Words by Richard Rennie
Taking the term “sustainable” and making it a genuine underpinning goal of a farm operation is far easier said than done. But Canterbury farm company Align Group has built the term into the operation’s very foundations and continues to reinforce what it really means to “walk the walk” when it comes to defining sustainability.
Align Farms was founded by ex-pat John Buchanan who after enjoying success in the United States IT industry, wanted to establish a farming operation that captured his family’s sustainable ethos.
Today the operation comprises four dairy units and a dry-stock operation totalling 1,500ha throughout? central Canterbury, employing 27 people and generating 1.73 million kg of milk solids. It brings a vision that could set a new pathway for the industry as a whole, as it balances sustainability alongside profitability.
Chief Executive Rhys Roberts oversees the operation and talks frequently about the company’s “triple bottom line” approach – it is a term heard more often from the captains of large corporates where social, economic and environmental metrics are all given equal status on the company’s balance sheet.
Rhys says Align’s owner’s vision has been driven by a desire to create a more resilient platform to farm upon in an increasingly volatile trading, regulatory and climatic environment.
“John wanted a dairy business that shared some of his IT industry capability, one that was able to move quickly, to be able to pivot in a new direction the way you do if you are orienteering, for example.
“It was something he saw lacking in the sector, and frustrated by decisions seeming to take so long to be fulfilled.”
The focus by New Zealand farmers on simplifying their farm systems has been well intended, but along the way farmers have become more dislocated from distant consumers and less inclined to consider themselves food producers.
“Our philosophy at Align has been to view ourselves as food producers first and foremost. There is not a lot more cost to come out of our conventional system, so we look up the value chain now at how we can earn more of a premium as a quality and safe food producer.”
This has been reflected in Align opting to supply Westland Dairy and Synlait, initially dividing production between a corporate model and a co-op model prior to Westland being sold.
The move up the line from conventional to A2 milk along with the Lead with Pride programme has seen the premium on Align’s milk move from 8c/kg MS to 25c.
“It does put pressure on our farm managers, but it also reinforces good behaviour.”
Those value-add returns are starting to resonate as the dairy sector begins to recognise the value of cash flow over capital land value, particularly as those land values start to tick down off their historical highs.
“The cost of capital to enter dairying became quite inflated, and now we are required to look harder at cashflow as an industry, while the cost of debt is lower than ever.
It means farms are now capable of pulling double digit returns. With Covid-19 hitting commercial property hard, if dairy can even pull 5-7% returns the sector is looking sounder than most.”
The cash flow focus and lower asset values may also help keep dairy a viable option for the next generation to re-engage, after being put off by the high entry costs.
“There is no point in being a leader if no-one is following. There is a need to have the Mum and Dad farms here too, and able to participate.”
Incorporating a more sustainable dairying model into that economic reality has prompted Align to look at regenerative agricultural practices and how they may not only be lighter on the environment, but possibly deliver value-add gains in the future.
As a system less prescriptive than organics, regenerative farming focuses on minimal soil disturbance, maximum crop/plant diversity and retaining soil coverage all year.
The regenerative school of farming is gaining increasing attention through out? New Zealand and the world, with Canterbury’s varied farming systems making the region something of a hot bed for trials and exchange of ideas between farming converts.
Rhys counts Irwell farmer Simon Osborne and his team among those he looks to for ideas and feedback. Simon has been increasingly committed to a regenerative approach on his family’s arable property over the past 30 years, and has become a leading proponent for the practice.
The move to regenerative systems at Align is being led by the company committing to a regenerative trial, putting two of the company farms, Align Clareview and Align Longfield along with the dry-stock block Hinterlands into the trial.
The transitioning dairy farms will be run half conventionally and half regeneratively for comparison, with data collated on environment, animal health, finances, social impact on staff and community and human health impacts in terms of the food quality of milk collected.
Clareview has begun its transition, with 20% of the grazed area converted to regenerative type paddocks, with 50% done by September. By the 2022-23 season the farm will be entirely regenerative.
Longfield aims to be 40% converted by the end of next season and be 100% regenerative by the 2023-24 season.
The trials became something of a “next step” after Align reviewed its use of synthetic nitrogen a year ago.
“We were considering four ways we could reduce our nitrogen losses. They were spending over $1.0 million on herd sheds, changing irrigation from spray to pivot, dropping the stocking rate, or dropping our synthetic nitrogen inputs.
Of the four, the last delivered the best outcomes per dollar saved.”
Setting out they managed to reduce nitrogen inputs by 42% with no detrimental loss of dry matter production and achieve a 30% reduction in nitrogen losses off the farms, putting average N losses at 47kgN/hectare.
Today nitrogen is applied in smaller application amounts, as a liquid and often with a sulphur component.
“After this exercise it seemed natural to look further along at what we could do to further reduce the farms’ environmental footprint, and how regenerative farming could fit there.”
However, he says Align has not approached regenerative farming with romantic rose-tinted glasses on, and the trial highlights the quantitative approach to putting numbers behind the practices.
“We have to remember, we are sitting on fertile, well-watered quality Canterbury land worth around $50,000 a hectare. Anything we did has to keep that in mind, it is not poorer dryland that struggles to produce 800kg milk solids a hectare a year.
We do know we have to get better at how we build the soils in Canterbury, but on the flipside we can make these changes without a major shift. The value of the land means we have to be mindful of returns.”
To compare the conventional model to the regenerative one, Align will establish base line “conventional” values for all five farms. This will be an average of the four previous seasons, and include the usual range of farm metrics.
“This will allow us to easily quantify the differences between the regenerative and conventional model, while also taking into account any seasonal variation,” says Rhys.
Regardless of the trial outcomes he believes the trial data will be invaluable in putting some numbers around regenerative practices which until now have had much anecdotal support.
An initial regenerative pasture kicks off with a “soil primer” crop comprising 15-25 different plant species including beans, vetch, radish, peas and even sunflowers in the mix. With several strong tap root plants in the mix, those roots punch through the soil profile, opening up the profile and boosting micro-organism activity.
“From that crop we get about 11t of dry matter a hectare then graze about 30%, a third is trampled in and a third is left. From there we will leave the soil covered and direct drill in a perennial grass with some more diverse species in there too.”
The primer mix brings a number of additional benefits. Removing the monocultural rye-clover mix introduces a wider habitat for insects, particularly bees, and the high cover lowers soil surface temperatures, while deep root activity helps encourage more earthworm activity.
Plantain is one of the key grasses planted, and has been identified as a means to help dairy lower its nitrogen losses. When it comprises about a third of the pasture sward it is capable of absorbing nitrogen lost in cow urine, and also acts as a diuretic diluting cow urine.
“The cows definitely drink more when they are eating plantain. It will not be the silver bullet, but it is one of the tools we know we have.”
The varied plant types also mean more feed can be pushed into the shoulder months of production and away from the usual spring peak traditional ryegrass and clover deliver.
“Getting away from that traditional grass-clover means we can manipulate the feed supply. If we can move two tonne of dry matter out of November and into (say) May, that can be 600t of dry-matter across the farm we don’t have to deliver as a supplement.”
Nitrogen will be completely removed from the regenerative system, replaced by fish fertiliser and effective micro-organisms, whilst trampled pasture is recycled and feeds the soil biology. Glyphosate use will also play a lesser role in the regenerative systems, with quantities halved.
Alongside the environmental focus of the regenerative trial, Rhys is also working with owners and staff to develop better ways to deploy staff talent, and tap into the potential of the community around the farms.
“We know that to complete 2,500 hours in a year it takes about 3,500 hours to do it and that does limit the ability of staff to participate in the community – if we can offer eight straight hours in 8 hours, then those staff can more easily go and do things off the farm.”
To enable greater flexibility Align is developing a roster app where staff can choose the time they wish to work, “as long as it is no more than six days on, and no greater than two consecutive shifts per day.”
The Farm Manager can place an open roster up on the app for staff to view and choose their times on.
Rhys also sees the opportunity to open the farms’ employment opportunity to the wider community.
“Within 2km of our properties we would have 13 people capable of participating because they can milk, and this means we can give them the chance to have some employment.”
At a time the region could be facing greater unemployment and he sees it as a valuable opportunity to engage with capable locals keen to pick up some hours. This concept would also work when under employment is an issue as it allows people to have additional hours along side their core job.
“We employ 26 people now, but we may be able to go to a pool of 35.”
Along with the app Rhys and the team are also focusing on better data collection across the farms.
“The beauty of dairying is that there is so much data you can generate. It is a case of being able to hand over to whoever may replace me with all the information they need, along with a team that is healthy and happy.”
After some tough years with topsy-turvy pay-outs Rhys sees Align in a consolidation phase, continuing to look up the value chain, rather than growing bigger.
“We believe there is the opportunity there for dairying, and indeed all New Zealand food producers to make something out of regenerative farming, possibly setting some sort of standard that everyone producing can share in.”
At a time when the entire country is looking to the primary sector to lead the way out of the economic gloom, Align aims for a sustainable, profitable dairy model promising to do much to inspire fellow farmers, and assure the New Zealand public dairying has a role in that recovery.
Regen’ a flexible approach to farm health
Regenerative farming systems have become something of a buzzword lately in agricultural circles, but are often based on well-established principles that take a holistic “whole of farm” view on how land is managed.
Plant & Food Research scientist Trish Fraser based at Lincoln is intrigued by the profile regenerative practices have gained in recent years, viewing it as by no means an extreme movement.
“In part it promotes more of an uptake of principles many scientists have been trying to advocate for a number of years. This includes reduced tillage, increasing biodiversity and growing cover crops to protect top soil.”
She agrees regenerative agriculture’s appeal lies in its less prescriptive nature, compared to organic systems which have certain standards around sourcing supplies, feed and inputs that can be hard for some dynamic farming systems like dairying to always comply with 100%.
“I think people are probably more likely to try regenerative techniques because of that need to jump in boots in all to the organic realm.”
She says the last 50 years of conventional farming has had a large focus on soils’ chemical side, matching the chemicals lost by re-injecting them back in as fertilisers.
The biological and physical aspects of soil have received much less emphasis but are also very important to overall soil and plant health, she says.
“The physical side is probably the hardest to understand, but farmers need to get a spade out to have a good look and understand how the soil’s physical quality changes over time, to understand the impact that their management practices can have on soil properties.”
She believes a lot of farmers have already moved their practices some way from where they were 10-15 years ago, reducing intensity and number of cultivation passes over than time.