For sheep; beef farmers, the tradeoffs needed to meet tighter GHG regulation are becoming clearer

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The conversations around meeting a zero-carbon environment for New Zealand by 2015 appear to be warming up. Climate Change Minister has started off the conversations with announcing last week a six-week consultation period which is leading up to the parliamentary process and a likely Act by 2019.

With the likelihood that agriculture will be coming under the Act it is worth-while having a look again at what this may mean for livestock farmers.

Currently the New Zealand traded carbon credit is worth around $20.50 average (and there is a huge diversity around ‘average’ for sheep or beef farms).

New Zealand sheep and beef farms produce approximately 4 tonnes of greenhouse gases per hectare per year. On the face of it this would mean the average hectare would attract about $80 per year of GHG liabilities.

The vast majority of this is made up of Methane (CH4) and Nitrous Oxide (N2O). Of the livestock emissions methane makes up around 60%. (This could get up to 70% depending upon livestock systems.)

Given the discussions the other week that if methane is omitted from the calculations, and there appears to be the likelihood the government may accept this argument even if international bodies choose not to, the liability per hectare reduces to around $32 per hectare.

When the program does come into force the price of carbon is likely to rise, even if only for a few years until mitigating techniques are instigated; however not to the giddy heights some have been predicting but more likely $25-$30 per tonne of CO2.

Some farmers believe that by increasing pasture production, the humus content of soils (and hence the soil carbon content) will increase to outweigh methane or nitrous oxide emissions completely. If true, even small increases in soil carbon over time could strongly impact on our national carbon budget, because nearly half (13.61 million hectares) of usable land in New Zealand is used for livestock farming.

However, research being conducted by Landcare Research shows that soil carbon levels in New Zealand’s grazing lands are at or near steady state.

The main form of mitigation for sheep and beef farms is likely to be in the form of tree plantings. Trees are not a permanent solution for copy trading binary options unless they replace all livestock (and let’s not go there) but pine trees for instance can sequester up to 50 years and other slower growing species far longer, especially natives. A hectare of pine trees for instance can sequester on average over a 30 year period between 19 and 29 tonnes per year per year depending upon the region.

So, with the methane out of the equation it means for an average 300 hectare farm 29 hectares of trees should be able to mop up all liable emissions, regardless of what the cost is.

For many hill country farms this will benefit the environment for others it may be seen as a sacrifice however depending upon forex broker mt4 the cost of carbon it may prove to be a useful income source.

Dairy farmers with an average of nearly 11 tonnes (Pre-Methane reductions) of GHG have a greater problem with less means to reduce. The big message to all is to keep the pressure on to keep livestock methane out of any National equations.

Following on from this the next big question will be how will be GHG’s be measured; maybe a simplistic trade off will be methane for a generic stock unit-based equation? Works for me.

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Regarding the markets; things are quietening down somewhat on all fronts in the saleyards, North and South Islands, although currency signals prices are still healthy. Good news is schedules have held with some small lifts for cow down South.

Wool has stopped the elevator ride up and is now in a holding mode. And venison still the glamour girl.

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