Thursday, 7 September 2017

Meet our cows

Due to the popular request of one dude on Twitter, this post is about our cows.

We inherited a mixed herd when we bought this place: quite a few Jerseys (the brown ones), a smaller number of black & white Friesan, with the bulk of the herd being cross-bred. We're not too keen on the Fresians because our farm is 25% hills and we milk once-a-day. Fresians are generally larger, less agile on hills and while they produce more milk it contains a smaller percentage of milk solids, which is what we get paid for. Strong udders are essential for once-a-day and our thinking is that it's better if cows are carrying around milk with a higher solids percentage.

The life cycle of a dairy cow begins in the springer paddock, which is where all of the soon-to-calve cows live. Here's a newborn calf taking its first drink from its mother.

They are alone because all the other cows are eating the fresh grass behind the camera that I'd just opened up. Mum was more concerned to complete the birthing process than get a feed of the new grass, so she stayed there for a while, eating the afterbirth and licking her calf clean.

Sometimes it's difficult to match up calves with their mothers. A version of the aunty problem is shown below: they're all interested in the calf but only one is the mother.

Once we've decided on the mother calf pairings, we give the calf a numbered necklace and record the cow & calf numbers together.

Then we leave them alone for at least 24hrs and often 2 or 3 days, contrary to the advice of DairyNZ who say calves should be collected twice a day and fed colostrum to ensure they get those vital mother-child antibodies. We prefer to trust nature. We do monitor things and ointervene if we see this is not happening. Some cows are shocking mothers, and some calves go wandering.

There is no good time to separate a calf from its mother. Beef farmers leave the calves on for several months, and both animals suffer when the resulting strong bond is broken. A couple of seasons ago we left all the calves on their mothers for a month or more and the pain of separation after that was just awful to behold. Now we take the calf when it is 1-3 days old. The high-bred girls stay with us here, and everything else either goes to slaughter or to other people who grow them on for later slaughter.

Either way, all calves come into the shed where we give them dry bedding and milk twice a day. They generally take to the milk feeder pretty well, like these little ones...

Roll forward one year, and those little tykes will look like this.

These are some of our replacement heifers, born last spring and rapidly turning into full sized cows. We'll put some young bulls in with them in mid-October. All going well, by this time next year they'll have calved and be supplying milk. For now though, we're trying to keep these girls growing strongly despite the inevitable feed pinch in late winter / early spring. We make a lot of good hay in the summer and are feeding it to these girls right now: that steel contraption in the foreground is a bale feeder attached to the back of a tractor.

After cows have calved they go into the colostrum mob. Their milk can't be put into the vat for collection/sale so we use it to feed calves. These colostrum mob cows have eaten all their grass for the day and are now scoffing grass silage.

We keep a close eye on the colostrum mob. Eight days after they've calved we start testing their milk for any evidence of mastitis. As soon as a cow's milk is clear, she gets drafted out and put in with the main milking mob. This mob (below) gets the best of everything: plenty of grass, silage top-ups as required, mineral licks, ad-lib salt.

I was hoping to post some pics of my favourites, but that'll have to wait for another day.

Monday, 28 August 2017

The parentage of scandals

While we wait to learn whether the mother of all scandals will in fact break soon, or be tied up with legal threats forever, here's a genuine scandal with clearly identified parents.

Its a familiar old game: private interests 'work with' the government and end up being subsidised. I once heard David Caygill describe his first meeting with Fletchers after he became Minister of Energy following the 1984 election. Fletchers came in talking about the potential for exploiting iron sands. Caygill said something like, "sounds great, but why are you telling me?". The answer was they wanted the government to underwrite the project. That's how it used to happen under Muldoon, and if the "let us help you buy Xero shares" scandal is any guide, we're right back in that same place now. Except with new opportunities.

Like controlling the flow of research and information, as New Zealand's fertiliser duopolists, Ballance and Ravensdown, appear to be doing through Overseer.

Overseer is a critical tool for environmental regulation tool in NZ, relied on by all and sundry to predict nitrate leaching based on farm level inputs, among other things. Check out the "about us" section and note the following claim at the top of the page:
The nutrient budgeting tool OVERSEER is the result of a long history of collaboration between the government, the fertiliser industry and agricultural scientists. 
OVERSEER is jointly owned in equal shares by the Ministry for Primary Industries (MPI)AgResearch Limited and the Fertiliser Association of New Zealand (FANZ).

Lots of public money has gone into developing this software as admitted in the first sentence. The second sentence is false. I know this because I scrolled down below the nice photo to read:
OVERSEER Limited was established in April 2016, to create a sustainable business that will ensure the long-term viability of OVERSEER to meet growing user needs. 
As a company, we work towards providing a scientifically robust tool that enables nutrient flows within the farm to be better understood. We recognise the important role we play in New Zealand primary industries and are focused on ensuring the tool meets users needs.
A quick visit to the Companies Office shows that Overseer Ltd is 99.93% owned by New Zealand Phosphate Company Limited, which is owned 50:50 by Ballance and Ravensdown.

AgResearch owns the remaining .07% of Overseer, MPI owns nothing. So the primary tool for environmental regulation of agriculture is fully controlled by a fertliser duopoly.

Which is why, under this structure, Overseer will not properly evaluate biological or regenerative farming systems: these systems threaten the earnings of the fertiliser companies, who control the research agenda.

Tuesday, 15 August 2017

Labour's water policy

Previously on this blog, I used the Greens policy proposal of a 10c/litre royalty on water bottlers as an excuse to witter on about how water is currently managed and describe some of the relevant economics.

Labour has now released its water policy, headlined "clean rivers for future generations". It talks about the need for "more sophisticated farming methods that rely less on ever higher stocking levels and are more focused on value-add". I strongly support these objectives.

The bit attracting most attention though is that "a royalty on commercial consumption of water will assist with the cost of keeping our water clean". Farmers are grumpy, as you can imagine. One Canterbury dairy farmer estimated that at 1c/cubic metre, his water royalty for the year would be $26,000. To put that in perspective, he is currently paying $90,000 per annum for the electricity to pump his irrigation water.

Anyway, as a farmer and an economist, I'm also a bit grumpy. Not because I object to water royalties as such, but because I think the proposed policy, as it affects agriculture, misses the mark in an important way.

A future Labour-led government would want to spend public money cleaning up waterways, and there is a logic in raising the funds for that clean-up from polluters. However cleaning-up is not a long-term solution if the polluters continue their current behaviour, and the policy is clear that it seeks different (more sophisticated) farming methods.

If we want to change farmer behaviour, new environmental taxes on farming should be designed to be (more or less) equal to the cost farmers impose on society as a whole. This is known as a Pigouvian tax. It'd be extremely difficult to argue against taxes set on this basis, because they are simply telling farmers: pay your own bills. Notice that Labour is already almost selling its policy on this basis ("assist with the cost of keeping water clean").

My concern is that water royalties are a poor proxy for the environmental cost of intensive farming (including horticulture, cropping, orchards etc). Dairying is a huge water user but that doesn't really matter in places where there is plenty of water. Nitrates are the main problem with intensive dairying, so that is what should be taxed.

Some examples might help understand this point.

  • In our area, we are blessed with pretty decent rainfall (too much right now!) so irrigation is used far less than in Canterbury. Many of our neighbours are serious urea addicts though, because that's how high stocking rates & production are maintained in the standard dairying model. 
  • Wine growers in Marlborough have very modest water needs compared with dairying. Pesticides and fertilisers used by wine growers are having a serious impact on the health of local waterways.

Tuesday, 25 July 2017

Irony overload at the NBR

Please have read of this piece, posted on the NBR website yesterday (I believe it's ungated, but if not NBR has a free 30day trial).

The article starts & finishes with quotes from Peter Gluckman and unobjectionable statements about the role of science in a post-truth world. You'd think this would be fertile ground for the author, who is EPA's chief scientist.

But between those bookends, what do we have?
  • an argument that neonicotinoids do not harm bees, supported by information supplied by
    • USA beekeeper, blogger and information analyst Randy Oliver.
That's it. No reference to any of the recent scientific or regulatory information about neonicotinoids which you might think would be relevant. [several irrelevant straw-persons are brutally murdered though]

This might be excusable if it were from a junior reporter who stumbled across a single source, though even then I'd have expected an editor to notice. No such excuses for the actual author though, who is the EPA's chief scientist. Jacqueline Rowarth must be aware of the science that weighs against Mr Randy Oliver's opinion but chose to not disclose any of that, much less to discuss the evidence herself, or even point us to someone that had.

Worse, Rowarth assumes the cloak of an honest-broker scientist while promoting an obviously partial theory and strongly implying that there is no contrary evidence. I tried to comment but failed. The NBR later explained why on twitter.
So it's not just me. Readers at the "meeting place of intelligent business" have spoken. I don't condone personal abuse, but can understand how anger at this article might either spill-over into personal abuse, or be interpreted as such. Especially since Rowarth has a history of getting science wrong and attacking people without due cause.

Sunday, 23 July 2017

Water allocation & pricing in NZ

The Greens water policy proposes a 10c/litre royalty on the "sale and export of water, including bottled water", and cracks open the debate over water allocation & pricing policies by signalling that further measures are under consideration.

This post outlines the main economic issues arising from water-using industries in NZ: bottling, hydro-power, and farming particularly dairy. I'm going to start by assuming that most people would support policies that:

  • don't cause undue depletion of the water resource;
  • don't strand capital investments; and
  • ensure that water polluters pay fair prices. 
After discussing these points, I'll return briefly to the water bottling issue.

Depletion is generally managed by setting minimum flows for rivers and maximum off-takes for groundwater (from aquifers). In a river setting, rights to pump water are typically shut-off when the river level falls to some trigger point. Minimum flow levels are set by Councils in consultation with freshwater scientists, anglers and other interested parties. This works best when the flow is measured downstream from the off-takes: otherwise you need to predict how a low flow at an upstream point will affect the river below the off-takes. Ground water (in aquifers) is much more difficult to measure. The raw data comes from water levels in monitored wells but its not easy to map the aquifers or their connections with rivers and other aquifers.

This issue is not completely sorted out, but the 2014 National Policy Statement obliged Councils to get cracking to ensure that water resources are not over-allocated, and to claw back over-allocations where they exist. My impression is that it has been effective in getting Councils to focus on these issues.

In some cases over-allocations have been notional rather than real: e.g. Marlborough wine growers have collectively been allocated more water than the aquifers can stand, but they're not using their full allocations. The proposed solution is to regulate allocations so that wine growers have enough water in almost all years, which frees up water for allocation to other people at the times of year that wine growers don't need it.

Asset Stranding
The basic point is that if we want revenue from water users then any pricing will need to be at a level that allows them to remain in business. Otherwise we get no revenue. My guess is that a royalty of 10c/litre on the "sale and export of water, including bottled water" would not kill off the bottled water exporting business. If so, people who've sunk capital into wells, pumps, filters, and bottling plants will continue to earn profits that help recoup the capital invested, just at a slower rate. This particular goose would then remain healthy enough for ongoing plucking.

However the same royalty rate would probably stop all hydro-power generation, and agricultural/horticultural irrigation over-night. Any firms owning un-depreciated assets used for this stuff would have to just write them off: those assets would be "stranded", unable to earn because of the water price. End result: dead goose = no revenue & much less productive capacity.

So if you're after revenue, don't set tax/royalty rates so high that they strand assets. More generally, remember these wise words from Jean-Baptiste Colbert 
The art of taxation consists in so plucking the goose as to procure the largest quantity of feathers with the least possible amount of hissing

Polluters Pay
The Greens are targeting the export of bottled water and seeking a contribution to the public purse from these firms. A different motive for tax is to send a price signal to polluters. Ideally, these Pigouvian taxes would be set at a level that recouped just enough cash to compensate for the damage costs that polluters impose on the broader community. Farming is where this issue bites, because the way we farm pollutes our water, imposing a cost on everyone else.

Basic welfare economics suggests we should investigate taxes on bagged nitrogen (urea). If dairy farmers used much less urea, our rivers would be much cleaner and we'd also stand a much better chance of sequestering carbon in our soils rather than emitting it.

Like tobacco, the urea business is highly profitable, so urea suppliers will probably absorb a fairly high percentage of any tax. This means that a relatively small % of any tax will be passed-through into retail prices. And since farmers are addicted, they won't be very price sensitive. So, ironically, even if our aim in imposing a urea tax was to send socially efficient price signals, it would end up raising a fair bit of revenue.

All of the above is very mainstream economics, meaning it is based on the pursuit of (social) efficiency. The water bottling royalty/tax is clearly not aimed at efficiency objectives. I expect it will get some support as a political move, but it's not ideal as a leading measure to address our broader issues around water allocation and quality.

Wednesday, 12 July 2017

GMO Hypocrites

Previously on this blog, I argued that David Runciman failed to convert his excellent analysis of the role of scientific consensus in the climate change debate into a useful tactical recommendation: you can't credibly accuse anyone of hypocrisy if your only evidence is stuff that you think they think.

Before that post, my old friend Grant Jacobs had already taken to the electric twitter machine to:

endorse exactly this tactical error in Runciman's piece
and lodge a very strong claim
Note the sudden shift of topic from climate change to GMOs.

Before the NZ skeptics expelled me for heresy, they emphasised their maxim that strong claims require evidential support. The onus of proof is on the alligitor.

As a leading skeptic, Grant subscribes to this maxim. Having made a strong claim in public he is now obliged to back it up.

Monday, 10 July 2017

Science, skepticism and humility

David Runciman's recent Guardian piece carefully examines how and why a political constituency emerged for skepticism about human-induced climate change, and then drops the ball right at the end with the try-line in reach.

The main thrust is that the oil majors and other large firms have commercial incentives to cast doubt on human-induced climate change, so funds are available to influence public opinion, which demand is met by various scientists, lobbyists and politicians.
 ExxonMobil alone has spent more than $240m on public relations in this area in the past two decades. Many of the leading Republican candidates for president in 2016 (though not Trump) took campaign funding from the Koch brothers, who have been at the forefront of the fight against the scientific consensus on climate change.
Runciman does a good job of exploring the way commercial incentives affect the supply of perception-management services. Absent a commercial motive, there would be less doubt conveyed to the voting public and the apparently quality of the doubt would be lower. So on the supply side of the doubt market, climate change looks a lot like tobacco: in both cases, substantial and well-established commercial interests purchased scepticism from scientists.

Motives matter, but so do methods. Runciman argues that it can be easier and more effective to label your opponent as a hypocrite than a liar. Some tobacco science shills smoked their own product but you can almost always accuse a climate change activist of not doing enough...
Hypocrisy is hard to avoid when it comes to the politics of climate change, since it is a collective-action problem. It’s far from clear what difference any individual action will make. What matters is what we do together. This makes it practically impossible for any one individual to match words to deeds. Yet the failure to do so provides the perfect stick for the climate cynics to beat their opponents with.
We're all familiar with these cheap cynical jibes: oh you have a plastic bag / flew here / own a flat-screen TV, so you don't personally really care about climate change. Runciman reckons this kind of bullshit is effective at shifting public opinion against climate change scientists, and that climate-change-deniers have converted skepticism for their own commercial ends.
Twitter is a vast hypocrisy-generating machine that is corroding democratic politics. Scepticism, which is a democratic virtue, is giving way to cynicism, which is a democratic vice, across the board.
I think many people would broadly accept most of the above and, notwithstanding the odd complaint, be broadly on board with Runciman right up to his last couple of paragraphs, reproduced below.
We live in an age when mistrust of politics has spilled over into mistrust of expertise, and vice versa. To respond with ever-greater certainty in the name of science is a big mistake. Expertise doesn’t just need humility. It also needs to reclaim the idea of scepticism from the people who have abused it. Experts need to find a way of expressing uncertainty without feeling it undermines their expertise. Voicing doubt has been allowed to become a synonym for admitting you were wrong. The way out is to stop insisting that you were right in the first place. 
Lots to agree with here. We definitely need humble scientists rather than arrogant ones, so uncertainty needs to be honestly appraised and clearly communicated. I'm also keen on reclaiming skepticism from those who have abused it, but the skeptics and I have very different opinions about the scope of this problem and the culprits, so lets just set that aside for now so we can focus on the ball-dropping final paragraph.
The scientific consensus on climate change is real. But by insisting on its merits for the purposes of politics, its champions have exposed it to ridicule. Political arguments for climate science – indeed, for any science – in the age of Trump should not keep saying that the populists are lying about the consensus. They should say that they are hypocrites about the doubt: they do not practise what they preach because they think they know the answers already. Climate change deniers argue they are only trying to discover the truth. We should all be sceptical about that.
Where did that come from?  Even though the other side is lying about the consensus on climate change, and has strong commercial incentives and the ability to generate doubt, Runciman wants us to ignore all that and instead argue that they are hypocrites. Which they can easily deny by simply claiming to be open-minded.

It's a bad idea tactically because nothing can be proven, which makes it a very bad idea strategically for the non-shills.