The economic impacts of declining pasture harvest on Northland and Waikato dairy farms

Abstract

Estimated pasture and crop harvest in Northland and Waikato is decreasing at approximately 0.5 and 1.0 t DM/ha/decade, respectively. However, milk production has been stable over time due to increased supplement use and farm system changes. Declining pasture harvest trends driven by climate change are predicted to continue. Understanding the impact of this decline on the economic performance of the pastoral sector in the future and to what extent farmer adaptation may mitigate the impact is essential. Farm-level data of estimated pasture harvest losses is combined with the Dairy Sector Pathways (DSP) model to estimate the impact of either: a) continued decline in pasture harvest offset by increased supplement use (BAU) or: b) integrating more climate-resilient pasture species and practices into the farm (FA), on dairy farm profit in Northland and Waikato/Bay of Plenty. Net present value (NPV) of dairy operating profit associated with FA increased by $1.3b over BAU across Northland, Waikato and Bay of Plenty regions by 2050. Developing forages resilient to climate change will apply to Northland immediately, and to regions further south as temperatures increase. Therefore, developing and incorporating resilient forages into adapted farm systems is critical to the future of pastoral farming in New Zealand.