Tuesday, 06 October 2015 12:00

Fonterra’s PKE decision upsets many

Written by 
Feds dairy chair Andrew Hoggard. Feds dairy chair Andrew Hoggard.

Fonterra is being urged not to force restrictions on the use of palm kernel expeller (PKE) without consulting farmers.

The co-op's handling of the issue hasn't gone down well with farmers, says Federated Farmers Dairy chairman Andrew Hoggard.

He says many farmers were disappointed to get a letter last month urging them to restrict PKE usage below 3kg/day/cow.

"It's the way it was announced; rather than engaging with farmers the co-op sent a letter leaving farmers a bit concerned," he told Rural News.

Hoggard last week attended a Fonterra shareholders meeting in Palmerston North and raised the issue; chairman John Wilson and
chief executive Theo Spierings were at the meeting.

Hoggard says the farmers were told that excessive use of PKE could become an issue for our international customers.

"If there's an issue, then we have to take action; we can't be making milk that no one will buy. But I hope Fonterra doesn't come down with us on with processes; I hope they give us information and get our feedback before deciding what to do."

Hoggard believes a bonus system for less PKE use and a demerit system for high PKE use may work.

Fonterra has told farmers it is setting guidelines for the use of PKE: maximum quantity 3kg/cow/day.

Fonterra chairman John Wilson says PKE usage has doubled in the past four years. Higher levels of PKE begin to affect milk composition, he says.

Fonterra is planning more tests and research in the coming months on PKE usage and its effect on milk composition.

Fonterra subsidiary Farm Source is a major traders of PKE, a by-product of the palm oil industry in South East Asia. PKE is the residue of mechanical extraction of oil from the nut of the palm tree.

PKE is a dry, gritty meal with a soapy smell and has low palatability until cows get a taste for it. However, it has reasonable levels of energy (ME) and protein, and is relatively easy to introduce to cows.

Fonterra group director co-operative affairs Miles Hurrell says after pasture, PKE is one of the cheapest supplementary feed options for farmers.

Our data shows that use of PKE is increasing, he says.

"We recommend our farmers follow [our maximum ration] guidelines.... The recommended maximum of 3kg/per day/per cow is a voluntary guideline and we will work with our farmers to help them maximise profitability while ensuring the health of their herd."

Hurrell says consumers globally are driving a trend towards dairy products that are sourced from pasture-based milk.

"Consumers want to know what is in their food and where it comes from. We... make the most of this trend to enhance returns to our farmers who are already renowned for producing the best milk in the world... from pasture-based farming.

"This gives us a key competitive advantage globally. Our milk products have an excellent reputation and we want to maintain that, and stay ahead of increasing consumer expectations."

 

Why new rules?

  • Trend shows large increase in PKE use
  • Fonterra is developing a milk test for indications of high PKE use
  • No current hard-and-fast rules on PKE limits
  • The 3kg PKE/cow/day ‘guidance’ precludes PKE use getting to the point where the co-op cannot process the milk to customers’ requirements
  • The biggest part of a cow’s daily intake (18–20kg) in NZ is pasture, seen as a benefit by consumers.

More like this

New freshwater farm plans 'practical and affordable'

OPINION: Entering Parliament back in 2023, I wanted to help put the fun back in farming. After six years of Labour, rural New Zealand was tired of the relentless waves of red tape and compliance, draining joy from people who just want to work the land.

"Our" business?

OPINION: One particular bone the Hound has been gnawing on for years now is how the chattering classes want it both ways when it comes to the success of NZ's dairy industry.

Dr Mike Joy says sorry, escapes censure

Academic Dr Mike Joy and his employer, Victoria University of Wellington have apologised for his comments suggesting that dairy industry CEOs should be hanged for contributing towards nitrate poisoning of waterways.

Farmer anger over Joy's social media post

A comment by outspoken academic Dr Mike Joy suggesting that dairy industry leaders should be hanged for nitrate contamination of drinking/groundwater has enraged farmers.

Farmers' call

OPINION: Fonterra's $4.22 billion consumer business sale to Lactalis is ruffling a few feathers outside the dairy industry.

Featured

Fencing excellence celebrated

The Fencing Contractors Association of New Zealand (FCANZ) celebrated the best of the best at the 2025 Fencing Industry Awards, providing the opportunity to honour both rising talent and industry stalwarts.

B+LNZ launches AI assistant for farmers

Beef + Lamb New Zealand has launched an AI-powered digital assistant to help farmers using the B+LNZ Knowledge Hub to create tailored answers and resources for their farming businesses.

National

Machinery & Products

Tech might take time

Agritech Unleashed – a one-day event held recently at Mystery Creek, near Hamilton – focused on technology as an ‘enabler’…

John Deere acquires GUSS Automation

John Deere has announced the full acquisition of GUSS Automation, LLC, a globally recognised leader in supervised high-value crop autonomy,…

Fencing excellence celebrated

The Fencing Contractors Association of New Zealand (FCANZ) celebrated the best of the best at the 2025 Fencing Industry Awards,…

» Latest Print Issues Online

The Hound

A step too far

OPINION: For years, the ironically named Dr Mike Joy has used his position at Victoria University to wage an activist-style…

Save us from SAFE

OPINION: A mate of yours truly has had an absolute gutsful of the activist group SAFE.

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter