Waikato dairy farmer Pete Morgan has already cut his cow numbers by 5% this year and wants to start stress-testing his business to see if it could handle further reduced numbers.
By reducing numbers now he could figure out what changes his business would need to remain profitable in future, Morgan said.
It’s a pattern that is being seen around the country – Rabobank noted in its latest rural confidence survey that farmers planned to reduce their stock numbers as regulations controlling farm greenhouse gas emissions loomed.
Rabobank New Zealand chief executive Todd Charteris said concerns over Government policies were now flowing through to the decisions farmers made about their stock levels.
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The bank found almost a quarter of farmers it surveyed were planning to reduce stock numbers in future. Only 6% wanted to increase numbers.
Morgan said he was already using very little nitrogen, so the need to reduce fertiliser under He Waka Eke Noa was not his main concern.
He also wanted to see if his business could handle a much lower milk payout, in case milk quality and quantity was affected by the availability of feed if climate schemes affected how farmers grew grass.
Morgan was concerned that if Kiwi farmers produced less milk because they reduced stock numbers, then there would be less milk exported. The milk deficit could then be met with milk from countries that had less environmentally efficient farmers. This would have an overall worse result for the climate.
He was planning to reduce his herd by another 15% next year.
Morgan was also reducing the number of calves raised outside the farm, as he could then control input costs used to grow them, like fertiliser used to grow grass. This became important under climate schemes as he would need to have more control of his farm’s emissions than previously necessary.
By doing everything on-farm he would also be fully using the employees he had, Morgan said.
Southland sheep breeder Leon Black said because of a drought in Southland earlier this year he had already cut back his herd numbers by 8%.
Black did not have cattle, which produced more methane than sheep, and also did not use nitrogen fertiliser to plant winter crops. This meant he would not be impacted by regulations as much as farmers who did.
He had run his farm’s production numbers through software a number of times, and saw that a 10% reduction in methane, from either reducing stock or breeding animals with less methane output, would mean he was still making a profit while meeting his climate targets, Black said.
He was concerned that many farmers were finding it more profitable to plant their farms to carbon forests, than dealing with carbon footprint regulations.
This would mean large communities that supported farming would disappear and the reduction in meat exports would be filled by meat from countries that were not as efficient as New Zealand, leading to more greenhouse gases released in other parts of the world, he said.
The Rabobank survey said farmer confidence was higher than last quarter but was still negative overall.
Rising farm input costs continued to be the main source of concern, and was said to be a key reason for pessimism by more than two-thirds of farmers who had a negative outlook on the 12 months ahead.
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