NZ is known for its dairy products and is home to one of the largest dairy companies in the world. In this special research we investigate how the milk price is determined and we explore the industry behind our liquid assets.
Forget the $ 16.6 billion a year that earn dairy products; environmentalists say that the costs for natural systems are not properly taken into account when the amounts are made.
In fact, three years ago, the university ecologist Dr. Mike Joy of the university wrote a study stating that the costs of repairing the damage caused by dairy farming may amount to $ 15b.
The impact of Dairying is mainly: the amount of water used to make milk; the effluent that contaminates the soil, aquifers and waterways; the way soil is compressed by heavy animals; and the greenhouse gases that livestock emanates.
In addition, dairy processors are important energy users and greenhouse gas emitters. Fonterra burns about 410,000 tons of coal to turn liquid milk into powder.
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On the basis of one tonne of coal producing 2.86 tonnes of carbon dioxide, Fonterra's plants pump out 1.17 million tonnes of climate heat gas, making it one of the largest greenhouse gas emitters in New Zealand.
The dairy industry combats the attacks by recognizing that rapid growth has put the country, water and air under pressure, but tries to address this issue through a series of initiatives.
In the meantime, however, there is a time difference between now and when some of these restriction attempts come into effect.
The International Water Footprint Network lobby group estimates that 1000 liters of water are needed to produce 1 liter of milk, although this number has been disputed.
What is not in doubt is that dairy is a large-scale water user – in fact, it is the largest consumer of irrigation, accounting for about 44 percent of all consumption. Most is assigned in Canterbury, followed by Otago.
The answer to how much water is used to make a liter of milk is not easy: it depends on a climate, the soil, how the land is irrigated, the type of pasture and cow.
In regions such as Waikato and Taranaki, most milk is produced by rain, but not in Canterbury.
TETSURO MITOMO / STUFF
AgResearch has made the amounts. His results? In Waikato about 945 liters of water is needed to produce 1 liter of milk; in Canterbury, 1084 liters.
So actually these figures are remarkably close to the estimate of Water Footprint Network.
What goes into it must come out – a cow produces the equivalent waste of 14 people. That is why the approximately 10 million cattle in New Zealand create as much waste as 140 million people.
Some cow effluents are caught in the soil, but not all, and the rest ends up in aquifers, rivers and lakes. The problem is worse if the bottom is porous, as in Canterbury.
The Ministry of the Environment reported last year that between 1994 and 2013 phosphorus contamination decreased at the locations that were monitored, but that the nitrate deteriorated at more locations (55 percent) than that it improved (28 percent). Nitrogen leaching from agricultural soils is estimated to have increased by 29 percent between 1990 and 2012.
Joy calculates the potential costs of removing nitrates from drinking water for $ 10.7b.
"We say that this is the cost of cleansing water to standard, but that is conservative because people are much more tolerant than other life forms, but at some levels of nitrates below what people can tolerate, many freshwater fauna is dead," he said.
Federal farmers Vice-President Andrew Hoggard has challenged the figures, saying that it is assumed that all nitrogen comes from dairy in water, there is no dilution by rainfall and all the water is used to drink.
He added that if nitrate levels were reduced to zero instead of the drinking standard, it would cost $ 10b to clean up, "but this is not our reality".
Former environmental commissioner Jan Wright warned farmers two years ago they had to take more responsibility for greenhouse gases.
GEORGE HEARD / STUFF
Approximately 43 percent of the greenhouse gases in New Zealand are caused by methane and 11 percent by nitrogen oxide, the first being generated by all the bulking of the animals, the latter mainly by cows that urinate.
A single dairy cow generates about 3 tons of carbon dioxide equivalent every year in the form of methane.
The government has established a climate change committee, including Wright, to investigate whether farming should be included in the emissions trading scheme.
Scientists and companies look at technological solutions: within two years, New Zealand could be the first country in the world to change the diet of a cow, so that it releases less methane.
Other programs include a vaccine that inhibits methane by 20 percent, but success has been removed for at least a decade; and raising livestock and sheep with low emissions.
Establishment of soil
Cows are not light. The average weight of one of the common varieties, the holstein-friesiër, is more than half a ton.
The average number of dairy cows in New Zealand herds is 414, which amounts to several hundred tons of cattle that press and intensify on the ground during wet weather.
Soil compaction has been identified as the main issue of soil quality in Waikato. Joy and his co-authors have spent $ 611 million to address the problem.
DAVID UNWIN / STUFF
Faced with the problem
Farmers and farmers' leaders are in the background, but say they are starting to tackle the problem, instead of avoiding the "dirty milk waste" load that was imposed on them by Fish and Game in the early 2000s.
Pre-election last year they promised to make all rivers in New Zealand swamp, although they did not say how or by which time.
Confessing that not all rivers were in the state they wanted them to be, and that agriculture had not always done well, the group said the vow was "just the right thing to do".
A spokesman for the dairy company NZ said that farmers are much more efficient in their use of effluent than 20 years ago and 26,197 kilometers of rivers had been deposited and planted around waterways.
He said that pastoral agriculture was often better for the soil than for processing it.
"They are generally higher in organic matter, in good physical condition, have good nutritional status and the soil is less depleted than elsewhere in the world, because farmers add nutrients via fertilizers."
But there is change under the new government.
Later this year, Environment Minister David Parker will establish nutrient limits for river basins through a national declaration on water policy. Regional councils then determine the level of nutrients that individual farmers can discharge.