Imported Feed Adds Pressure on New Zealand Grain Producers

New Zealand grain producers are facing stronger competition from cheaper imported animal feed, especially palm kernel expeller, or PKE, which is widely used by dairy farmers.

New Zealand imports more than two million tonnes of PKE each year, mainly from Indonesia and Malaysia. The country is among the world’s largest buyers of the feed.

Price is a major factor. Some farmers say PKE costs about 300 dollars per tonne, compared with around 500 dollars for locally produced grain. The difference makes it harder for local grain growers to compete for livestock feed demand.

Seed and Grain New Zealand estimates that the country imports about two billion dollars worth of animal feed.

Demand for PKE could rise if dry weather reduces pasture availability. However, higher shipping costs are increasing the price of imported feed and could reduce its advantage over local grain.

Some livestock farmers are also considering growing more corn for their own feed needs, while grain producers are promoting locally grown grain as an alternative.

Despite the large import volumes, PKE makes up less than two percent of the average diet of Fonterra suppliers’ dairy cows, with about 96 percent coming from grass and other pasture feeds.