Energy Indicators of Agriculture Stability

1.1 KEY FINDINGS
1.2 PURPOSE
1.3 METHODOLOGY
- Table 1.1 Key Indicators for the 'National Average', Average Irrigated and Average Non-Irrigated Dairy Farm
1.4 INDICATORS
1.5 SIGNIFICANT FACTORS
1.6 SUSTAINABILITY
1.7 RECOMMENDATIONS

1. Executive Summary

1.1 KEY FINDINGS

The key findings to emerge from this study are as follows:

Values of the energy use indicators vary widely between individual farms, by as much as an order of magnitude. The main causes of variation are differences in:
- use of fertilisers and nitrogenous fertilisers in particular;
- use of electricity and in particular electricity used for irrigation pumping; and
- milk solids production per hectare.
Total primary energy input¹ to the 'national average' dairy farm is of the order of 18 GJ per effective milking hectare per annum (average energy intensity). This is double that observed 20 years ago, primarily due to increased use of nitrogenous fertilisers. Only 15 percent of these primary energy inputs are from renewable sources, mainly hydro and geothermal electricity.
Average energy intensities are similar in all regions except Canterbury where they are significantly higher due to the number of farms with pumped irrigation.
Average total primary energy inputs are around 22 MJ per kilogram of milk solids. This equates to an overall energy ratio (OER) of 0.59 (0.59 units of energy input for each unit of calorific energy output in the milk). This is only 10 percent higher than that recorded 20 years ago because average production per hectare has nearly doubled.
Average OERs are variable between regions due to variations in average milk production intensity, fertiliser use and irrigation.
The average overall energy ratio for New Zealand dairy production are lower than any reported overseas - 0.59 compared to an estimated 2.8 in the United States of America and a range of 0.67 to 2.4 in European countries. However individual farms, particularly those with pumped irrigation or high nitrogen application rates, may have higher OERs than those calculated for some conventional and organic dairy farms in Europe.
The gross carbon dioxide emissions from energy use on dairy farms are estimated to be 1.1 tonnes CO₂ per effective milking hectare or 1.4 kilograms CO₂ per kilogram of milk solids. This does not include animal emissions of greenhouse gases.
There are possibly some sustainability concerns for irrigated dairy farms in Canterbury with high levels of energy input, particularly associated with pumped irrigation. Not only are energy inputs and therefore production costs higher than normal but there may also be issues in the future related to access to water resources and the potential for ground water pollution.

1.2 PURPOSE

The aim of this study was to determine baseline data on total energy inputs, as indicators of the sustainability of the dairy production sector. Indicators based on energy consumption, together with other indicators for land, water use, social effects and financial performance, are perceived to be valuable:

as tools for farmers and policy advisers to assess the overall sustainability of agricultural activities;
to ensure the continued competitiveness of our food and fibre products;
to provide policy-makers and planners with measures with which to assess the best use of land in the future.

The results presented in this report are based on data collected from 150 dairy farms, approximately 1 percent of all national suppliers. The average indicators have been determined with 95 percent certainty to around ( 10 percent.

The key indicators emerging from the study are:

Milk solids production per effective milking hectare (production intensity)
Total primary energy requirement (direct, indirect and capital energy inputs) per effective milking hectare (energy intensity)
Overall energy ratio (ratio of total primary energy input to calorific energy output)
Proportion of renewable energy within the total primary energy requirement.
Total carbon dioxide emissions per effective milking hectare (gross emission intensity)

Other indicators can be derived from these.

1.3 METHODOLOGY

Data on farm production, direct farm energy use, indirect inputs such as fertilisers, chemicals, purchased feed, and capital inputs associated with buildings, machinery and other improvements were collected from 96 farms in conjunction with MAF Farm Monitoring in 1997/98. A further 54 farms were surveyed in 1998/99 to complete the target number and provide more information on larger irrigated properties.

The total primary energy use and carbon dioxide emissions associated with each input were calculated using energy coefficients and carbon dioxide emission factors derived from national and international data and in accordance with IPCC guidelines (IPCC, 1996).

The resulting indicators for each farm in the survey have been combined to produce a set of indicators for the typical 'national average' dairy farm and also for average size irrigated and non-irrigated properties. In addition indicators were determined for average size dairy farms in eight geographical regions.

The underlying variability of the resulting indicators was analysed in terms of the contributing factors that explain the bulk of the variation. This gives some insight into the effect of different management practices on the indicators and possibly the sustainability of individual enterprises.

A comparison has also been made between the average overall energy ratio (a key energy indicator) for New Zealand dairy production and a number of international competitors.

1.4 INDICATORS

Values for the five key indicators for the 'national average', average irrigated and average non-irrigated farms are given in Table 1.1. Indicators for the average non-irrigated dairy farm were not significantly different to the 'national average' dairy farm. All the key indicators were higher for the average irrigated dairy farm than the average 'non-irrigated' dairy farm, except production intensity.

Table 1.1 Key Indicators for the 'National Average', Average Irrigated and Average Non-Irrigated Dairy Farm

Indicator	National Average Dairy Farm	Average Non-Irrigated Dairy Farm	Average Irrigated Dairy Farm
Production Intensity (kgMS/ha)	835 ± 39†	790	917
Total Energy Intensity (GJ/ha)	18.2 ± 1.3	16.9	30.6‡
Overall Energy Ratio (MJ_in/MJ_out)	0.59 ± 0.04	0.57	0.89‡
Gross CO₂ Emission Intensity (t CO₂/ha)	1.1 ± 0.1	1.1	1.8‡
Renewable Energy (%)	15 ± 1	12	21‡

† 95 percent confidence interval for the mean
‡ significantly greater than the average non-irrigated dairy farm at the 5 percent level

1.5 SIGNIFICANT FACTORS

From the averages for all farms monitored, the most significant contributions to the total energy requirements of the 'national average' dairy farm were fertilisers (35 percent), electricity (25 percent) and fuel (20 percent) (Figure 1.1). Proportions on non-irrigated farms were not significantly different to these (Figure 1.2). On irrigated farms electricity was the most significant energy input (40 percent) due to the significantly greater requirement for pumping water onto spray irrigated properties (Figure 1.3).

Electricity use in general, and for spray irrigation in particular, emerged as the most significant cause of variability in the calculated energy indicators between different dairy farms. Nitrogen application rate, and fertiliser use in general, also had a significant effect.

The production intensity (kgMS/ha) was primarily determined by the stocking density and was only weakly correlated to the level of inputs such as fertilisers.

Figure 1.1 Proportion of Energy Inputs on the 'National Average' Dairy Farm

Figure 1.2 Proportion of Energy Inputs on the Average Non-Irrigated Dairy Farm

Figure 1.3 Proportion of Energy Inputs on the Average Irrigated Dairy Farm

1.6 SUSTAINABILITY

The primary issue of sustainability to emerge from this study relates to the use of irrigation and spray irrigation in particular. On average, irrigated dairy farms have significantly higher energy requirements than non-irrigated properties. This is particularly true of spray irrigated farms in Canterbury where electricity for pumping is usually the greatest energy input. Gravity and low-pressure irrigation systems are less likely to have high overall energy ratios. Competition for water resources and ground water pollution may emerge as issues related to irrigation in the future.

Use of renewable energy in the dairy production sector is relatively low (15 percent). This is true even on spray-irrigated farms, due in part to the high proportion of fossil fuel energy currently used in the New Zealand electricity generation mix².

1.7 RECOMMENDATIONS

As a result of this study the following recommendations are made:

Monitoring of energy indicators should continue in the dairy production sector to build up a picture of trends over time. This could be accomplished as part of the usual farm-monitoring round. Much of the necessary information on the direct and indirect inputs, as defined in this study, is already collected for the farm monitor models, although sometimes in financial terms. It would not be difficult to convert these into energy terms, although some loss of accuracy may occur in the process. Since most of the farms used in this study were monitor farms the necessary information on capital energy inputs had already been collected. This would not have to be repeated every year except when major capital purchases were made or new farms were introduced to the database.
Reporting of energy indicators, in conjunction with the usual production indicators, could provide a useful guide as to the direction of the industry towards what is hopefully an increasingly sustainable path. This could be carried out in conjunction with farm monitor reports or the publication of other sustainability indicators by government. In particular, the overall energy ratio (or similar) provides an indicator of the average effectiveness of energy conversion being achieved by the industry. When combined with indicators for the dairy-processing sector an indication of the environmental competitiveness of the New Zealand dairy industry as a whole, will result.
The determination of energy indicators could, with some effort, be carried out in other agricultural production sectors. Energy and carbon dioxide emission factors have already been determined in this study for most of the important agricultural inputs. Energy coefficients would need to be determined for other types of output, however this is not a difficult task. Once again data collection from representative properties could be carried out as part of regular farm monitoring, when much of the necessary information is already obtained. Probably the most arduous task, not normally associated with present farm monitoring, is establishing the capital inputs to each farm.
Given the findings of this study the most significant areas for improving overall energy efficiency on New Zealand dairy farms are:
- fertiliser management, particularly in relation to the use of urea, to reduce indirect energy requirements for fertiliser manufacture;
- water management on irrigated dairy properties, particularly those with high pressure spray irrigation, to reduce direct use of electricity;
- tractor and vehicle selection and operation to reduce direct use of diesel and petrol;
- insulation of hot water cylinders and milk vats and use of heat exchangers to reduce direct use of electricity in dairy sheds.

¹ "Total primary energy input" implies that all forms of energy, measured at the source (i.e. at oil & gas wells, power stations, etc), required for farm operation are included. For example, direct energy (fuel & electricity), indirect energy (for the production of consumables such as fertiliser & supplementary feeds), and capital energy (for the manufacture of vehicles & buildings). The exception is "free" solar energy for pasture and crop growth, which is excluded. Therefore total primary energy includes energy losses during conversion processes such as oil refining and electricity generation.
²During the period of the survey the proportion of electricity generated from renewable sources (consumer energy) was about 72 percent. However only 57 percent of the total primary energy input to the generation system was renewable (derived from EECA, 2000).