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Keith Woodford discusses how composting barns can provide solutions for New Zealand dairy

Keith Woodford discusses how composting barns can provide solutions for New Zealand dairy

By Keith Woodford*

There is increasing recognition that 24/7 paddock wintering of cows is not the way forward for New Zealand dairy. The challenge is to find solutions. These solutions need to achieve good environmental management, they need to be animal friendly, and they also need to make economic sense.

Over recent months I have been on a personal journey of learning about composting barns. That journey is ongoing and I have more to learn. But I am now at a point where I am confident that composting barns can be a major part of the strategic solution for New Zealand dairy. They can be win-win-win for the environment, for animals, and for profitability. 

There is one important qualification to the above statement. It is that none of us yet have all of the answers for New Zealand conditions. Also, there is evidence that some farmers are going into composting barns with a poor understanding of the critical factors for success.

With a composting barn, if things go wrong they can go really wrong. In that situation, what should be sweet smelling, dry and warm compost, which cows love to lie in, turns to smelly sludge. At that point, it is ‘out with the sludge’, and back to square one. But if the basic design of the shed is wrong, things will go wrong again.

 If working well, the compost stays in the barn for 12 months. It then gets taken out, left for some further decomposition, and used as valuable fertiliser.

For success, the key requirement is to first get the infrastructure right, and then manage the barn so as to maintain an environment that favours aerobic bacteria (the good fellows) rather than anaerobic bacteria (the bad fellows).  

The distinguishing concept of a composting barn is that composting occurs in situ. The cows roam freely in the barn and lie on a mix of wood chips and straw, with the wood-chip component being critical. 

It would be nice if the cows could be toilet trained but they can’t. So, the cows defecate and urinate directly into their beds. However, as long as there is adequate ventilation combined with daily mechanical aeration, then the beds remain dry, warm and sweet smelling. 

Composting barns are not new, but it is only in the last few years that the requirements to make the system work have become better understood.

The first time I took much notice of composting barns was close on ten years ago, when I heard that Fonterra had constructed some at Hangu, the first of their China farms. From all accounts, it was less than successful. For their subsequent farms at Yutian and also at the third hub, they have gone to the tried and tested American free-stall system. It is to Yutian, rather than Hangu, where they take visitors who are lucky enough to be allowed to visit their China farms.

Knowing something of the problems at Hangu, I subsequently cautioned an international corporate client of mine in another part of the world from building composting barns. I remain cautious in relation to dairy corprorates going that way until more experience is gained, because of the need for hands-on monitoring and early recognition if something is not quite right.  

Of course, that proviso of hands-on monitoring is relevant to any farm. It needs someone on-site who is passionate about making it work. A probe thermometer and moisture meter should be basic tools.

The key event that set me on the composting journey was a visit in May of this year to two composting barns in Oregon, separately owned by the Cowan and Bennett families. I was there in Oregon with a team from construction company Calder Stewart and our main focus was to learn  about hybrid systems that combine barns with grazing. But as so often on such trips, the key insights came out of left field. In this case it was composting barns.

Bennett composting barn in high-rainfall Western Oregon

What I saw there were two barns that were working well. At the Bennetts farm, I saw robot-milked cows that had a post-milking choice of whether they went to a free-stall barn or a composting barn. Most were going to the composting barn.  The compost was dry and sweet smelling and the cows were clean. The Bennetts described how their replacement rates and somatic cell counts had both dropped since building the compost barn. 

On returning to New Zealand, I started talking to Waikato-based consultants Sue Macky and Bryan McKay about their experiences with composting barns. Bryan quickly pointed out to me that it was better to talk about ‘composting barns’ rather than ‘compost barns’. This is to reduce confusion between these and other systems where the cow poo and urine are collected, with the liquid then squeezed out, and the dry poo then used as cow bedding. 

I have seen this second system working very well in the Netherlands in association with free-stall barns, and it too has potential here in New Zealand. However, it is fundamentally different to in-situ composting which is the focus of this article.

So, to avoid confusion I now use the term ‘composting’, but note much of the overseas literature still calls them ‘compost’ barns.

Sue Macky subsequently introduced me Tony Allcock who is one of her Waikato-based clients. Tony farms with his wife Fran and son Lucas, and they are now into the fourth year with a composting barn. 

I arrived at the Allcock farm with cold feet on a miserable wet winter day, but after standing in the barn for a few minutes my feet warmed up nicely. That is what happens in a composting barn which is working properly.

The Allcocks’ barn is designed so that liquid can flow out of the compost and into the dairy effluent management system. In practice, there is no liquid; it all evaporates away. 

I am aware of other barns where either the liquid does not evaporate, or where it evaporates but then descends in a condensation rain event. It is all about getting the design right.

Shifting to a composting barn has required a fundamental shift of farming system for the Allcocks. They have moved from a typical NZ grazing system to one where the cows spend part of every day in the barn and part grazing outside.

The Allcock Waikato composting barn, freshly aerated, with cows about to return from grazing

Under the old system, the production varied between 88,000 and 99,000 kg milksolids per year. Since making the change, production was 128,000 kg in the first year, 134,000 kg in the second year and 147,000 kg in the third year. The target going forward is 180,000 kg.

Nearly all of the production increase has come from higher production per cow rather than increased cow numbers. Production per cow has lifted from about 380 kg milksolids to 544 kg last year.

Tony described to me how in total they have spent $900,000 on the new system, including lots of concreting in the surrounds, and also the purchase of a feed mixer wagon and small tractor for aerating the compost. The roof structure itself is well under half the total cost.

By my calculations, the total capital spend has been $18 per additional kg of milksolids, based on last season’s production. This will drop further using this year’s increased production.

The two most important feed components are pasture and home-grown maize silage. Additional feed includes some PKE and soy, but by my calculations over 80% of the feed is produced on-farm.

I have yet to do a full economic analysis of the transition to a hybrid system comprising pasture grazing plus a composting barn. But everything I have seen so far tells me that the outcomes are triple bottom line in relation to reducing the nitrogen leaching from cow urine, being very strong on cow welfare, and also stacking up as a financial investment.

The Allcocks still farm with seasonal calving. However, 12-month milking with its increased biological feed conversion efficiency combined with off-season premiums would certainly be feasible.

In moving towards broader acceptance of composting barns, there are lots of issues to consider. Sue Macky has strong concerns that some farmers are failing to recognise the key requirements for success and in some cases are getting things horribly wrong. It can be a Kiwi trait to try and figure things out ourselves without learning from those who have gone before.   

Some of the basic mistakes relate to insufficient compost area per cow, insufficient wood chips or shavings, insufficient open wall height, insufficient roof pitch, lack of roof venting, wrong placement of drinking troughs (they should be outside the composting area), and group sizes too large.

One of the issues I am currently exploring is where all the bedding is going to come from if everybody starts building composting barns. This has potential to be the greatest constraint. On-farm coppiced poplars, or other fast-growing species such as eucalypts, might be part of the way ahead.  Industrial hemp also makes excellent bedding. Our research institutions need to step up and get involved.

*Keith Woodford is an independent consultant who holds honorary positions as Professor of Agri-Food Systems at Lincoln University and Senior Research Fellow at the Contemporary China Research Centre at Victoria University.  His articles are archived at You can contact him directly here.

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Thanks Keith -nice article

How well understood are the greenhouse gas emissions (particularly methane and nitrous oxide) from a system like this? Some farming practices that are good when looking only at N leaching to water may not stack up so well when greenhouses gasses also need to be accounted for.

It should be better on an efficiency basis, i.e less CH4 an NO2 per unit of product produced given the significant productivity improvement. It would be interesting to see the numbers though.

a system i have seen for sprouting barley for fodder, utilises the methane richer air from the barns to grow the barley 25% faster. A bit of a closed loop system .

Methane comes from burping, which is the same for a cow regardless of whether she is outside or in a barn.
While only a proportion of the urine is captured in the sawdust as the cows still spend time outside, the big game changer is removing the cows from paddocks when wet, as Overseer penalises you hard for wintering on paddocks in winter wet areas or when on porous soils.

Great article, Keith. As you say, win/win/win.

Back-of-envelope alert!

If you take the baseline production before composting at say 90K KgMS and after at 140K KgMS, then the extra 50K production, on a net-income basis of say $1.50/KgMS, means that the $900K capex is going to have a repayment period of 12 years. Not bad considering the structure's life is 30-50 years, and the plant/equipment components is 15-20. Certainly something to get enthusiastic about.

the huge problem with yr back of the envelope is that the future is not the past.

Some bigger back of the envelope stuff to ponder.....

- there are approx 500 major oil wells supplying 2/3 of all Oil
- all were in existence pre 70's, are or have peaked and are depleting at 6% per annum
- Oil pays everyones wages. Oil is the industrialized economy. Oil is transport. Oil is agriculture.
- any decline in overall energy burn squeezes economic growth....
=> we are rapidly approaching an energy cliff. A financial crisis will do it....
- hows that investment looking now .. as someone once said, are you feeling lucky punk?

Clearly Keith is not a socialist, or he would have realised that innovation and problem solving are not the solution. Tax is the solution, making people poorer and giving the money (what is left of it after government running costs are removed) to council slush funds and unaccountable iwi will obviously solve everything.

If that doesn't work, we can fund a committee to "discover" another tax is the way forward. But we can call that a levy or a surcharge so she's all good.

Clearly Keith is a socialist because he wants to calculate if there is enough wood chip for every farmer in New Zealand, demonstrating he cares about his society.
A capitalist such as my self realises the productivity gain will allow me to eliminate every other farmer and take over fonterra with chinese capital.
Crowd funded of course.

@ positivelywallstreet, maaate you forgot the "sarc" label

Maybe, or maybe parody...ironic imitation.
But a truth I hope.
The truth is that there is a generosity about the scientists and a selfishness about the capitalists.

Ralph, I took a photo of your argument.

Re levy instead of tax, it's a good time to quote our Lord and Saviour John Key, regarding one of his broken promises:

Asked what the difference was between a tax and a levy, he replied "many", and when pressed, to "Google it".

"There's a lot of technical answers, IRD can give you those answers," Key said. "I could too, but I'm not going to bother."

Tourism operators and airlines have decried the move, saying it was a breach of an agreement struck with the government in 2003.

Argument AND Labour policy.

Yes, your summary of it is yet another straw man, correct. That was the point.

Rick, I know 'straw-man' is one of your all-time favourite accusations - but - I would point out that it can only be a straw-man argument if it is not true. Now given Labour themselves have placed taxation front and centre it's bit weak to pretend they haven't.

There is also plenty of historic precedent for left wing politicians in the western world to raise and add taxes.

What you call 'straw man' in this instance is really a lack of disclosure from Labour over the exact nature of their tax plans.

Ralph, you should be able to recognise that your description of what the left-leaning parties is a clear strawman of what they actually believe:

that innovation and problem solving are not the solution. Tax is the solution, making people poorer and giving the money (what is left of it after government running costs are removed) to council slush funds and unaccountable iwi will obviously solve everything

Why bother using such an approach?

Is it too hard to actually counter arguments and positions that people actually hold, that you should instead resort to a misrepresentation of it? Why the need to resort to logical fallacies?

The only reason you might see the word straw-man appear a lot is if you're using them a lot.

"The only reason .. " I hoped for more.

Do leftist politicians have *any* history of raising taxation over the last 100- years -- why explore, think or look for answers when you can cry 'straw-man' and put your head back in the sand?

I hoped you wouldn't try to dodge around the fact you've resorted a straw man.

You said that the left believes "that innovation and problem solving are not the solution. Tax is the solution, making people poorer and giving the money (what is left of it after government running costs are removed) to council slush funds and unaccountable iwi will obviously solve everything".

How about posting a statement from anyone on the left to back that up? I.e. that they believe that innovation and problem solving are not the solution for problems, and that the actual solution is to tax people to make them poor and put the money in slush funds?

What've can you produce? Anything?

Facts can't be straw-men because facts are not false.

Leftist politicians have 100 years of history of nationalising industry, raising taxes, making levies. That is just a fact - even if you don't like it.

Unfortunately taking money off people (through *any* tax) leaves them with less money. Fact.

Less money means they will be poorer than before you took their money. Fact.

Reported Labour water policy is to tax water and give the money to iwi and councils. Fact.

Reverse the question - where is the Labour water quality policy that states they will use innovation or problem solving methods instead of taxation?

Facts are facts.

Your mis-portrayal of left-leaning parties beliefs are not facts, but are straw man fallacies.

I note you haven't posted any supporting evidence for that portrayal of left-leaning parties' beliefs. Haven't found anything?

See below. But if you think leftist politics has no history of taxation increase in the last 100 years, say so and challenge my assumption. That's a lot better than hiding behind cries of 'straw-man'. Which is no debate at all.

So you're backing away from your statement that people on the left believe

"that innovation and problem solving are not the solution. Tax is the solution, making people poorer and giving the money (what is left of it after government running costs are removed) to council slush funds and unaccountable iwi will obviously solve everything"

and are shifting to saying "look, the Left has a history of taxing more than the right and that's what I meant".

You appear to have been unable to find a leftist viewpoint to back your initial claim up, that leftists believe that.

Why didn't you just say the second in the first place (and reference it) rather than raising the silly strawman in the first place? That would seem to be a more constructive form of argument and removes the need to silly logical fallacies.

Your statement that left-leaning parties believe innovation and problem are not the solution and that the solution is to take money via tax and put it in a slush fund is shown in its absurdness by a quick google of which party is committed to R&D tax credits - neatly encapsulating both your points in one:

To argue the foundation is not to abandon the particulars, as you infer. Surely you see that theory and practice are different layers of the same thing and can be examined separately without representing any kind of abandonment?

The reason move to fundamentals was to search for your point of specific disagreement.

And if Labour can solve the problem through innovation and problem solving -- why is their policy a new tax?

P.S. When I see the word 'surely', I meant I expect you will clearly understand it did not mean in any sense you would not know or are stupid. It was not meant in any derogatory way.

No worries, Ralph. I know you're a good sort...deep down. Very, very deep ;-) I jest.

Hey, I agree we should argue the actualities and facts.

The fact Labour campaigns on a tax credit for research and development suggests they don't believe that "innovation and problem solving are not the solution" and that the solution is instead to take money off people and put it in a slush fund.

Then I hope they display the patience to let the fruit come before taxing us needlessly.

I have no faith in either council or I iwi.

"How about posting a statement from anyone on the left"

Given the history is over 100 years I held it to be a reasonably self evident read of that history.

Happy to debate that assumption if you think it is not true.

Ralph, spoken like a true National voter. Does your cynicism stretch to commenting on the "gains" National has achieved with 9 years of bugger all policies? Nationals efforts look very inept, its' hard to imagine any other party making a worse fist of it. The country has been sold out to the highest foreign bidder..... stealth neo-colonialism. When you get tired of moaning about imaginary taxes, enrol in Mandarin lessons you will need them.

You had me up till your last sentence. Do we even have any research institutions left?
Been a miserable wet spring, worse than last year even, so composting barns sound great. Our pasture utilisation is poor and feeding maize silage on the ground is throwing away money. Even if it's marginal the thought of not having to see the cows standing with their backs to the rain and hail in a muddied corner of the paddock would be blissful. Something to aspire too. Thanks.

We have been having a dream run down south redcows - it's been nice having no mud to speak of. For the first time since we started recording soil moisture levels - 6 years - we could have applied effluent irrigation almost every day over winter. We had a very dry autumn so moisture levels were low, then with below normal rainfall it kept moisture levels low. Rain up your way usually equates to no rain down our way. Do have empathy for you.
Stand off pads might be a cheaper alternative for you. I heard some regional council staff discussing compost barns recently - they aren't in favour of them becoming the norm in our region as the water moves through soil rather quickly - we have short lag times compared to the rest of the country, and all that compost has to go somewhere. In Europe the Dutch export some of their farming effluent to other countries as they don't have the capacity in their water to absorb more nutrients. You moved jobs this season - are you in the Eastern BoP?

Yea still in the eastern BOP. Have to many roots in this area to leave I guess and usually love the climate.
Yesterday the farm picked up another 20 ha lease full of grass and the suns shining it's about 20deg. Life's great today ;) .

A great report and good option, but what about the flow on effect - Great a 50% increase in farm production across NZ is all we need to crash the payout! The industry is at a cross road - lack of capital, lack of scientific knowledge as to whats really happening to the environment, lack of faith in Fonterra's ability to provide consistent payouts and returns, lack of ability (& capital) to add value to our payout, lack of understanding of the industry by most negative commentators, lack of a succession plan (where are all the young farmers/why would u want to go farming when the ways in are so limited?).

Change all these and we are in boots and all, otherwise we are fence sitting for now.

Or 50 % less land under dairy to get the same amount of production.

Industrialised dairy is not what NZ needs to become mainstream, nor what it's higher paying clients want product from.

Well said, Grumpy.

fontera need to move away from bulk raw product to add value, the problem is the owners/farmers dont want to invest any of there return for that and want return now.
maybe the way forward is to split Fonterra into two companies, the traditional Fonterra that all the farmers own that produces WMP and other raw production and the new Fonterra that others can invest in that produces add on value products to sell worldwide.
the other thing i would like to see is the law of Fonterra having to accept new producers gone, i am invested in a few farms that supply Fonterra and others and the others are doing better, its a law that is past its use by date and there is enough competition now

If NZMP (which includes the value add section of Fonterra) was split from Fonterra it would be a $6billion company - the biggest in NZ. As a farmer why on earth would I want to sell that off??

Have you only just woken up to the restrictions that Labour put on Fonterra when it was formed, sharetrader? How many of those other processors you supply are still receiving DIRA milk from Fonterra? How many of those other processors used the substantial profits made from DIRA milk to boost their payouts?

Curiosity question - do any of your investment farms supply processors that restrict or ban the use of PKE?

Sharetrader - I dont believe your method of breaking up Fonterra is the way to go but I do think Fonterra should play an active part as a major shareholder in new startups within the industry. Clearly it doesnt have the capital, IQ or people to be involved in some of the smaller opportunities but could do so by getting involved at the start as a partner e.g. A2 which has clearly added value to the original shareholdings.

A2 hasn't paid a dividend.

Did you deliberately pick on A2 as a joke? Fonterra had and then relinquished the IP rights to A2 some time ago. Fonterra really seems to hate differentiating Specialized milk products from its commodities, hence the reluctance to head down the"grass feed" path and its ditching of A2.

No joke. Grumpy referred to A2 as adding shareholder value - which it has, but it has never paid a dividend - so those investors have never received a return on their investment unless they sell their shares. So would I want Fonterra shares to continually go up but only receive a benefit from them if I sold them. No.
Commercial sensitivity in releasing data = no micro reporting.

This explains what the A2 patent situation was/is...

'Grass Fed' is part of Fonterra's 'Trusted Goodness quality seal.

A2 is a young company retaining free cash to build a strong balance sheet so no dividend is a mute point. The shareholder return on capital is just a little better than what Fonterra share has returned in the last 10 years.......

My point was that Fonterra hasnt developed a culture to take on the different or new options out there but instead focused on the easy path of building stainless steel towers and encouraging spring milk production to produce WMP. You could say their recent signals to farmers would suggest out of season milk is the way to go so they can add more value.

Grass feed is bullshit when you look at how much PKE has been used over the last few years and even at 3kg/cow/day thats still equivalent to over 20% of the average cows feed intake.

Check out the PGP programme that Fonterra has been involved in grumpy:

As a no PKE farmer, I don't necessarily disagree with you re grass fed, however one only has to look at the Dutch which pays a 'grass fed' premium so long as cows are outside 6hrs a day for 120 days a year, to realise our competition has a somewhat more lax views than we do on what constitutes 'grass fed'.

Fonterra was to focused on stainless steel and WMP, Given the huge farm investment in the South Island Conversions over the last 17 years and the fact a number of these farmers/investors had a big say in how Fonterra was run may suggest why it has focused on the easy market of WMP rather than setting up a more balanced business plan to also focus on niche markets such as A2. Fonterra is/was also seriously constrained by a lack of capital hence why WMP was an easy choice but in hindsight not the best one. If you dont like me using A2 as an example then look at Tatua and the fantastic returns theyve produced for their shareholders.

So...DIRA has not had a part to play in forcing Fonterra to build more stainless steel?

November 2017 could be a defining moment for A2. That's when the court case involving A2 and Lion Group is due to be completed. I have no stake in which ever way the case is decided, but it will be interesting to see what the Court decides.

Infant formula accounts for 72 per cent of the group’s revenue and A2 says' achieving China Food and Drug Administration registration for Chinese labelled infant formula was an important target for the company.'

OCD don't seem to have a problem with WMP 'Koekemoer says this indicates that there will be no short-term recovery for SMP and that the differential for WMP and fat prices will remain for a while.'

I don't believe that you can compare Fonterra to Tatua. Fonterra is run via legislation, Tatua is free to set entry and exit as it feels. Fonterra has to work within DIRA. Tatua has a very compact supply area and controls the numbers of suppliers - it is closed to new supply. Fonterra has to collect milk from any and everywhere in NZ and it is almost impossible to refuse to accept supply. Fonterra has had to supply it's competition with cheap DIRA milk - for Westland Milk the ability to take DIRA milk has added up to 20c/kgms to it's payout some years. Compare Fonterra to the large overseas co-operatives for a fairer comparison.

When you put it like that CO, it does make one question the wisdom of those that pushed for and were part of the formation of Fonterra in the first place.