Bay of Plenty maize grower and Golden Grain stock food company owner Garry Bryson said the price gap between palm kernel’s cost to dairy farmers and an economic cost to grow grain had simply become too wide in the past couple of years.
“What we have really suffered from is these major imports of cheap overseas-sourced grain coming across our ports, which have completely undercut our ability to grow and supply grain profitably here in New Zealand,” he said.
“What we have really suffered from is these major imports of cheap overseas-sourced grain.”
Garry Bryson
Grower
That had a greater impact on NZ grain than palm kernel alone.
More than 100,000 tonnes of largely Bulgarian grain had been imported to NZ in the past 12 months, selling at about $345/t landed and in silos while NZ growers need $400/t for an economic return on their crops.
And given the poor state of dairy returns it was unlikely dairy farmers would switch to grain feed even if PKE was banned or reduced.
“I think bank managers will be more inclined to be encouraging them to destock and milk fewer cows.”
That was supported by latest farm survey data from AgFirst that put feed expenditure down by 46% last season and expected it to be down by another 5% this season.
Meantime, dairy cow numbers fell by 5% in Waikato-Bay of Plenty last year and were expected to drop another 1-2% this season.
Federated Farmers grain and forage vice chairman Hew Dalrymple welcomed the decision by the country’s largest farming company to pull the pin on palm kernel.
“It is a good thing.
“Palm kernel is a bad image for NZ, feeding a low grade feed that is also not always good for butter production – it can’t be a good thing when it affects the products you make.”
Like Bryson he was uncertain any widespread decline in palm kernel use would spell a boost for the grain sector given dairy returns.
“The Indonesians regard it as a by-product and treat it as such, heaping it in piles and when it gets here, and I have seen this first hand, it is full of junk.
“It is a good thing for NZ to be getting out of this low-end type product.”
He hoped Landcorp’s decision would be a signal to Fonterra as the country’s largest processor to put more pressure on suppliers to cut the recommended 3kg a cow a day maximum back to 1.5kg and ultimately get rid of it altogether.
“But it won’t fix our issues.
“International grain prices are hurting us the most at present.”
Farm adviser and veterinarian Alison Dewes is part of Landcorp’s environmental advisory board that played a role in determining the decision to drop palm kernel.
“They have been looking at this for a year.
“Modelling done on the farms in the upper Waikato catchment showed they could do more with fewer cows and that palm kernel was just filling in the gaps.”
She agreed eliminating palm kernel also fitted with Landcorp’s efforts to establish its high quality Pamu brand across all animal protein sources, including dairying.
Landcorp’s decision might prove to be the tipping point, pushing many farmers to drop a product they had long known was flawed.
“Even at the Fieldays two years ago when prices were good, farmers were saying they were not always entirely comfortable with it as a supplement.”
The fact a farming company had put a line in the sand on palm kernel was a fantastic initiative, she said.
“Palm kernel use has taken stocking rates too far and farmers are going to have to analyse their businesses and adjust their stocking rate accordingly.”
She said the ability to dial 0800 for palm kernel had made the product too easily obtained.
