Next season it would introduce a demerit system based on a six-day average fat evaluation index (FEI), to be printed on the tanker docket for each milk pick-up.
Since April all suppliers had been notified of their FEI numbers and they would have a season to change farming systems and prepare for the demerit system.
But Fonterra was not doing so for corporate responsibility or palm oil sustainability reasons, instead invoking potential dairy product quality issues.
Farm Source chief operating officer, Miles Hurrell said Fonterra did not take a position against palm products but also referred back to the March launch of the Trusted Goodness quality seal.
At that time Fonterra acknowledged consumers wanted to know more about where their food came from and that it was produced by businesses using sustainable and ethical practices.
Farm Source was a large importer of palm kernel from its supplier, Wilmar International, and Wilmar was supporting the feeding guideline and the FEI system.
“We have had a voluntary palm kernel feeding guideline of 3kg per cow since 2015 and it is time to tighten up and introduce a grade,” he said.
Four FEI ranges were proposed:
- A level, FEI under 7, suitable for manufacturing requirements and customer specifications;
- B level, FEI 7 to 7.9, meets requirements but approaching the threshold;
- C level, FEI 8 to 9.4, exceeds threshold limit and;
- D level, FEI 9.5 and over, well exceeds threshold.
Hurrell said the demerits had not been determined but would be similar to the somatic cell count system.
Fonterra was moving to an output system for milk composition rather than a palm kernel input system but the science indicated a strong correlation between supplementary feeding at 3kg/cow/day and a B grade for FEI, he said.
“We are not talking about banning palm kernel because of its valuable use in farm systems, especially during adverse weather events.
“The science also shows that palm kernel can be safely fed to non-lactating cattle above the guideline.”
He was not specific about what dairy products were adversely affected by changes in fatty acid composition or how, saying that high rates of palm kernel changed the amounts and ratios of fatty acids.
“At a certain point the fat becomes difficult to process into certain products and does not meet customer specifications for other products.
“If the palm kernel trend continued as it did at certain times last season, the potential cost is across all of our products.”
Hurrell admitted to weighing up the balance between providing supplementary feeding options to farmers through Farm Source and ensuring Fonterra’s consumer products were “best in class”.
A long consultation with farmers had followed the voluntary guideline, along with field trials on palm kernel feeding levels and scientific analysis.
Year not long enough
High input dairy farmers will have to do a lot of supplementary feed trials and evaluation of their own circumstances and weather patterns, Northland farmer Geoff Crawford said.
After attending the Northland Agricultural Research Farm (NARF) field day immediately after Fonterra’s fat evaluation index (FEI) announcement, Crawford said it was not yet clear how different feeding rates of palm kernel, pasture and crops would move the index.
“Fodder beet and turnips were apparently lifting the FEI also,” he said.
Crawford had 450 autumn-calvers milking on three farms in the Hikurangi Swamp district north of Whangarei getting half of their daily requirement from supplementary feeding, including 4kg/cow/day of palm kernel.
His milk was testing in the FEI C grade.
Another farmer at the NARF field day had fed up to 5kg/cow/day of palm kernel with 14kg DM pasture and got an acceptable FEI result.
“There appeared to be a dilution effect with the high pasture intakes.”
But a year of grace before the demerits kicked in might not be enough for each farmer to work out what moved the index.
Crawford called for DairyNZ to do cropping and palm kernel feeding trials at different times and in different locations.
He also suggested Fonterra could move milk between factories and regions when higher palm kernel feeding levels were necessary, in the dry months or after adverse weather events.
Whole milk powder, for example, might be made from high FEI milk or it could be diluted with milk from low FEI districts.
Two or three years could be needed to establish the new operating guidelines on each farm, he said.
