dollar terms that is $4.8m so it makes sense to capture as much of that on farm as possible. Nutrient budgets for the East Coast show us that our systems can vary from less than 10 and up to nearly 60kgs N/ha/per annum are leaking from our dairy farms. Data from 127 farms Keith Riley 11

41 Very hard to quantify but some of the things we have done over time to achieve current estimated N losses of 19 kg ha. Reduced cow numbers from 1000 to 700 Increased per cow production 360 to 380 Developed better off paddock cow management and feeding facilities Herd homes. Improved effluent application management. Reduced stock crossings of waterways. Maintained profit. This involves dairy farmers and industry and community leaders working together. Dairynz, Feds, Horizons Regional Council. Our aim is to improve productivity and reduce environmental impacts of farming by demonstrating ways to improve resource use efficiency and resource protection. Three farms have been selected within the Tararua catchment Exploring the values that identify where individual farm systems are compared to farm goals and industry standards. Keith Riley 12

42 One year into a three year project and have quantified a current position for the three farms by inputting data from each farm into various models. Next two years goal is to develop different strategies' on farm that ensure profitability and environmental responsibility go hand in hand. These farms are not focus farms or necessarily demonstration farms, rather a place for all to learn what needs to be done on farm to ensure our farms are environmentally responsible as well as profitable. We simplified our farming system by developing effluent and water storage and developed off paddock cow management facilities. This enabled us to lower the farms nutrient losses to the environment and reduce the amount of water, electricity and time consumed on farm whilst retaining our profit margin. Complying with regional council laws was no longer our driver for change. Keith Riley 13

The case for exploring smart N management on Australian dairy farms

The case for exploring smart N management on Australian dairy farms Ian Fillery 1 and Sam Taylor 2 1 Senior Principal Research Scientist, CSIRO, Perth Ian.Fillery@csiro.au 2 Regional Dairying for Tomorrow