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Deepening frustration is rippling through New Zealand's arable sector as livestock farmers continue to favor imported palm kernel expeller (PKE) over domestically produced grain.
New Zealand ranks among the world's largest importers of PKE, a byproduct of the palm oil industry sourced mainly from Indonesia and Malaysia. The country brings in more than 2 million tonnes of the product annually, valued at approximately NZ$2 billion, to supplement the diets of dairy cattle, particularly during periods of pasture scarcity.
Arable farmers growing feed grain have long lobbied for greater uptake of their product domestically, but have struggled to compete on price against similar imported feeds.
The issue was raised at this week's Seed and Grain New Zealand (SGNZ) conference in Christchurch, where leading arable and seed companies and government officials explored the challenges and opportunities facing the country's heritage cropping sectors.
SGNZ Vice President Jo Townshend, of Midlands Seed in Mid Canterbury, said local arable producers find it difficult to remain competitive against cheaper imports. She argued that the domestic manufacturing sector lacks the government support needed to keep it viable and cost-effective.
'A huge amount of imports is coming into this country, possibly due to free trade agreements or other agreements, that are really putting a ceiling on the ability of arable farmers to support our own domestic economy, including process growers,' Townshend said.
'For $2 billion worth of animal feed coming into the country, for a country that is pretty good at producing it itself, is pretty disappointing,' she added.
SGNZ President Edward Luisetti, of Luisetti Seeds in Canterbury, said arable farmers with irrigation were looking forward to a warmer summer, particularly on the East Coast, if El Niño arrived as forecast. However, he also expected the drier conditions to drive up farmers' PKE imports this year.
Nathan Guy, a former Horowhenua dairy farmer and former agriculture minister who now serves as the country's special agricultural trade envoy, acknowledged at the event that he feeds PKE to his own cattle and found it easy to switch on and off.
'A benefit with PK is you can start the cows on it tomorrow. There is no rumen digestion change as there is with some other feeds,' Guy said.
He also noted that PKE costs have climbed, with shipping driving up prices.
'PK is very expensive right now, very expensive with shipping costs,' Guy said. 'Is there a way of potentially the arable over time becomes more cost competitive?'
He added that many farmers, including himself, would reach a point where they look to grow maize themselves as costs rise.
One farmer who contacted RNZ said PKE was $300 per tonne, versus $500 for grain, and that dairy is a business, not a national charity.
Fonterra, the dairy cooperative and the world's largest dairy exporter, said its cows are 96 percent grass-fed on average, including silage, hay, and forage crops such as legumes and brassicas. The company previously told RNZ that PKE accounts for less than 2 percent of its farmer-shareholders' cows' overall diet.
The use of imported PKE has drawn sharp criticism from environmental groups. Last year, Greenpeace activists staged a protest at an Agrifeeds PKE storage shed at Port Taranaki, and activists also occupied part of the port in April to protest Fonterra's use of palm kernel.
At the 2024 Fonterra annual general meeting, delegates were again greeted by a Greenpeace protest over the use of palm kernel as a stock feed.
Amanda Larsson, Greenpeace's global project lead for agriculture, said the palm kernel supply chain is 'incredibly murky' and difficult to verify for deforestation links. 'I think most New Zealanders would be pretty horrified to hear the dairy industry is connected to rainforest destruction, when there is a homegrown alternative that would actually support New Zealand's own farmers,' Larsson said. She added that Greenpeace is 'pretty aligned with the arable farmers on this one,' and that farmers may need support to transition to more diverse and less monocultural farming systems in the face of climate change.
In response to the controversy, the arable sector launched the NZ Grown Grains certification trademark last year to help consumers identify products made with local grain and to encourage uptake among farmers. More than 34 producers are now certified, with additional applications under assessment, including grain destined for animal feed.
Foundation for Arable Research (FAR) also released new research last month showing that locally produced feed grains have a lower carbon footprint than imported feeds, building on earlier assessments by AgResearch.
Source: RNZ