The Pāmu PKE U-Turn
Pāmu (Landcorp) recently announced a U-turn on its use of Palm Kernel Extract (PKE), a supplementary feed used on dairy farms. This decision highlights the ongoing debate around supplementary feeds and their environmental and economic impacts.
As New Zealand's largest corporate farmer, Pāmu's strategic shift carries significant weight across the agricultural sector. The initial move away from PKE was driven by a desire to align with premium, pasture-fed market positioning and to address consumer concerns regarding the environmental footprint of imported feeds. However, the practical realities of farming in a changing climate, where unpredictable weather patterns frequently disrupt pasture growth, have necessitated a more flexible approach. This reversal underscores the complex balancing act farmers face between maintaining strict environmental credentials and ensuring animal welfare and farm viability during challenging seasons.
The reliance on imported supplementary feeds has long been a contentious issue within the New Zealand dairy industry. While our pasture-based system is globally recognised for its efficiency and lower carbon footprint compared to intensive indoor farming, it remains highly vulnerable to climatic extremes. When droughts strike, particularly in regions like Northland and the Waikato, pasture covers can deplete rapidly, leaving farmers with limited options to feed their herds. In these scenarios, supplementary feeds become a critical tool for maintaining animal health and sustaining milk production levels.
What Are the Environmental Impacts?
The use of PKE has been linked to deforestation in Southeast Asia, raising concerns about biodiversity loss and carbon emissions. However, proponents argue it provides a reliable feed source during droughts or poor pasture growth.
The environmental debate surrounding PKE is multifaceted. On one hand, the expansion of oil palm plantations in countries like Indonesia and Malaysia has been a major driver of tropical deforestation, leading to the destruction of critical habitats for endangered species such as orangutans and contributing significantly to global greenhouse gas emissions. Environmental advocacy groups argue that by importing PKE, the New Zealand dairy industry is indirectly supporting these unsustainable practices. This association poses a risk to the "clean, green" image that underpins the marketing of New Zealand dairy products internationally.
Conversely, the agricultural sector points out that PKE is essentially a byproduct of the palm oil industry. The primary driver of deforestation is the demand for palm oil itself, which is used extensively in global food and cosmetic products. From this perspective, utilising the extract as animal feed is a form of waste recovery, preventing the byproduct from being discarded. Furthermore, within the New Zealand context, having access to a dense, energy-rich feed like PKE can prevent overgrazing and soil degradation during dry periods, thereby protecting local environmental assets. The challenge lies in ensuring that any imported PKE is sourced from certified sustainable plantations, a requirement that major dairy processors have increasingly sought to enforce.
How Does This Affect Farm Economics?
For farmers, PKE offers a cost-effective way to maintain milk production when pasture is limited. The challenge is balancing these economic benefits with the growing consumer demand for sustainably produced dairy products.
The economic realities of dairy farming dictate that feed costs are one of the most significant variables in a farm's operating budget. PKE has historically been an attractive option because it is relatively inexpensive compared to other supplements and provides a good balance of energy and fibre. During periods of pasture deficit, the ability to cost-effectively fill the feed gap is crucial for maintaining milk yields and, consequently, farm revenue. Without access to affordable supplements, farmers might be forced to dry off cows early or cull capital stock, both of which have severe long-term financial implications.
However, the economic equation is shifting. Global supply chain disruptions, fluctuating shipping costs, and currency exchange rates can introduce significant volatility into the price of imported feeds. Additionally, there is a growing economic incentive to meet the stringent sustainability criteria demanded by premium international markets. Consumers in Europe, North America, and increasingly Asia are willing to pay a premium for dairy products that can prove a low environmental impact and high animal welfare standards. If the use of PKE jeopardises access to these high-value markets, the short-term cost savings of the feed may be outweighed by the long-term loss of revenue. Therefore, farmers must carefully calculate the return on investment of supplementary feeding, factoring in both immediate production gains and broader market positioning.
What Are the Viable Alternatives to PKE?
As the industry looks for alternatives, there is a growing focus on locally sourced feeds and innovative solutions to manage feed shortages without relying on imported supplements.
The search for sustainable, locally produced alternatives to PKE is accelerating. One primary strategy is the increased cultivation of homegrown supplementary crops such as maize silage, fodder beet, and lucerne. These crops can be grown on-farm or sourced locally, reducing reliance on international supply chains and providing a buffer against imported feed price volatility. Maize silage, in particular, is highly valued for its energy content and ability to be stored for extended periods, making it an excellent drought reserve. However, growing these crops requires suitable land, machinery, and expertise, and it can introduce different environmental challenges, such as nutrient leaching and soil erosion, if not managed carefully.
Another avenue of exploration involves improving pasture resilience and grazing management. Advances in plant breeding are producing pasture varieties that are more drought-tolerant and deeper-rooting, enabling them to persist longer during dry spells. Precision agriculture technologies, including satellite imagery and soil moisture sensors, allow farmers to optimise their grazing rotations and apply fertiliser more efficiently, maximising the growth of existing pasture. Furthermore, there is growing interest in the potential of novel feed sources, such as insect protein or algae, although these remain largely in the experimental phase for large-scale dairy operations. Ultimately, a diversified approach that combines resilient pasture management with a strategic reserve of locally sourced supplements is likely to be the most robust strategy for the future.
How Can Technology Improve Feed Efficiency?
Beyond simply finding alternative feed sources, the New Zealand dairy sector is increasingly turning to technology to optimise how feed is utilised. Precision feeding systems are becoming more common, allowing farmers to tailor rations to the specific nutritional needs of individual cows or herds. By using data from milk testing, body condition scoring, and automated weighing systems, farmers can ensure that supplements are targeted where they will deliver the greatest return on investment, rather than applying a blanket approach that may result in waste.
Furthermore, advancements in feed processing and storage technology are helping to preserve the nutritional value of homegrown supplements. Improved silage inoculants and better storage infrastructure reduce spoilage and ensure that the feed retains its quality over longer periods. This is particularly important for managing seasonal variations in pasture growth. By maximising the efficiency of every kilogram of feed, whether grown on-farm or imported, farmers can reduce their overall feed requirements, lower their operating costs, and minimise their environmental footprint. The integration of these technologies represents a critical step towards a more resilient and sustainable dairy industry.
Frequently Asked Questions
Why did Pāmu change its policy on PKE?
Pāmu adjusted its policy to balance its commitment to sustainable, pasture-led farming with the practical need to ensure animal welfare and maintain production during severe weather events and pasture shortages.
Is all PKE linked to deforestation?
Not necessarily. While the palm oil industry has a history of deforestation, efforts are ongoing to source PKE exclusively from certified sustainable plantations that do not contribute to habitat destruction.
Can New Zealand dairy farms operate without imported feed?
While challenging, it is possible. It requires a strong focus on resilient pasture management, the cultivation of homegrown crops like maize silage, and the strategic use of technology to optimise feed efficiency.
Sources
- DairyNZ - Supplementary Feeding Guidelines
- Ministry for Primary Industries - Agricultural Production Statistics
- Pāmu (Landcorp) - Corporate Sustainability Reports