Is organic farming truly sustainable? Estimating the environmental milk costs of Italian alpine dairy farms

Most studies on dairy farming's environmental impacts have utilized Life Cycle Assessment (LCA), focusing on emissions quantification within advantaged regions. However, monetizing these emissions offers a more precise and comparable framework for evaluating different farming systems. This study aims to estimate the true costs of milk production by assessing both the economic and environmental impacts of organic (ORG) and conventional (CON) Simmental dairy farming systems. We expanded the Typical Farm Approach (TFA), a representative farm model, by including 15 ORG farms and 15 CON farms. Using LCA methodology, six environmental impact categories were evaluated: Global Warming Potential (GWP100), Acidification Potential (AP), Marine Eutrophication Potential (MEP), Terrestrial Ecotoxicity (TE), Land Use (LU), and Water Consumption (WC). Two functional units were employed: square meters of farm area and kilograms of energy-corrected milk (ECM). Results reveal that although ORG farms incur higher operating costs due to an unfavorable milk-to-feed price ratio, they generate higher revenues and show statistically insignificant differences in fixed and total costs per kg ECM compared to CON farms, while also benefiting from higher returns from additional subsidies. The estimated environmental costs range from 43 to 64 euro cents per kg ECM for ORG farms and 37 to 51 euro cents per kg ECM for CON farms. Among the impact categories, GWP100 (up to 52 %) and LU (up to 59 %) account for the largest shares in the sensitivity analysis of total environmental costs. However, despite these findings, the internalization of environmental costs remains impractical due to uncertainties in accurately assessing environmental impacts across various farming practices, regions, and methods. Our analyses suggest that optimizing farm productivity and efficiency would offer greater economic and environmental benefits compared to switching from CON to ORG farms.

Freie Universität Bozen
Universitas Gadjah Mada