Sustainable dairy production requires farms that are economically viable, environmentally sound and socially acceptable. A low environmental impact of milk production is not necessarily associated with an economically viable farm. To gain insight into a possible “trade-off” between economic and environmental sustainability, the relation between the environmental and economic indicators of dairy farms was quantified, and farm characteristics that influence this relation were identified. Economic and environmental indicators were quantified for 119 specialized dairy farms in 2005, based on data from the Dutch Farm Accountancy Data Network (FADN). Economic indicators used were: gross value added expressed per kg fat-and-protein-corrected milk (FPCM) or expressed per unit of labour, i.e. labour productivity. Environmental indicators used were: land use per kg FPCM, energy use per kg FPCM, global warming potential per kg FPCM, eutrophication and acidification potential per kg FPCM or per ha of land. Environmental indicators were deduced from a life cycle assessment. High labour productivity on dairy farms was associated with low on-farm energy use, total and on-farm land use, total and on-farm global warming potential, and total and off-farm acidification potential per kg FPCM. High labour productivity, however, was associated also with high on-farm eutrophication and acidification potential per hectare. From partial least squares regression analysis, it was concluded that relations between economic and environmental indicators were affected mainly by milk production per ha, annual milk production per cow, farm size, and amount of concentrates per kg FPCM. An increase in annual milk production per cow, for example, not only increased labour productivity, reduced energy use and global warming potential per kg FPCM but also, in the case of an unchanged stocking density, increased eutrophication and acidification per ha. To be economically and environmentally sustainable, animal production in the Netherlands, therefore, should focus on high animal productivity, i.e. high annual milk production per cow and efficient use of feed per kg milk, and moderate stocking density, provided that a good animal welfare standard is guaranteed.
The concept of sustainability was introduced to address concerns about our future livelihood (WCED, 1987). Sustainability is a holistic concept consisting of three domains: economic, environmental, and social, also referred to as the three pillars: profit, planet, and people (Elkington, 1998). Most sustainability assessments of food production, however, address only one domain, e.g., the environmental impact of the production of food. Production of milk by dairy cattle, for example, contributes to nutrient enrichment of the ecosystem, climate change, and acid deposition. Life Cycle Assessment (LCA) is used to evaluate the environmental impact of a product throughout its life cycle (Guinée et al., 2002). Milk production by dairy cattle depends on many inputs, so the LCA method is justified to assess the environmental burden of milk production (Thomassen and de Boer, 2005 and Dalgaard et al., 2006).
An LCA of milk production on dairy farms gives us insight into the environmental domain of sustainability or the “planet” pillar. Preferably, however, more than one domain of sustainability should be addressed (Glavič and Lukman, 2007, Ness et al., 2007 and Van Passel et al., 2007). Production of milk is not sustainable without economically viable farms or the “profit” pillar (Van Passel et al., 2004). An understanding of the relation between economic viability and environmental impact of milk production, therefore, is a prerequisite for a better insight into sustainability and to contribute to decision making (Norris, 2001 and Mouron et al., 2006). To understand this relation, the relation between economic viability (i.e. economic performance) and environmental impact (i.e. environmental performance) of dairy farms needs to be assessed. Such an assessment requires a relatively large number of dairy farms. Most LCA studies of milk production, however, are based on a limited number of farms, because data collection is time-consuming (Cederberg, 1998, Cederberg and Flysjö, 2004, Casey and Holden, 2005 and Thomassen et al., 2008a). Performing an LCA of milk production for a large number of farms enables us to differentiate results among farms and to study the relation between their environmental and economic performance and their underlying characteristics.
The Farm Accountancy Data Network (FADN) of the Agricultural Research Institute in the Netherlands enabled us to perform an LCA and an economic analysis of milk production for a large number of individual farms (FADN, 2007). The objectives of this study, therefore, were to quantify the relation between the environmental and economic performance of FADN dairy farms, and to identify which farm characteristics influence this relation.
This study demonstrated that high labour productivity on dairy farms was associated with low on-farm energy use, total and on-farm land use, total and on-farm global warming potential, and total and off-farm acidification potential per kg FPCM. High labour productivity, however, was associated also with high on-farm eutrophication and acidification potential per hectare. High labour productivity, therefore, was related not only to low environmental impact of global issues, such as energy use, land use and climate change, but also to high environmental impact of local issues such as eutrophication and acidification. Farm characteristics that influenced these relations between environmental and economic indicators were milk production per ha, annual milk production per cow, farm size and purchased concentrates per 100 kg FPCM. An increase in annual milk production per cow, for example, not only increased labour productivity, reduced energy use and global warming potential per kg FPCM but also, in the case of an unchanged stocking density, increased eutrophication and acidification per ha. To be economically and environmentally sustainable, therefore, animal production in the Netherlands should focus on high animal productivity, i.e. high annual milk production per cow and efficient use of feed per kg milk, and moderate stocking density, provided that a good animal welfare standard is guaranteed.
