New Zealand launches pilot project to improve dairy farms' profitability

New Zealand dairy farmers will soon be invited to take part in a pilot project aimed at improving on-farm energy use, cutting expenditure and improving the bottom line.

The Dairy Energy Action Programme, a joint initiative from Fonterra, the Energy Efficiency and Conservation Authority (EECA) and the Ministry of Agriculture and Forestry, will see 150 farmers get an energy audit and help to put improvements in place.

Results from pilot farms will be reported back in June 2011, with the findings used as a basis for energy-saving tools and information for the wider dairy community. The pilot aims to help farmers cut their energy spend by at least 10%. If achieved throughout the sector, this would be worth around NZD16 million (US$11 million) annually.

EECA chief executive Mike Underhill said the dairy sector is a crucial export earner for New Zealand, so improving the efficiency and competitiveness of the industry is in the national interest.

''Dairying is an energy-intensive business - the average farmer spends NZD14,000 (US$9770) a year on electricity alone. Margins are tight and farmers are always looking to streamline operations. Once you've found efficiencies, these energy savings aren't a one-off, but build year on year – so can total a very substantial sum,'' he said.

''This is all money that can be re-invested in farm production. The potential is very promising - and in competitive international markets, having an energy efficient industry can only be good,'' Underhill said.

Fonterra's GM Sustainable Production, John Hutchings, said the project would not only help farmers reduce on-farm costs, but also had the potential to contribute to significant national energy savings and lower greenhouse gas emissions.

''Dairy farms account for nearly 2.5% of the country's electricity use and also slightly more than all of Fonterra's New Zealand manufacturing sites combined. Our experience at these manufacturing sites suggests that energy savings of 10% or more are possible. If this energy audit can help dairy farmers achieve similar results, that will be a significant electricity saving – and with this saving comes reduced costs, reduced greenhouse gas emissions and a more sustainable brand.''