Dry Cattle Rancher Niels Hansen says farmers across the country could see economic benefits if they add carbon forestry to their operations.
Hansen, his wife Fiona Howatson and his parents Peter and Grethe Hansen have planted over 15% of their Taranaki dry cattle farm in the carbon forest, with 217 hectares planted with pinus radiata and 8 ha planted with mānuka (Leptospermum scoparium) .
Hansen’s parents immigrated to New Zealand in 1964. Having a bit of forestry on a farm is a Danish way of life, so they continued the tradition here in New Zealand. This gave them lumber used for fence posts and acted as an early cost saving measure.
“We’re almost on our third tree rotation now. We are in the Emissions Trading System (ETS) with our first batch of trees in over a decade. We have also thought about how to expand our forestry and have therefore added a lot of trees over the past four years, planting more than 200 ha of additional trees,” says Hansen.
The area council funded the planting of pine trees after floods more than a decade ago destroyed many farms in the area. On Hansen’s farm alone, more than $90,000 worth of fences were destroyed by landslides. They spent over $64,000 in the first month after the landslide to repair road access to the farm.
The council released a stress fund for farmers which financed the planting of trees with the aim of mitigating future damage by stabilizing hills and preventing the loss of silt from steep country.
The stress fund paid for all planting expenses, and since the forest sections were required to be fenced, the fund also covered half of the fencing expenses. The scheme is still active.
Hansen said this led to a number of unexpected positive results.
Although the new forest has reduced the grazing area of the farm, it has had a positive effect on its production and the income from the ETS has also had monetary benefits, for example access to funds to repay debt .
Planting forests on the steepest parts of the farm resulted in a reduction of grazing area by almost 15%.
Hansen had already been following intensive grazing practices for some time and the loss of this grazing area meant he had to further refine his management. However, he soon realized that the performance of the farm increased when he separated the steepest areas.
While other similarly sized farms in the area might have an average of 50 paddocks, it manages 400 paddocks, with around 60 mobs moving in every two days. Having followed this intensive grazing approach even before he started converting more land to forest, he already understood the increased paddock management that would be required.
“It won’t be the same on every farm, but on many dry cattle farms you can improve your performance by removing some steep sections and using flatter, more fertile areas more productively. In late summer and winter, the value of metabolizable energy (ME) in steep, low-fertility areas is often not sufficient to fatten livestock and, depending on ME, may even not be sufficient for maintenance. This impacts animal performance and pasture growth rates,” he says.
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There are also other reasons for excluding certain areas. By late October the low fertility grass on the steeper sides is seeding and you have to fight with the stock to eat it. Cattle are lazy and prefer to be on flat sections and often already avoid steeper areas earlier in the season as they seek better feed. Excluding these areas therefore means that livestock are still grazing productively. Smaller paddocks mean they are still eating quality forage and consuming more of it because they find it palatable.
Literature shows that an average farm has a feed conversion ratio of up to 27:1, meaning that 27 kg of dry matter is consumed to produce 1 kg of marketable beef. In systems using high-fertility grass through intensive paddock management, this can be brought down to a conversion rate as low as 14:1, Hansen says.
As a result, the farm load rate increased and performance increased.
“The key to maintaining high performance is maintaining intense rotation after winter. The extra ME generated by regrowth makes a significant difference in animal performance.
“You don’t have to be obsessed with trees, but trees have taught me to do more on my farm,” says Hansen.
Hansen planted 37 hectares of pine on the farm in 1992. These will be harvested in 2022. In addition to funding for planting available a decade ago, which motivated him to take up carbon forestry, a big motivating factor was the fact that half of the fencing costs were covered and his management principles meant that he “loves to fencing”.
The council originally paid $2,000/ha to plant forest, an amount that covered the costs. They also paid $15 a yard for stick fences, or $7 if electric fences were used.
Under the ETS, farmers have the option of planting native pines or forests. But pines make more sense economically. The amount of carbon sequestered increases as the tree grows. Native species sequester about 1.3 tons of carbon per hectare in the third year of growth. They reach a maximum of about 12 tons per hectare per year. They reach the maximum only in the 11th year of growth.
As for the radiata pine, it sequesters about 6 tonnes of carbon per hectare and per year from the third year of growth. In the fourth year, it reaches the long-term average of 25 tonnes per year.
At the last auction, the carbon price was set at $68 per tonne per hectare per year.
Tree carbon in the ETS system can accumulate and sell carbon for 16 years. Once harvested, they must be replanted. The replanted trees then become a permanent forest and you have no other carbon cycle that can be used as income.
Hansen thinks having low-fertility areas of a farm planted in forest makes economic sense for a number of reasons. Carbon under the ETS scheme pays for 16 years, with the pay increasing as the trees age and are able to store more carbon.
At the current price, a farmer receives on average about $400 per hectare per year in the third year after planting a forest. By year five, this increases to about $1,700 per hectare per year.
In contrast, a dry animal farm in a mountainous region can make a profit of $200 to $250 per hectare per year.
“All of these benefits come from something that is partly funded, pays you for the carbon, improves your land and stocking rate, and is ultimately a permanent production forest that stabilizes the land. On this day, the fence goes up, the farm becomes more efficient and separates the contours.
Hansen said at a recent Ministry of Primary Industries conference, it was stated that around 380,000 hectares of forest needed to be planted to meet New Zealand’s carbon sequestration targets. These lands will mostly be owned by private companies and people outside the rural communities and will often consist of farmland converted to forest. Management will also be profit driven. These areas will never be cultivated again and the land will be lost forever for food production.
Dry cattle farms cover around 7 billion hectares of land in New Zealand and Hansen thinks that if farmers plant 5% of their farm in carbon forest it could mean that all private land planted solely for forestry carbon are not necessary.
“If every dry-livestock farmer out of the 7 million hectares under dry-livestock cultivation plants 5% (350,000 hectares) of their land in carbon forest, then all the benefits to be realized will be in the hands of farmers and rural communities. and productive farmland would not be lost,” Hansen said.
“The 380,000 hectares, each producing 25 tonnes of carbon per year, traded at an average of $80/ton could mean around $760 million in profit to farmers each year. If not, there is a drain out of the rural economy. This corresponds to the profit that farmers generate on the entire harvest of 23 million lambs. said Hansen.