Relating the carbon footprint of milk from Irish dairy farms to economic performance

Mitigating greenhouse gas (GHG) emissions per unit of milk or the carbon footprint (CF) of milk is a key issue for the European dairy sector given rising concerns over the potential adverse effects of climate change. Several strategies are available to mitigate GHG emissions, but producing milk with a low CF does not necessarily imply that a dairy farm is economically viable. Therefore, to understand the relationship between the CF of milk and dairy farm economic performance, the farm accountancy network database of a European Union nation (Ireland) was applied to a GHG emission model. The method used to quantify GHG emissions was life cycle assessment (LCA), which was independently certified to comply with the British standard for LCA. The model calculated annual on- and off-farm GHG emissions from imported inputs (e.g., electricity) up to the point milk was sold from the farm in CO₂-equivalent (CO₂-eq). Annual GHG emissions computed using LCA were allocated to milk based on the economic value of dairy farm products and expressed per kilogram of fat- and protein-corrected milk (FPCM). The results showed for a nationally representative sample of 221 grass-based Irish dairy farms in 2012 that gross profit averaged €0.18/L of milk and €1,758/ha and gross income was €40,899/labor unit. Net profit averaged €0.08/L of milk and €750/ha and net income averaged €18,125/labor unit. However, significant variability was noted in farm performance across each financial output measure. For instance, net margin per hectare of the top one-third of farms was 6.5 times higher than the bottom third. Financial performance measures were inversely correlated with the CF of milk, which averaged 1.20kg of CO₂-eq/kg of FPCM but ranged from 0.60 to 2.13kg of CO₂-eq/kg of FPCM. Partial least squares regression analysis of correlations between financial and environmental performance indicated that extending the length of the grazing season and increasing milk production per hectare or per cow reduced the CF of milk and increased farm profit. However, where higher milk production per hectare was associated with greater concentrate feeding, this adversely affected the CF of milk and economic performance by increasing both costs and off-farm emissions. Therefore, to mitigate the CF of milk and improve economic performance, grass-based dairy farms should not aim to only increase milk output, but instead target increasing milk production per hectare from grazed grass.