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CHAPTER 2: EMPIRICAL FRAMEWORK
Chapter 1 presented a brief introduction to both conventional and rotational grazing systems and the potential GHG reductions from a conversion to rotational grazing. This chapter details these topics, with an emphasis on potential profitability changes between conventional and rotational grazing systems, including an explanation of on-farm GHG sources. Chapter 2 will conclude with an explanation of potential measurement issues when calculating changes in farm-level GHGs.
Aspects of Grazing
Forage Quality: Forage quality is important to grazing systems because it determines the amount of total digestible nutrition (TDN) the animals receive. Quality forages reflected in the nutrition value allow the animals to grow, reproduce, and produce marketable products. If forages are of poor quality, then the farm operator is forced either to buy and sell cattle seasonally to balance the stocking rate and carrying capacity of the farm or to supplement the farm-grown forages with purchased feeds (Faulkner, 2000, Pratt,1993). Forcing seasonal buying and selling decisions can be impractical, inefficient, and can limit the farm operator’s options and opportunities to profitably manage the farm business. Purchasing feeds to supplement poor quality forages allows the farm operator to keep animals year-round, but can be costly and reduce the farm’s profitability.
A conventional grazing system has a greater chance for reduced pasture forage quality than a rotational grazing system. This is due to the fact that “cows are gourmets” and graze selectively, eating the best plants and plant parts first as these are the most nutritious (Pratt, 1993). In single-field conventional systems, cows will graze regrowth, or new growth of plants already grazed, as soon as it is available because this regrowth is highly nutritious. However, there is often not enough of the regrowth to provide adequate nutrition for all animals and herd performance may decline as animals graze less nutritious plants. A rotational grazing system reduces the incidence of regrazing because the animals are rotated to another paddock to feed on fresher, higher quality forage before regrazing occurs. This allows for the animals on average to graze high quality forages throughout the growing season (Pratt, 1993).
The potential benefits of rotational grazing, higher quality and quantities of forages, can lead to increased revenues and reduced costs from adoption of rotational grazing. Revenues may increase because of possible higher productivity under rotational grazing when compared to a conventional system due to greater production of higher quality forages. Production costs may also decline under a rotational system when compared to a conventional system because the higher quality and quantity of forages can reduce the amount of purchased feed needed for supplement or total animal carrying capacity can be increased (Fales et al, 1995).
Harvest Efficiency: Harvest efficiency is the amount of the standing forage crop which is harvested (grazed) by the animals. If the harvest efficiency of the grazing land is too low, it can result in the selective grazing and regrazing of certain spots by the animal and a reduction in overall forage quality, as discussed above (Faulkner, 2000). Low harvest efficiency can also lead to poor manure distribution, an increase in the prevalence of weeds in the pasture, and the need for machine harvesting for hay or frequent clippings. However, if harvest efficiency is too high, overgrazing occurs. Overgrazing is detrimental to forage stand longevity and productivity with the possibility of reduced herd health and performance (Faulkner, 2000, Fales et al, 1995).
Management of conventional grazing systems to achieve optimal harvest efficiency is difficult as herd size is either too small or too large as the quality and quantity of forages change during the grazing season. Rotational grazing has the potential to alleviate this problem because harvest efficiency is managed via the grazing system design with animal numbers and paddock size regulated to provide adequate nutrition for each animal group (Faulkner, 2000).
Harvest efficiency under rotational grazing presents the potential for both increased revenues and decreased costs when compared to a conventional grazing system. There are two potential increased costs when harvest efficiency is operating at a non-optimal level. First, poor manure distribution over the pasture requires additional fertilizer applications to compensate for excess deposition of nutrients around shade and water sources. Second, increased incidence of weeds in the pasture require use of chemical and mechanical control, leading to potentially increased costs. When harvest efficiency exceeds optimal levels (overgrazing) the health of the animals (loss of weight or reduced rates of gain) and pastures (weed invasion and stand survival) can decline. The impacts of overgrazing are higher costs for purchased feeds, lower product sales, and/or increased incidence of pasture renovations (Faulkner, 2000, Pratt, 1993, Fales et al, 1995).
Water Supply: Water is the most important animal nutrient and distance animals must travel to water plays an important role in animal performance. The further an animal must travel to water the less time and energy there is for grazing to support animal growth and maintenance. Distance to water may also affect the quality of forages and harvest efficiency, as areas of pasture located farther away from water sources will be less utilized, thus moving the plants out of optimum growth stage and lessening their TDN level as well as creating an area of low harvest efficiency (Faulkner, 2000, Beetz, 2002). Location of water sources can affect manure distribution patterns (Beetz, 2002, Faulkner, 2000). Direct access to streams may also increase the potential for footrot (Faulkner, 2000).
Many conventional systems have relatively few water sources, with some of these sources being direct access to streams. In contrast, rotational grazing systems provide a greater number of water sources and higher quality water to each of the paddocks limiting the distance animals must travel. Improved water distribution allows for better forage utilization and manure distribution under rotational grazing than conventional grazing (Faulkner, 2000).
Both potential revenue and cost changes can be seen when comparing animal watering systems under conventional and rotational systems. Revenues have the potential to increase as increased availability of water leads to better forage utilization, improved harvest efficiency and less energy requirements for travel time (Faulkner, 2000, Boyer, 2002, Goldwasser, 2002, Dalton, 2002). Conventional and rotational systems have unique costs. Potential increased costs for conventional versus rotational systems include potential increased medical costs associated with decreased herd health from stream access and increased fertilization costs from inconsistent manure spreading, as was mentioned above (Faulkner, 2000, Dalton, 2002, Beetz, 2002). A rotational grazing system has the additional costs of building and maintaining a more sophisticated watering system (Faulkner, 2000, Dalton, 2002, Goldwasser, 2002, Beetz, 2002). Such a cost may offset the potential reduction in costs associated with conventional grazing.
Pasture Rest Periods: Rotational grazing systems rely on pasture rest periods between grazing to allow plants to regenerate without immediately being regrazed by animals. The grazing and rest periods are managed by species and season to maintain plants in an actively growing state providing high quality and quantity forages (Faulkner, 2000, Fales et al, 1995).
Conventional systems have the potential to have inconsistent pasture rest periods, as animals may choose to graze and regraze certain areas, as discussed above, without grazing other areas of the pasture. Rotational grazing has the potential to reduce these inconsistencies, as pasture rest periods are part of the management strategy (Faulkner, 2000, Fales et al, 1995).
Labor Costs: Labor costs include labor to collect and handle animals for sale, artificial insemination, pregnancy checking, or treatment of health concerns (Faulkner, 2000). Labor costs under a rotational system have the potential to be lower than under a conventional system. However, the literature is inconclusive. Animals under a rotational system are trained to move to new paddocks and are easier to handle and require less total labor. Two case study farm operators suggest their labor demands declined with adoption (Boyer, 2002, Goldwasser, 2002).
Economic Studies
A number of different studies have been done on the profitability of grazing systems. Most of these studies are on pasture-based dairy production, with only a few studies undertaken thus far on pasture-based beef production. Early studies were based mainly on a small number of farms in the northeast U.S. (Emmick and Toomer, 1991, Parker et al, 1991) . These studies focused on cost comparisons and demonstrated that farmers adopting pasture-based dairy production could, in a short time frame and under ideal management, generate reasonable farm incomes. More recently, the New York Farm Management Business Summary (Knoblauch et al, 1999, 2002, and Conneman et al, 1997) showed that grazing dairies can be as profitable or unprofitable as conventional dairy operations. A study undertaken in Wisconsin in 1991- 92 reported that rotational grazing produced net income of an average of $64 more per cow, despite the fact that cows in a conventional dairy produced 7% more milk (Rust et al, 1995). Lower costs of feeding, facilities, equipment, and labor were the cause of the increase. A later survey of conventional- and rotational-based Wisconsin dairy farms reported that the rotational grazing farms had lower levels of net farm income, but higher economic returns to equity (Jackson-Smith et al., 1996). This conclusion excluded the cost of family labor.
Similarly, rotationally grazed beef operations can be just as, if not more, profitable than conventionally grazed beef operations. A Canadian study demonstrated that rotational cow-calf production had little change in animal performance and substantial benefit in both efficiency of land use and economic performance (Phillip et al, 2001). D’Souza et al (1990) demonstrated that the extended grazing periods associated with rotational grazing can be more profitable for cow/calf farms than traditional conventional grazing systems. A Virginia study of both stocker and cow/calf operations demonstrated that the additional revenues and reduced costs associated with rotational grazing systems have the potential to outweigh the costs of conversion from a conventional to a rotational grazing system (Faulkner, 2000).
On-Farm GHGs
Rotational grazing has the potential to reduce GHG emissions and provide financial returns to farmers through the sale of GHG emission reduction credits. The aspects of rotational grazing discussed above allow this type of management system to have potential GHG benefits as well as potential financial ones. The main GHGs of interest to livestock producers are methane, nitrous oxide, and carbon dioxide. Farmers who demonstrate reductions in these GHGs create possible GHG credits which can be sold as an alternate source of farm income.
Methane: Methane is emitted from two sources in livestock production, enteric fermentation and the breakdown of animal wastes (IPCC, 2001). Enteric fermentation is the process of microbial digestion of forage in the rumen of cows (Van Nevel and Demeyer, 1996). Microbes in the rumen break down the ingested forage allowing animals to obtain nutrients from plants not readily digestible by monogastrics. Animal-emitted methane is a by-product of this process. Rotational grazing has the potential to reduce methane emissions from the animal by increasing quality of the forage consumed (Faulkner, 2000, Pratt, 1993, Fales et al, 1995). This increase in quality will reduce the amount of enteric fermentation, since there will be less microbial breakdown needed per unit of nutrient. Rotational grazing also reduces the distance that animals have to travel for food and water, reducing total energy required for maintenance.
Methane emitted from the breakdown of animal wastes is a similar process to enteric fermentation. Microbes break down the collected animal waste, and emit methane as a by-product of this breakdown (IPCC, 2001). Increased forage quality also helps to alleviate some of the methane emission, since higher forage quality leads to better digestion and less waste emitted from the animal.
Nitrous Oxide: There are three main sources of nitrous oxide emissions. First, nitrous oxide is emitted from the breakdown of animal wastes, second by direct nitrous oxide emissions from agricultural soils, and third indirect nitrous oxide emissions from agricultural soils (IPCC, 2001). Nitrous oxide emitted from the breakdown of animal wastes includes only the nitrous oxide emitted during the storage and treatment of animal wastes. Emissions from manure applied to the land as fertilizer is included in the direct nitrous oxide emitted from agricultural soils.
Nitrous oxide is emitted from the breakdown of animal wastes in much the same way as methane (IPCC, 2001). Microbes break down the animal wastes and nitrous oxide is emitted as a by-product. As with methane, a higher nutrient content in the forage can reduce the amount of waste, and, thus, the amount of breakdown.
Direct nitrous oxide emitted from agricultural soils is a result of natural microbial nitrification and denitrification processes (IPCC, 2001). The agricultural activities of fertilization and manure spreading add nitrogen to soils, increasing the amount of nitrogen available for these processes, and ultimately the amount of nitrous oxide emitted. Rotational grazing has the potential to reduce direct nitrous oxide emissions from agricultural soils by increasing forage quality and stand health. Improved forage quality improves nutrient cycling and storage in soil pools (Barnes et al, 1995). Improved nutrient cycling helps to minimize nutrient loss. This reduces the need for additional fertilization of grazing lands. This reduction would reduce the amount of nitrogen available for nitrification and denitrification processes, reducing nitrous oxide emissions.
Agricultural soils emit indirect nitrous oxide from two sources. The first of these is the leaching and runoff of applied nitrogen into aquatic systems. The second is the atmospheric volatilization and subsequent deposition of applied nitrogen which fertilizes soils and waters (IPCC, 2001). Each of these indirect sources produces nitrous oxide by enhancing biogenic nitrous oxide formation. Rotational grazing has the potential to decrease indirect nitrous oxide emissions from agricultural soils in the same fashion as direct nitrous oxide emissions. The increased forage quality and stand health reduce the need for nitrogen application (Barnes et al, 1995), thus reducing the amount of nitrogen which could leach or run off into waterways or volatilize and be redeposited.
Carbon Dioxide : Carbon dioxide is used in the photosynthetic processes allowing plants to create energy for maintenance and reproduction (Solomon et al, 1999). Carbon dioxide is taken in by the leaves of plants and is converted to carbon and oxygen. The plant transfers the carbon to its roots, while the oxygen is released as a by-product of the process. Carbon is then expelled by the roots into the soil and is sequestered rather than emitted for the farm (Solomon et al, 1999, Franzlubbers and Stuedemann, 2002, Schuman et al, 2001). Rotational grazing enhances the sequestration process by keeping the forage stand closer to its optimal growth stage (Pratt, 1993). Rotation grazed forages lead to higher total output yielding an increased potential amount of carbon sequestered.
Currently, most studies on GHG reduction in rotational grazing systems only address the increase in carbon sequestered (Franzluebbers and Stuedemann, 2002, Schuman et al, 2001, Campbell et al, 2001, Kimble et al, 2001). Each of these studies conclude that there is the potential for an increase in the amount of carbon sequestered by a rotational grazing system, but both the degree of sequestration and the level of measurement vary. Some studies, such as Franzluebbers and Stuedemann (2002) and Schuman et al (2001) include all carbon in the plants and root systems as well as in the soils, whereas Campbell et al (2001) and Kimble et al (2001) only include the carbon in the soil itself. Only a very few studies have been found which evaluated reductions in methane and nitrous oxide (Wittenberg and Boadi, 2001). These studies conclude that there is the potential for decreases in methane and nitrous oxide emissions from rotational grazing, but no rates of reduction are given.
GHG reductions from rotational grazing have the potential to increase income for the farm operator, but for this to take place, the change in on-farm GHG emissions must be quantified and measured. Issues associated with measurement are discussed below.
Measurement of Changes in GHG Emissions
Identifying the changes in GHG emissions from a change in farm operations requires comparing the current farm situation (with rotational grazing) against a reference condition called baseline. The net change in GHG emissions — the difference between the farm operating under rotational grazing and the baseline — is called additionality. Thus, it is assumed that the farmer would receive payment only for the additional GHG reductions made beyond the reference condition.
Currently, there exists no one specific standard by which baselines, and consequently additionality, are defined, for agriculture and forestry projects, nor for projects in the energy and transportation sectors (Chomitz, 2002; Laurikka, 2002; Moura-Costa and Stuart, 1999; Tipper and De Jong, 1998). While there exists no clear standard or means of defining baselines for land-based and sequestration projects (activities without explicit legal requirements to control discharges), three general approaches may be used for defining the reference condition – historical, business-as-usual, and a sectoral performance baseline.
An historical baseline would estimate GHG emissions from a particular farm at some predetermined historical date – either at some fixed reference year (e.g. 1990) or the time period just prior to the adoption of the GHG reducing practice. In this study, the historical baseline is taken as the time period just prior to the adoption of the rotational grazing system. Baselines could be established based on alternative developments that may occur at the farm level in the absence of the GHG-reducing practice. Such a reference condition, called here a “business- as-usual” or BAU baseline, is defined by how much GHG emissions are released from the farm operations in absence of the GHG-reducing practice (the BAU could be called a “counter-factual” baseline). The BAU baseline need not be the same as the historical baseline because farm operations may change over time. Finally, baselines could be defined with respect to a regional or industry specific performance standard, or a sectoral performance baseline. A sectoral baseline is analogous to establishing a minimum performance standard for particular industries or technologies. For example, air and water regulatory programs define minimum emission standards based on “best available control technology” (BACT) or reasonably achieved control technology (RACT). This study develops a regional GHG performance standard for well managed conventional beef and dairy grazing operations in a mid-Atlantic climatic zone.
Each of the three possible reference conditions can be calculated using different GHG accounting metrics (Groenenberg and Blok, 2002). At least two different accounting metrics could be use to calculate GHG emissions. GHG emissions can be calculated in terms of total emissions per unit of land (or per management entity). For instance, if a 200-acre farm implemented a system of intensive rotational grazing on 75 acres, total GHG emissions would be estimated for the entire land base under the control of the farm operator. Using a land-based metric, additionality would be calculated on tons per acre of land basis. Alternatively, GHG emissions could be calculated per unit of product.
For instance, a beef cattle operation may generate X pounds GHG per animal unit (or unit of product) produced as a baseline and Y pounds of GHG per animal unit with intensive rotational grazing. Additionality could be calculated as the difference in emissions per animal unit times the number of units of product after instituting the infrastructure and management changes.
Rotational grazing appears to have the potential to both increase production profitability for cattle farm operations and offer an additional stream of income for these operations through payment for GHG reductions. A test of these hypotheses will be undertaken based on three case study farms in the mid Atlantic region. Chapter 3 lays out the procedures for how this test will be carried out.
Chapter 1: An Introduction to Rotational Grazing
1.1 Introduction
1.2 Problem Statement
1.3 Objectives
1.4 Organization of Thesis
Chapter 2: Empirical Framework
2.1 Aspects of Grazing
2.2 Economic Studies
2.3 On-Farm GHGs
2.4 Measurement of Changes in GHG Emissions
Chapter 3: Procedures
3.1 Case Study Farms
3.2 Cost-of-Production Budgets
3.3 Selection of Baselines
3.4 Calculation of Potential Net Returns from GHG Reduction Services
Chapter 4: Results of the Analysis
4.1 Cow-Calf Case Study Farm Results
4.2 Stocker Case Study Farm Results
4.3 Dairy Case Study Farm Results
Chapter 5: Summary and Conclusions
5.1 Summary of Results
5.2 Policy Implications
5.3 Areas of Future Research
Appendix
Bibliography
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