Purpose
Dairy farmers in Washington state have been under significant pressure to reduce their carbon footprint in recent years. Dairy cooperative sustainability initiatives such as achieving carbon neutrality by 2050 have left many producers wondering what will be required of them to help their cooperatives meet this goal. Coupled with regulatory pressures to report on their greenhouse gas emissions and the threat of regulation to reduce them, uncertainty remains for producers around the types of climate-smart practices that will enable them to reduce their carbon footprint while remaining economically viable.
Without a thorough understanding of the costs and risks, pressures, or requirements to implement climate-smart practices may inadvertently drive consolidation and the accelerated loss of small to medium sized farms.
What Did We Do?
Utilizing Washington state dairy facility data, I conducted an economic cost benefit analysis of two climate-smart practices that capture GHGs from anaerobic storage: anaerobic digestors and the covered lagoon and flare system and the size of operation needed to implement both practices based on current and historic market conditions and technology costs. Private and public investment in climate-smart practices can have a substantial impact on whether they are economically feasible for producers to implement. I considered the impacts of various levels of cost-share on the size of farm able to adopt the technology based on several economic indicators.
What Have We Learned?
Most dairy farms cannot simply raise their prices to offset the costs of climate-smart practices, therefore it is critical to understand the broad economic impacts of imposing emissions reductions mandates. With consolidation being a well-documented trend across dairy farms in the United States, it is possible that climate regulations will only further exacerbate this trend due to the high capital costs and market risk associated with climate-smart farming that only facilities of scale can take on.
Future Plans
I am actively assisting research right now in Washington state with university and private researchers into dairy farm carbon intensities, across various farm sizes and facility types. An overview of this research may be available by Summer of 2025. Once this work is completed, we will have a better understanding of overall farm emissions and what climate-smart practices may be necessary for farms to implement to help achieve cooperative net zero targets.
Authors
Presenting & corresponding author
Nina Gibson, Agricultural Economist and Policy Specialist, Washington State Department of Agriculture, KGibson@agr.wa.gov
Additional Information
Link to Podcast I hosted, the Carbon and Cow$ Podcast, which covers the risks and opportunities associated with carbon markets for dairy and livestock producers: https://csanr.wsu.edu/program-areas/climate-friendly-farming/carbon-and-cows-podcast/
Link to my program’s homepage at WSDA: https://agr.wa.gov/manure
My Linkedin: https://www.linkedin.com/in/nina-gibson-b482a8119/
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