The potential cost to New Zealand dairy farmers from the introduction of nitrate-based stocking rate restrictions

Introducing a stocking rate restriction is one possible course of action for regulators to improve water quality where it is affected by nitrate pollution. To determine the impact of a stocking rate restriction on a range of New Zealand dairy farms, a whole-farm model was optimised with and without a maximum stocking rate of 2.5 cows per hectare. Three farm systems, which differ by their level of feed-related capital, were examined for the changes to the optimal stocking rate and optimal level of animal milk production genetics when utility was maximised. The whole-farm model was optimised through the use of an evolutionary algorithm called differential evolution. The introduction of a stocking rate restriction would have a very large impact on the optimally organised high feed-related capital farm systems, reducing their certainty equivalent by almost half. However, there was no impact on the certainty equivalent of low feed-related capital systems