Watering Fonterra's Interests

A little while ago I quoted from an excellent NZ Herald conference report of a presentation given by Fonterra about its reliance on water in New Zealand.

I took exception to what Fonterra had to say about water in New Zealand. In their presentation they said: "Our rainfall averages two metres a year, more than double the 0.8m world average....."

While that statement might be true, it is also true that an area where dairy farming is causing significant concern is South Canterbury, North Otago, and Central Otago - which is an extraordinarily dry part of our country. Here's what NZ's Met Service has to say:

The mean annual rainfall (for New Zealand) ranges from as little as 300mm in a small area of Central Otago to over 8000mm in the Southern Alps. The average for the whole country is high, but for the greater part lies between 600 and 1500mm. The ... areas with average rainfalls under 600mm are found in the South Island to the east of the main ranges, and include most of Central and North Otago, and South Canterbury.

So. For Fonterra to say that NZ has great rainfall for dairy is plain misleading.

But just how much water does it take to make a pound of butter fat, or a litre of milk? It's quite hard to find specifics to New Zealand, but there is helpful information in New Zealand Agritech's website. Some extracts here:

New Zealand is the world's largest producer of internationally-traded dairy products. Some other countries have larger national herds, but produce mostly for domestic consumption. In New Zealand 95% of milk is made into products such as milk powders, butter, cheese and casein and exported to 140 countries.

More than 13 billion litres of milk are produced annually on New Zealand's 13,500 dairy farms, containing 1.1 billion kilograms of milk solids (protein and fat).

Total export production is around 1.5 million tonnes, including 600,000 tonnes of milk powders, and 250,000 tonnes each of butter and cheese.

The export production comes from 3.5 million cows, in an average herd size of 250 cows, which are producing on average 3,700 litres in a milking season of up to 300 days, containing 315kgs of milksolids (about 180kgs of milkfat and 135kgs of protein).

While this per cow productivity may seem low to dairy farmers in North America and Europe, the New Zealand cow is almost exclusively fed on pasture and on conserved feed such as silage made from surplus pasture in the spring months....

One kilogram of milk production requires the consumption of one kilogram of dry matter by the cow. Therefore the feasibility of any feeding system is influenced by the cost of the feeds relative to the farmgate return for milk.....

New Zealand dairy farmers receive between $3.50 and $5.00 per kilogram of milksolids (24c to 40c per litre) produced for export and sold through Fonterra Co-operative Group....

An average cow must eat about 4,000kgs of dry matter (DM) to produce 300kgs-plus annually of milksolids, which is worth to the farmer between $1,050 and $1,500 annually, plus the value of the calf born. Gross milk value is therefore about 26c to 37c a kilogram DM and the cow's feed must cost, on average, much less than this to enable a profit to be made after all other costs are paid....

Dairying land is also bought and sold with valuations related to its productivity in terms of milksolids produced per hectare. When milksolids are providing a gross farmgate return of $4/kg, fully developed dairy land, including fences, roads, buildings and water rights, may be valued at $20 per kilogram, or in other words five years of gross revenue. For a 100ha (250 acre) farm running 250 cows and producing 800kg milksolids per hectare, the farm value could be $2 million.....

What was hard to find on AgriTech's site was anything related to the need for water. So I had to look a bit harder. And finally stumbled upon the guidance that is given to dairy farmers in the State of Victoria Australia - a water poor area - on how much water they need to budget for, if they want to run a dairy farm in a drought.

The United Dairy Farmers of Victoria offer this advice:

Dairy cattle do vary greatly in their daily stock water requirements depending on breed, stage of

lactation, water quality, type of feed intake and temperature. Daily water intake by dairy cows can be calculated as follows:

* Dry matter intake per day in kilograms x 6

* Plus 1 litre of water / litres of milk produced daily

* Plus additional allowances for extremes of weather

For example:

* Assume a dry matter feed intake of 18kg, multiply by 6 = 108 litres of water

* If the cow is producing 20 litres of milk = 20 litres of water

* on a moderate temperature day in summer then no additional allowance for extremes

* Therefore, water intake could be about 128 litres / cow / day.

As a general rule of thumb, dairy cattle drink somewhere in the range of 120 ñ 150 litres of water per day when producing about 20 litres of milk but this figure could increase by as much as 80% on a hot 35ºC+ summer day.

For example a 300 cow herd could easily consume 300 x 130 litres or 39,000litres of water daily but this figure could rise to more than 66,000 litres on a hot summer day.

For a 150 day period (5 months) with cows averaging water consumption of 130 litres per day, you are looking at 5.85 million litres of water. If water from the same source is also required for the dairy and domestic use, then this figure will be significantly more.

If we assume that the State of Victoria figures apply in the dry parts of New Zealand, what does it mean?

AgriTech reckon there are 3.5 million dairy cows in New Zealand. Let's say - for argument's sake - that 500,000 of these cows are in North Otago and South Canterbury.

Let's also assume that on a dry day they are as thirsty here, as they are in Victoria. How much water would they all drink, if 300 drink 66,000 litres/day (which is 66 cubic metres each day)?

It comes to 111,000 cubic metres per day.

Here's what Otago Regional Council had to say about rivers in the area, in January 2010:

Persistent dry weather conditions in north and east Otago mean the Otago Regional Council (ORC) is introducing strict water controls in several parts of the province and encouraging irrigators to carefully manage what water is still available. ORC Director Resource Management Dr Selva Selvarajah said dry conditions since November had put many Otago river catchments at or below their minimum flow levels, which meant resource consent holders had stopped or were now rostering their water use.

“The Shag River has fallen below its minimum flow of 150 litres/second (l/sec) and water users should no longer be taking water. As of this afternoon the Shag River is at 83 l/sec at Craig Road. It is likely that some reaches of the Shag River below Dunback are dry,” Dr Selvarajah said.

The Kakanui River has reached very low levels. This afternoon the Mill Dam and McCones flow sites were recording flows of 283 l/sec and 240 l/sec respectively. The minimum flow for both these sites is 250 l/sec. Now that the level at McCones has fallen below the minimum flow all irrigation must cease and Council will enforce the 400 l/sec bounce back condition (flows must be at or above 400 l/sec before abstraction can recommence).

“Water allocation from the Kakanui is managed by the Kakanui Water Allocation Committee which has been advised of the situation in the catchment,” he said.

The Waianakarua River at Browns Pump is running at 123 l/sec and some water take consents must now cease operation. Those that don’t have minimum flow restrictions must manage their water conservatively and observe the current minimum flow given the water shortage that is taking place.

The Taieri River is at 772 l/sec at Waipiata and has fallen below the minimum flow of 1 cumec (1,000 litres/second) The Taieri at Tiroiti is running at 930 l/sec and at Outram it is at 2.40 cumecs, just below the minimum flow level of 2.5 cumecs, while at Sutton it is running at 1.2 cumecs below the minimum flow of 1.25 cumecs.

Water abstraction from the Taieri River is dominated by deemed permits (mining privileges). Historically no minimum flow levels have been applied to deemed permits which expire in 2021.

Where water takes are carried out by RMA consent holders they should adhere strictly to the consent conditions. Council staff will be in the field closely monitoring irrigation in all these catchments. Any illegal irrigation found could result in enforcement action.

Council is contacting Taieri farmers and requesting they stop their water takes. If flow levels continue to decrease Council may issue lawful directions that water takes authorised by all permits, including deemed permits, must be stopped. However, typically in such consistently dry conditions cessation of all water takes will make very little difference to minimum flows.

The Rivers of relevance that I know of in North Otago - I grew up there - include the Kakanui and Waianakarua Rivers. These all flow through dry areas heavily used now for dairy farming. Using the data provided in this report, the total flows of the Waianakarua, Shag and Kakanui Rivers adds up to 83 + 283 + 123 litres/second, which equates to about 42,000 cubic metres/day.

Which puts into perspective the 110,000 cubic metres per day that 1/7th of NZ's dairy herd needs to drink per day.

Now I know this is all a bit rough, and other rivers irrigate this area, but NZ's dairy herd is growing like topsy, and it's very very thirsty. And this is at times when our rivers are least able to provide water. (I note here that downstream sections of big rivers like the Waitaki still have large flows in dry months, but there are very large areas of Otago and South Canterbury that are irrigated by the smaller rivers.)

And don't forget the dry feed that is grown alongside the diary herds in summer, to provide dry feed in winter time. Those crops need irrigating at the same time as the dairy herds need watering....

It's time this issue was seriously engaged with, and I'm not even sure that charging for every cubic metre of water used for dairy will be enough. Bit like charging for carbon and hoping that will fix climate change.