From a recent ARS Article on the environmental impact of dairy cows:
The researchers found that total emissions for the greenhouse gases methane, nitrous oxide, and carbon dioxide were 8 percent lower in year-round outdoor production systems than in the high-production confinement systems. The biggest payoff? Keeping dairy cows outdoors all year lowered ammonia emissions by about 30 percent.
Although the confined cow produced 22,000 pounds of milk every year and the foraging cow produced only 13,000 pounds, the total amount of milk protein and fat produced on the two farms was essentially the same, because the foraging cows produced milk with more fat and protein. In addition, the same amount of land supported a larger number of the small-framed Holstein/Jersey crossbred cows.
In this modelling work, outdoor cows also reduced fuel use, lowered net greenhouse gas emissions by 10 percent, and resulted in far less erosion and runoff than their indoor brethren.
Of course this all makes sense in a warm and fuzzy "just so" sort of way. But with data to back it up (rather than wishful thinking, as is so often the case), the comparison suddenly becomes quite a bit more compelling.
Definitely something to keep an eye on -- we're very interested in seeing more research in this area. There could be some serious downwind (heh) implications for the future of animal agriculture here.
Another methane joke? Really?