Relationship between Farm Management, Nitrogen Surplus, Nitrate Concentrations and Economic Performance of Dutch Dairy Farms on Sandy Soils
Wageningen University and Research, Agricultural Economics Research Institute (LEI)
The production process of milk on a dairy farm is inevitably associated with losses of nitrogen (N) to the environment. These losses can compromise the quality of groundwater and surface water. Actual losses of nitrogen in the field are determined by many factors in which the management decisions of the farmer play a decisive role. In the Dutch Minerals Policy Monitoring Program (LMM), data are collected on both farm management and water quality at farm level. During the period of 1991-2006 this program has collected data for approximately 250 dairy farms (1500 year measurements) in the sandy region. In the current study, linear regression analysis was used to study to what extent nitrogen surpluses and nitrate concentrations on dairy farms in the sandy region of the LMM program are affected by differences in farm management. Also the relation with the economic performance of the farms was investigated. The results of the study are summarized in Table 1. This table gives the effect of all farm management characteristics that were included in the Fixed Effects regression model for the explanation of the variation in nitrogen surpluses and nitrate concentrations. The FE model uses the variation within the firms. The results show that farm management explains 67 percent of the variation in nitrogen surpluses. Decreasing the fertilization level, both in terms of organic and artificial fertilizer and increasing the yield of fodder crops have the largest effects on the nitrogen surplus. For nitrate concentration 51 percent of the variation could be explained by farm management. Reducing the fertilization level on grassland (especially artificial fertilizer) had a significant effect on the nitrate concentrations but also other management characteristics such as the percentage of land that is used as grassland, the milk production level per cow, the percentage of grassland that is mowed, the concentrate use per kg milk produced and the manure storage capacity (expressed in months) affected nitrate concentrations. Management practices that increase the efficiency of manure, either by reducing the fertilization level or by increasing the yield of the fodder crops, appear to be not only environmentally attractive but also economically, as the effects on economic performance have the same direction.