Setting itself a self-imposed nitrogen loss target has cost the Lincoln University Dairy Farm (LUDF) almost $100,000 in potential lost profits this season.
Faced with the prospect of having higher nitrogen losses this season than past years, some tough management decisions were made in February to prevent this, South Island Dairying Development Centre executive director Ron Pellow told a LUDF field day.
"If we carried on as we were, we were probably going to end up with a 12 per cent higher nitrogen loss than last year.
"While nitrogen losses were reined in to below last season's levels, this has come at the cost of both production and profit, with production for the 2013-14 season now forecast to be 8 per cent below budget at 276,000 kilograms of milksolids compared with a budgeted 300,000kg.
This lost 24,000kg at a record dairy forecast payout of $8.65 equates to more than $200,000 of potential earnings.
"There would have been costs associated with this higher production, with $120,000 of silage required to generate that. But that is still $90,000 of missed opportunity. What we have done is considerably pulled back forecast nitrogen loss. We were heading for 12 per cent more nitrogen loss, but are now forecast to be about 7 per cent less than last year. So from a nitrogen loss point of view it has been very valuable. From a profitability point of view - not sure. It's a big cost to meet a nitrogen target."
The true cost would be known when this season's LUDF results were compared with Canterbury's top four privately-owned benchmark dairy farms.
"We have always been neck- and-neck with those other farms in terms of profitability." While the cooler season had impacted on pasture growth and quality, the biggest hit to production had come from management decisions to reduce nitrogen losses.
An extra challenge is that the farm is unable to use the nitrification inhibitor Eco-n, which is off the market after traces of an ingredient DCD were found in processed milk.
As LUDF has not built farm infrastructure such as a stand-off pad to reduce the time cows spent on the paddock, the available options to reduce nitrogen loss were limited to changes in feed supply or demand - such as use of nitrogen fertiliser, bought in supplements, culling cows and drying off dates."
As productivity (efficiency rather than turnover) is a key focus for LUDF, the decision was made to stop using bought supplementary feed and adjust the stocking rate down as required to match the available feed supply.
"As we normally feed 250kg to 300kg drymatter per cow of bought-in feed through autumn, this was going to create quite a change. It meant we would have to dry off cows to match the stocking rate to the amount of feed we could grow on the milking platform. We could see very quickly it would have an impact on production."
Three years ago LUDF set a target to farm within its previous environmental footprint.
This is in line with limits set by Environment Canterbury's proposed land and water plan, which requires farmers to not exceed their 2009-13 nitrogen loss baseline.
Nitrogen fertiliser was applied at 250kg/ha across the whole farm - 100kg/ha less than the previous year - used at a rate of 25kg/ha a time through to late April.
Gibberellic acid was also applied until it got too wet in autumn. DairyNZ productivity manager Steve Lee said LUDF would end this season with figures of about 1725kg/MS/ha and 438kg/ MS/cow. "We are confident that this season if we had kept farming the way we were we would have produced just over 1900kg/MS/ha and 480kg/MS/cow.
"So it is a big drop.
"We saw an impact quickly. We stopped feeding silage in early February and by the first week of March we were putting cows on once-a-day milking." All cows were milking once-a-day from April 18 and in the first week of May only 250 cows were still being milked compared with the more usual 500 to 550 cows.
- The Press