Emissions: Dairy Intensification needed to combat ETS
June 21st, 2010
Fedfarmers claims MAF’s own cost figures for the Emissions Trading Scheme (ETS), indicate the national dairy herd will need to expand by 88,000 cows just to offset the $44.46m or $3,900 per farm in ETS costs from 1 July. FedFarmers president Don Nicolson says “dairy farmers will need to increase intensification on-farm just in order to stand still under the ETS.”
He says the herd would have to increase by a much greater number if the payout fell to its opening forecast for the season to combat the cost of the ETS. This is because given production costs for the bottom 10% of dairy farmers have broken the $6 per kg of milk solids barrier and even the best performers need to make $4.26kg/MS just to break even. “Translated into livestock, a $4.55 kg/MS payout under the ETS would need the national dairy herd to expand by some 590,000 dairy cows. That’s just to allow dairy farmers to breakeven on the ETS at a low payout figure.” Nicolson says the financial impact of the ETS demonstrates the potential devastating economic effect of a blunt emissions trading policy. He notes many other countries are abandoning such schemes.
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