3.1 Research Approach
A mixed methods research approach (Creswell & Plano-Clark, 2006) was used to construct and model the two farm systems necessary to investigate the environmental and economic impacts of a composting barn on New Zealand dairy farms. The mixed methods approach allows quantitative and qualitative data to be collected, analysed and mixed in a single study to provide a better
understanding of the research than either approach alone (Creswell & Plano-Clark, 2006). In this study, the two farm systems were referred to as ‘without a composting barn’ and ‘with a composting barn.’ The Lincoln University Dairy Farm (LUDF) was used as the base farm (without a composting barn) due to its proximity and availability of physical and financial data. A composting barn system was then modelled on this base system using information gathered from qualitative and quantitative sources. The use of Overseer® and Excel based modelling was then used to draw environmental and economic comparisons, respectively, between the ‘with’ and ‘without’ system.
3.2 Research Questions
1. What are the reasons for building composting barns in New Zealand? 2. How will a composting barn affect the production levels of a dairy farm?
3. What are the critical components of the composting barn system that will affect the economic success of a dairy farm?
4. What are the critical components of the composting barn system that will affect the nutrient leaching profile and greenhouse gas emissions on a dairy farm?
5. What are the key constraints to adoption of composting barns in New Zealand and can these constraints be overcome?
3.3 Data Collection
3.3.1 LUDF Base Farm
The base LUDF farm system was created from physical and financial records publicly available on the LUDF webpage (SIDDC, 2018). The most recent data from the 2017/18 season was used to create
27 this base system to allow for the most accurate comparisons to be made. Financial data gathered was entered into Excel cashflow and investment return spreadsheets to determine the current financial performance of the LUDF without a composting barn. Key performance indicators (KPIs) including internal rate of return (IRR) and net present value (NPV) were generated using this data. All of the farm’s nutrient budget and greenhouse gas emission figures were gathered from Overseer® records that had previously been created for the LUDF. Excel based feed budgeting models were also used to develop the initial feed budgets based off stock performance and pasture production.
3.3.2 Composting Barn System
The data required to create the composting barn system was collected from an existing New Zealand composting barn and from experts in the field. This included gathering insights from researchers surrounding the new feed system, construction company Calder Stewart to advise on composting barn design and costs, and general farm systems and cow housing experts to advise on the change in system. As with the base farm, financial data was entered into Excel spreadsheets to generate the KPIs and allow comparisons to be made. Similarly, the physical information from the new
composting barn system was entered into Overseer® to compare the nutrient outputs and GHG emissions.
3.4 Environmental and Economic Models
3.4.1 Overseer®
Overseer® Nutrient Budgets (version 6.3.0) was an important tool used to measure the nutrient inputs and outputs of the LUDF with and without a composting barn. Overseer® is a farm-level decision support model that helps users develop annual farm nutrient budgets and test the
environmental impact of farm management changes. The model is based off scientific principles that provide estimates of a farm’s nutrient leaching profile in kilograms per hectare. In addition,
Overseer® helps users identify the major sources of GHG emissions from farms based on the New Zealand Greenhouse Gas Inventory methodology (MfE, 2016), reporting on a per hectare and per product basis. The ability to use Overseer® to test management practices prior to and after the incorporation of a composting barn provided clear comparisons and allowed the critical components that affected the environmental outcomes to be identified.
It should be noted that Overseer® has a certain margin of error associated with its outputs due to necessary simplifications of complex processes (Shepherd et al., 2013). However, Overseer® is currently the best software tool available for modelling nutrient cycles and GHG emissions from a
28 farm system and is accepted for use by regulatory bodies. As such, Overseer® was considered the most appropriate tool for use in this research project but note figures should be used with caution when extrapolating data.
3.4.2 Microsoft Excel
Microsoft Office Excel 2016, a computer software programme, was a key tool used to analyse the financial performance of a composting barn system in comparison to a traditional New Zealand dairy farming system through the creation of monthly cashflows and a 20-year investment analysis (including depreciation and loan schedules). Monthly cashflow budgets allowed the impact of a composting barn on farm production and expenses to be determined while the investment analysis compared the long-term returns on investment. A twenty-year period was selected for the
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