Myth: We’ll lose money if farmers have to lower their environmental pollution.

Reality: In many cases, reducing environmental harm increases farm profit and it saves us all money in the long run.

Reducing stocking rates and the amount of external inputs used on a farm can reduce environmental contaminants coming from a farm.

However, calls for de-intensification, particularly in non-traditional dairy farming regions such as Canterbury and the McKenzie country, have resulted in responses such as ‘lowering environmental pollutants means fewer cows on the land’, which implies lower revenue (due to reduced milk production) [1].

Restrictions on some contaminants are thought to render some farms uneconomic. However, it is clear that intensification and expansion of dairy farming cannot continue without further degradation of most of our waterways [2].

There are already excellent examples on farms where the farmer’s profits have increased while their pollution has reduced.  Farms have simply worked out the point at which greater production does not increase profit but instead increases the damage to our waterways.

This relationship is shown simply in Figure 1 below. This data is from a real farm currently milking 620 cows.  This shows that reducing cows (the blue line moving from the right to the left in the graph) increases profit. It’s not until cow numbers are reduced to 390 that profit drops below where it was at the 620-cow level.

Crucially, nitrogen (N) loss per hectare (nitrogen leached per Ha) shown by the green line, reduces by more than half (from around 23 kg N per ha to 9) while making the same returns. Even at cow numbers of 450, nitrogen loss reduces to around 12 kg N per ha and profits are higher than when milking 620 cows.

Fig 1

Figure 1: Modelled changes in profit and nitrogen leaching (from Overseer) with a reduction in intensity from the current level on a real farm of 620 cows (Numbers from Tom Phillips, Massey University).

This modelling highlights “that the farm system needs to de-intensify, reduce its stocking rate, remove or reduce imported supplements and remove or reduce nitrogen fertiliser, thus increasing the profitability of the farm system and reducing the environmental impact” [3]. This is only one example from one farm, but other farm modelling, based on real farms, shows similar results.

The following diagram, depicting a typical dairy business, shows that as inputs increase (representing intensification), environmental effects and costs increase exponentially. However, profit and productivity start to decrease alongside this, as the ‘sweet zone’ is passed. The ‘sweet zone’ represents the ideal business-operating zone.

Sweet Zone business indicators

Figure 2: The Sweet Zone Business Indicators

It is clear the environment cannot cope with the status quo of increased production. We cannot use mitigation technology in order to increase productivity. Instead, we must change the way we are doing things.


[1] Fraser, P; Ridler, B and Anderson, WJ (2014). The intensification of the NZ dairy industry – Ferrari cows being run on two-stroke fuel on a road to nowhere? Paper presented at the NZARES Conference, August 2014, Nelson, New Zealand.  Retrieved from here.

[2] Parliamentary Commissioner for the Environment (2013). Water quality in New Zealand: Land use and nutrient pollution. Click here for the report.

[3] Sulzberger, T; Phillips, T; Shadbolt, N; Ridler, B and McCallum, R (2015). A whole farm modelling approach to evaluate the economic viability of a dairy farm in a sensitive catchment. In Moving farm systems to improved attenuation. (Eds L.D. Currie and L.L. Burkitt). Occasional Report No. 28. Fertilizer and Lime Research Centre, Massey University, Palmerston North, New Zealand. Click here for list of papers

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