Saving it up
By Maggie Monast
By Maggie Monast
The dairy industry is a critical part of the landscape, economy and social fabric of the country. But it’s under stress.
Dairy is in the fourth year of an economic downturn in which many farmers have struggled to break even. Dairy farmers across the U.S. are highly motivated to increase their resilience to unfavorable economic and environmental conditions, including highly variable milk and feed prices, unpredictable farm policies and extreme weather – most notably increased heavy rain events and flooding.
Most of these factors are out of farmers’ control, but conservation is something farmers can be sure of. My colleagues and I concluded this after digging into the budgets of four Pennsylvania dairy farmers in our new report: How conservation makes dairy farms more resilient, especially in a lean agricultural economy. The report shows how conservation practices, including manure storage, nutrient management, cover crops, conservation tillage and stream fencing, generate a variety of financial benefits, including reduced labor hours, savings on external feed and bedding, and lower vet bills due to improved herd health.
Specifically, our analysis found that manure storage options have high capital costs and almost always require supplemental grants or other sources of funding. However, the farmers that were able to improve manure management realized significant benefits beyond water quality improvements.
Additional benefits to manure storage included improved nutrient management, which was associated with increased yield; there was also a host of benefits from manure separators, which allowed farmers to use manure for bedding instead of wood shavings, resulting in significant savings on bedding costs, vet costs and reduced cow mortality.
One farmer, identified anonymously in the report as Farmer A, said, “Implementing better conservation strategies, especially manure management, has changed our farm for the better. Our manure separator has hugely impacted our herd health and reduced our costs, in addition to the other positive changes we’ve made over the past decade.”
While reduced bedding costs were expected from the switch in manure management, an unexpected benefit was the improvement in cow health. From the switch in bedding, participating farmers saw their herds experience reductions in mastitis, leg infections and mortality, and an increase in somatic cell count – a measure of milk quality.
Another farmer from the study, Farmer D, invested in manure storage that holds six months’ worth of liquid manure in the summer and three months’ worth in the winter, helping him get more value out of his manure through better utilization and improved crop yields. He said, “We’ve been doing conservation here for decades, but taking the plunge to install our digester took us to the next level. We have no regrets from installing technologies that provide these environmental and economic benefits to our farm.”
Too often, these economic benefits are not recognized or quantified because farmers’ record-keeping tools aren’t set up to easily connect agronomic and financial sides of the business. Farmers, their advisers and other stakeholders often take too narrow a view of the costs and benefits of conservation – looking at a single practice for a single year – which means they miss a large part of the picture. Presented this way, much of the economic value is hidden.
The real value becomes apparent when farmers see the economics of conservation within the context of their entire operation and tallied over multiple years. By looking at conservation in the context of overall farm budgets, farmers can see the impacts on yield, herd health, input costs, labor costs and more, and understand how combinations of practices have a larger positive impact than expected based on the individual instance. Finally, our analysis found that investments in conservation have increasing returns. Specifically, farmers who have access to additional financial assistance for conservation through cost-share programs and grants are typically able to make larger investments in practices like manure storage that achieve even greater economic and environmental benefits.
Increasing financial support for farmers through government programs, tax incentives and other innovative financing strategies is an important next step to making the dairy industry more resilient in the face of economic and environmental pressures.
It’s my hope that this report will help dairy farmers and other producers sustain their way of life for generations to come. •
Maggie Monast is the Senior Manager of Economic Incentives for Agricultural Sustainability at the Environmental Defense Fund. Learn more about this report and EDF’s other farm finance analyses at edf.org/farm-finance.