Embed climate action in the dairy industry

Markets (and consumers) are demanding more action from industries in addressing global warming, along with broader environmental issues, such as biodiversity.

GHG emissions represent an inefficiency in dairy systems, whereby energy and nitrogen that could be directed towards production are being lost. Trade-offs are inevitable when practice change is being adopted. Consequently any climate action needs to be embedded across the system/ environment in which dairy businesses' operate.

Global warming will also impact on the natural resources that dairy farming relies on. For example, reduced water in storages, increased water quality issues and water availability are all impacted by reduced rainfall.

This is why Dairy Australia's third Climate Commitment is to Embed climate action with the way we look after the environment.

Australian dairy farmers have always made improvements in how they manage soil, water, fertiliser and biodiversity. More farmers now soil test and use nutrient management plans. They have also fenced off more waterways to protect them from stock and revegetated areas to increase farm biodiversity. These changes have been facilitated by partnerships between farmers, Dairy Australia, milk processors and Regional NRM bodies.

There is increasing consumer, financial and market pressure for linking natural resource management with climate risk.

This work program aims to enhance access to markets and capital for Australian dairy farmers through increased uptake of Australian dairy industry environmental tools and programs that meet the needs of key stakeholders. This requires consideration of the impact of climate change on natural resources over time.

Dairy Australia active projects – Embed

Sustainable Dairy Products - meeting market and investor needs for evidence based metrics (results by June 2022)
Dairy High 2 - optimising nitrogen use in dairy (3 year research project)
Review of voluntary code of practice for Dairy Shed effluent in WA (2021)
Subtropical dairy resilient farms project (in-kind project)

For more on Dairy Australia's current investments in this area see the Climate Change Strategy - Investment Summary (2021).

Further resources

Dairy Self-Assessment Tool
The Dairy Self-Assessment Tool (DairySAT) is an environmental self-assessment and action planning tool for Australian dairy farmers.

DairySAT enables farmers and the broader dairy industry to:

Understand the environmental issues facing dairy farming

Benchmark on-farm environmental management practices with industry best practice

Identify the most critical environmental management practices on their farm

Develop action plans to address the identified practices

Access further information to understand environmental issues and improve practices on farm

DairySAT is currently being upgraded and will be available online soon (early 2022). For a hard copy please contact us here.
More Profit from Nitrogen

The More Profit from Nitrogen (MPfN) project objective is to enhance the nitrogen use efficiency of intensive cropping and pasture systems is a four year partnership between Australia’s four major intensive users of nitrogenous fertilisers: cotton, dairy, sugar and horticulture. For each of these industries, nitrogen (N) is a significant input cost to farmers and a substantial contributor to environmental footprints. Collectively, the Program aims to bring about increased farm profitability and reduced environmental impact by increasing nitrogen use efficiency (NUE), resulting in a reduction of the amount of N required in producing each unit of product.

This program updated the best management practices for optimising nitrogen use for pastures while avoiding environmental losses, as well as producing economic case studies.

For more information, please download the Best Management Practices for nitrogen (N) fertiliser use on dairy pastures factsheet.
Carbon and Biodiversity Markets
Farmers are land stewards but are rarely recognised for the work that they undertake in managing their land or in reducing their carbon emissions. Carbon and Biodiversity markets have been developed across the world as a mechanism to incentivise emissions reduction or carbon sequestration across industry, including agriculture, giving farmers an opportunity to realise the value of their environmental stewardship. Farmers are also increasingly needing to reduce on-farm emissions to meet industry and supply chain emissions reduction targets, community and finance market expectations.

In Australia, the Federal Government’s Emissions Reduction Fund is the mechanism for developing carbon markets, and the Fund includes several 'Methods' which allow farmers to either reduce or sequester carbon emissions, and to be paid for doing so. Recently developed Methods of relevance to dairy include animal effluent management methods and soil carbon method. In addition, the Federal Government is also piloting a range of programs through the Agriculture Biodiversity Stewardship Package, which are aimed at developing markets for biodiversity credits.

In April 2022, Dairy Australia hosted a webinar specifically for dairy farmers on Identifying On-Farm Opportunities: Carbon and Biodiversity which investigated these opportunities further. This webinar featured the following speakers, as well as a Q&A session:

Australian Farm Institute

Dairy Australia

National Farmers Federation

Australian Dairy Farmers

Australian Dairy Products Federation

The following is a recording of the full webinar.

Key points from the webinar include:

Understand your baseline, whether it be soil carbon or your farm's total emissions, so you can measure your improvement.

Ensure that you undertake thorough due diligence in terms of the requirements, costs and risks of participating in an ERF Method project.

Consider whether you want to sell any credits you generate to earn income, or save them to offset your own on-farm emissions in line with your personal emissions targets. You cannot do both.

Communicate with your processor to ensure you understand their plans for reducing supply chain emissions as this may impact on your plans for any credits you generate on farm.

There's no need to rush into a project - the opportunities under the ERF and other programs are relatively new and will mature over time, and demand for credits is also expected to increase over time.

Dairy Australia will continue to provide updates in this space as projects progress and markets mature.

The following resources may also be of assistance:

The Australian Farm Institute has released the Carbon Opportunity Decision Support Tool to assist Australian land managers in better understanding carbon farming opportunities and to identify which might be best suited for their enterprise. This online tool provides options for generating carbon credits and monetising environmental works, including the Emissions Reduction Fund and grants.

AgriFutures' informative A farmer's handbook to on-farm carbon management, which includes foundational information about how carbon markets operate, things to consider for projects on your farm, and options manage your own project or to engage with external service providers or cooperatives.

Further information about the Clean Energy Regulator Emissions Reduction Fund

Further information about the Agricultural Biodiversity Stewardship Package (Federal Government)

Information about Carbon Markets from the Clean Energy Regulator

Upcoming and recorded webinars from the Carbon Market Institute.

For any questions please contact Megan Hill, Policy Lead NRM, on 0439 810 984 or megan.hill@dairyaustralia.com.au.