Imports of palm kernel extract to Timaru are increasing, despite Fonterra's threats to penalise farmers for excessive use of the by-product. Alexia Johnston investigates.
In the seven months to January, 190,000 tonnes of palm kernel extract (PKE) were shipped in to the port of Timaru, 70% more than the same period last year.
PrimePort Timaru chief executive Phil Melhopt said weather conditions probably contributed to that increase.
''Palm kernel is definitely up on last year. [It] is driven by seasonal influences like a dry start to the season, rain and grass growth,'' he said.
''So, if it's a dry season we see more palm kernel coming through.''
While this financial year was tracking to be a busy one for PKE imports, Fonterra was sticking by its plans to penalise farmers who used excessive amounts of the product to feed their stock.
PKE is a by-product of the palm oil industry in Southeast Asia, derived from the nut of the palm fruit after the oil is either mechanically extracted or extracted by solvent.
In December, due to the link between excessive use of the product and its impact on milk fat compositions, Fonterra announced the introduction of a fat evaluation index (FEI) grading system, which is due to come into effect from September.
In March last year, Fonterra began including FEI results on farmers' milk dockets.
Farm Source regional head Lisa Payne said the FEI grading system would help farmers supply milk with the right fat composition so the co-op could continue to manufacture products that met customer specifications and provided the best return to farmers.
''The co-op has a responsibility to constantly evolve to meet our customers' needs, and provide the highest value return for every drop of milk. Therefore, we need to make sure that the milk supplied can be manufactured into the products that meet our customers' specifications,'' she said.
''While the vast majority of our farmers are providing milk with the right fat composition, the FEI grading system will help others meet this requirement.''
Farmers have been given a year to adapt to the concept before incurring demerits, which would impact on collection-day payments.
Fonterra shareholder councillor for the South Canterbury ward Michelle Pye said farmers had identified palm kernel extract as a cost-effective supplementary feed. When fed in-shed, it had very little wastage.
She said while all feeds had an effect on milk composition, palm kernel had been identified as having the biggest effect, therefore needed to be well managed.
She did not believe its use was as high in Canterbury as it was in other parts of the country, particularly those areas that lacked irrigation and had more regular long spells of dry weather.
''Locally there may be some dryland farmers or high-input farmers that will be affected, but I think most other farmers will be able to manage their feed systems to ensure they are within the parameters of the new FEI.
''Along with the more traditional supplementary feeds [including] wheat, barley [and] silage, it helps farmers achieve optimum body condition for cows at different times of the season.''
- Central Rural Life