Can New Zealand cope with the staggering environmental consequences of the dairy boom?

Dairy farming is big business in Aotearoa New Zealand these days. Given the payout of NZ$6.90 per kg made by Fonterra this year, and the average dairy cow producing 330kg of “milk solids”, each dairy cow earns NZ$2277. The commonest herd size, around 225 cows, earned NZ$512,000 this year. One of the larger herds of more than 1000 cows, of which there are around 270 in New Zealand at present, earned more than NZ$2.2 million (Livestock Improvement Corporation data, here).

This huge return on milk production explains why the New Zealand dairy herd has grown rapidly over recent years to number 5.28 million cows – an increase of 22% in just eight years. Over the medium term, this increase in the national dairy herd signals a significant reorientation of New Zealand’s pastoral sector; in 20 years the dairy herd has increased by 65%, while the number of sheep has fallen by 40% (MAF data, here). This expansion has been so rapid that it has recently led to the ‘Go Dairy’ tv recruitment campaign.

The intensity of dairy production has also increased, with average herd numbers increasing from 149 to 337 in the past 20 years, and the average number of cows per hectare increasing from 2.4 to 2.81 over the same period (LIC data, here)

The contribution of dairy farming to New Zealand’s economy is now very significant: dairy products account for 21% of New Zealand’s total export trade by value, at NZ$7.79 billion for the year to January 2008 (Statistics NZ data, here). Indeed, it is significant in global terms, as the Fonterra Co-operative Group, by far the largest dairy company in New Zealand, is responsible for more than one-third of international trade in dairy products.

The environmental impact of dairy farming is also very significant. There are a number of important issues, including the intense pressure for irrigation projects in areas such as Canterbury which have previously been unable to sustain dairy farming owing to the dry climate. Here, however, I want to look briefly at some of the pollution issues.

In terms of waste output, each cow generates as much waste as 14 people (Jay & Morad, 2007), and thus the waste output of the national dairy herd is equivalent to that of a staggering 73 million humans. (For readers from beyond these shores, New Zealand’s human population is currently around 4.23 million people. Consequently, the burden of dealing with the natural waste of 73 million people is very hard for New Zealanders to imagine.)

In addition, the national dairy herd produces 1744kg of methane per day from ‘enteric fermentation’ (the polite scientific term for farts and burps). Methane emission from farm animals contributes 31.8% of New Zealand’s total greenhouse gas emissions (CO2 equivalent), and the dairy herd alone contributes 10% of greenhouse gas emissions (MfE data, here).

Given the scale of the pollution problem associated with dairy farming, the rapid increase in the size of the dairy herd in New Zealand and the increasing intensity of production give particular cause for concern. The potential for damage to groundwater and waterways from effluent pollution is enormous, and well recognised. There are plenty of farm management practices intended, in principle, to minimise this impact, such as anaerobic/aerobic pond treatment systems; spray irrigation disposal onto land; the Clean Streams Accord to promote fencing of waterways to prevent cattle accessing and polluting them directly; and riparian planting projects. Nevertheless, there are plenty of examples of bad practice too, which in the past few years have led to our familiarity with the expression ‘dirty dairying’ (some images here).

Methane pollution appears to be a much more intractable problem. The FAO suggests improved nutrition and production efficiency can help by reducing numbers of cattle needed for a given level of milk production, but it is hard to imagine that there are major gains to be made in terms of nutrition and efficiency improvements by New Zealand farmers, who generally run highly efficient operations already. Furthermore, given the intensification of stocking already noted, it seems that New Zeland dairy farmers are more interested in maximising returns than in minimising methane pollution.

In addition to the points noted above, Mairi Jay and Munir Morad (2007) have also identified some important structural factors which restrict the industry’s capacity to deal with the pollution generated by the dairy herd. Firstly, while the corporate arm of Fonterra can control events in its dairy factories, it is much harder for it to push its 11,000 suppliers to follow strict environmental standards. This largely stems from the fact that it is a co-operative and therefore the suppliers are also the owners of the business. As Jay and Morad note, “the company cannot risk alienating too many owner-shareholders by imposing draconian measures” (p.475).

Secondly, the dairy industry deals in commodity products such as butter, milk powder and casein. Since New Zealand products “have little to distinguish them in market terms … New Zealand’s dairy sector may have little choice but to … continue to minimize the cost of production.” That is to say, the ability to compete in world markets on price alone often comes down to “minimizing the environmental component of cost” (p.475).

Thirdly, the fragmented nature of environmental regulation in New Zealand, which operates through 14 regional councils, means that there is wide variation in the approach to stock effluent control around the country (p.475).

The continuing decline in ground and surface water quality across New Zealand suggests that the agricultural sector is having great difficulty in ameliorating the environmental effects of more intensive production methods. As far as the dairy industry goes, Jay and Morad conclude that there are “major practical and political problems in internalising all the environmental effects of dairying and offsetting the consequences of intensification. … A major problem for New Zealand society nowadays is how to weigh the economic benefits (and lifestyle implications) of increased dairy production against the environmental costs of reduced water quality and loss of native biodiversity” (pp.476-7).

When the economic benefits weigh in at NZ$7.79 billion of export revenue in one year, and the rate of dairy conversions in New Zealand resembles something of a gold rush, one might wonder how anyone can stop the juggernaut. But, it seems to me, if the economic benefits are so great, surely just a little of the cream can be scooped off for the benefit of ecological restoration and recovery. This situation therefore presents quite a test for the standard model of sustainability in New Zealand, which suggests economic growth and environmental sustainability are mutually supportive and synergistic.

The test is this: Are the owner-shareholders of Fonterra willing to internalise the full environmental cost of their enormous success? Or will they take the money and run?


Mairi Jay and Munir Morad (2007) Crying over spilt milk: A critical assessment of the ecological modernization of New Zealand’s dairy industry. Society and Natural Resources, 20, 469-478.


March 26, 2008: In the first version of this article that I posted, I referred to some figures for the amount of dung and urine generated by dairy cattle per day. I now believe these figures to be incorrect so I have deleted this information from the present version of this article.

April 25, 2008: I’ve posted an update on this article here.


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