Climate to impact profit

By Country News on October 20, 2016
  • Climate to impact profit

    Gillian Hayman says climate adaption is localised and would mean different management decisions for different businesses.

Flexible management practices key to coping with shifting climate.

Current 2040 climate projections will see the profitability of dairy farms decline unless farmers change their practices, research has found.

The three-year Dairy Business for Future Climates research project, led by Dairy Australia, concluded that farmers needed to improve management skills and adapt farm systems to manage future climate risk.

Lower pasture production and utilisation, increased purchased supplementary feed, greater reliance on cutting silage/hay rather than direct grazing pasture and lower milk production per cow would all contribute to lower profits in the face of climate variability.

Using three Australian farms in different regions under three different management systems — intensified, simplified and adapt — researchers forecast that all farms were likely to see reduced profits.

South Gippsland dairy farmer, Gillian Hayman, managed the project on behalf of Dairy Australia.

Ms Hayman said of the three systems tested, no single option in any region could be considered superior to the others and management was the key to ensuring business profitability.

“We really wanted to explore whether there was one pathway more resilient than others,” Ms Hayman said.

“We explored real data in those regions … modelled that against a future climate and found that all were impacted.

“No one (option) is a clear winner to be climate-proof,” Ms Hayman said.

In recent decades, the Australian dairy industry has been on an intensification pathway using higher levels of inputs to produce more milk, however this pathway has been questioned in light of projections for warmer and more variable future climates.

The research noted some general trends with the most significant being that milk price was the largest single source of variation in profit across regions.

“Milk price variability has the greatest impact, but year-to-year climate variability has an increased impact.”

The findings, although undesirable, were not surprising.

“It’s been fairly well-documented that hot weather will increase and there’ll be more rainfall variability.”

Ms Hayman said many farmers had already been working towards more adaptable farm systems to manage these changes and she encouraged all farmers to ensure their business was resilient.

Farmer working groups involved in helping steer the project said they were generally confident about adapting to incremental climate change based on past experiences of managing variable seasons.

“We talked to a lot of farmers throughout the project and most said they had variability in the past 20 years and were used to it.”

Farmers had adapted in many ways Ms Hayman said, such as through increasing the amount of shelter for stock, increasing on-farm water storage, recycling water, growing summer crops during feed gaps when perennial pastures do not exist, upgrading irrigation systems, changing calving patterns to optimise winter grass growth and watching global commodity markets.

Farmer working groups involved in helping steer the project said they were generally confident about adapting to incremental climate change based on their past experiences of managing variable seasons.

To find out more about the research, visit www.dairyclimatetoolkit.com.au/reports

By Country News on October 20, 2016

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