Dairy farming is New Zealand‟s pre-eminent primary industry. It achieves large export earnings but is also responsible for a large proportion of the country‟s greenhouse gas emissions. One of those greenhouse gases is CO₂, and in order to lower New Zealand‟s net greenhouse gas emissions, it is important to identify any management options that can lead to carbon sequestration in pasture soils and thereby minimise net CO₂ emissions to the atmosphere. It is equally important to understand what factors could lead to losses of soil carbon from pasture soils and thereby add further to New Zealand‟s CO₂ emissions. We addressed these questions by using two years of observations from an eddy-covariance system on a dairy farm in the Waikato that provided estimates of the exchanges of water and CO₂ with the atmosphere. We used CenW 4.1, a process-based ecosystem model, to describe these observations in terms of their biophysical drivers and the interactions between them. Agreement between the model and observations was excellent, especially for evapotranspiration and net photosynthesis, for which 91% and 79% of observed daily variations could be explained. The validated model was then used to run different scenarios to assess the effects on soil organic carbon of changes in the application of fertiliser and irrigation water, grazing scheduling, differences in plant-internal resource allocation, and changes in temperature and CO₂ concentration. We found that it was important to consider the combined effect of changes in net primary production, the amount of carbon taken off-site through grazing, the proportion of carbon allocated to pools, especially pools in the soil, that facilitates the stabilisation of carbon in organic matter, and any changes in the rate of organic matter decomposition. Soil organic carbon stocks were positively correlated with rates of fertiliser application and with the rate of water application (rain or irrigation) up to some moderate water application rates. For other changes in key properties, changes in soil organic carbon were often negatively correlated with changes in milk production. That was clearly evident for changes in the grazing regime and in plant root:shoot ratios. Anticipated environmental changes, such as increases in temperature and CO₂ concentration, and both increases and decreases in precipitation from moderate values had either neutral or detrimental effects on soil organic carbon stocks. Milk production was generally more positively affected under most environmental changes.