June 20 (BusinessDesk) - Margins on dairy products can’t be too bad, when you consider that palm kernel expeller is shipped some 7,500 kilometres from Indonesia to New Zealand, fed to dairy cows whose milk is dried, bagged and sent some 11,000 kilometres to China (for example).
Greenpeace hasn’t achieved the same level of traction with PKE as an environmental issue as it has with palm oil production and the destruction of tropical rain forest to make room for palms.
The Ministry for Primary Industries has just released reports based on site visits to PKE meal processing facilities in Malaysia and Indonesia this month which will result in a tightening of import rules to ensure the feed meets biosecurity standards.
MPI’s key finding was that the majority of manufacturing and storage facilities in both countries met, or could meet with minor improvements, New Zealand’s import requirements for supply chain security.
Indonesia and Malaysia are the world’s two biggest producers of palm oil and the biggest source of PKE, a waste product from oil production, imported into New Zealand.
Between Jan. 1 last year and March 31 this year New Zealand imported 690,541 tonnes of PKE from Indonesia and 781,034 tonnes from Malaysia, amounting to about 93 percent of total imports of 1.59 million tonnes. That’s up from 100,000 tonnes in 2004.
PKE compares favourably price-wise with other feed stocks, at just under $300 a tonne currently, and is a useful supplementary feed when pasture growth is low. Cows don’t find it particularly palatable but that means they don’t gorge on the stuff.
The MPI report found that some export PKE from Malaysia could potentially be sourced from manufacturing and storage facilities that haven’t been approved by Malaysia’s National Plant Protection Organisation and the ministry is urgently amending an import health standard (and conveying its concerns to Malaysia) to close out the risk.
For Indonesia, MPI found a small number of manufacturing facilities don’t fully meet New Zealand import requirements for PKE storage. Again an urgent change is being communicated.
PKE must be heat treated to at least 85 degrees Celsius to meet New Zealand’s import standards but if it is then stored where rodents or birds can get in, the phytosanitary controls can be breached. It should be clearly noted that New Zealand’s standards are high. Taiwan and India don’t require phytosanitary certificates for PKE.
Farmers have understandably voiced some deep disquiet. Federated Farmers sent two members on a fact finding mission last year. They visited an unapproved plant in Malaysia – you can see the PKE spilling out onto the yard at the plant in Negeri in one of their photos.
Closer to home, a Bay of Plenty farmer found “an exotic animal body part” in a consignment of PKE, it emerged this week. The animal, which likely got it after the feed was heat treated, wasn’t identified and there’s no suggestion it was a headline grabbing-species like an Orang-utan. Imagine what Greenpeace would have made of that.
“We now know animal tissue has entered the PKE supply chain at a later stage, perhaps dragged in by a rodent, dropped by a bird or by some other animal entering a storage area,” Fed Farmers vice president William Rolleston said in a statement yesterday.
The relationship between farmers and MPI, as the body overseeing biosecurity at New Zealand’s borders, has been an uneasy one. Imported pollen looks like the vector for the devastating Psa disease of kiwifruit vines. Beekeepers and pig farmers have failed to prevent imported products entering the country that they say pose biosecurity risks.
“We must ask why the MPI did not initiate a recall of this shipment,” Rolleston said. “Clearly the shipment was contaminated and that is a breach of the import health standard.”
At stake is the high reputation for food safety of New Zealand’s dairy products and the industry hasn’t yet won the battle when it comes to PKE.
Economist Gareth Morgan wrote in a column in March that feeding palm kernel and other grains to dairy cows “changes the fat content of the milk,” with the Omega 3 in milk from grass fed cows replaced by “less healthy palmitic fatty acid and even trans fats.”
That doesn’t play well for the harried consumer who frets about what’s in their food and how it gets made. A2 Corp, which markets milk with an alternative protein it claims has health benefits, has grown into a $406 million company.
Last year Fonterra was forced to defend the addition of permeate to milk to standardise protein content and the nation’s biggest company remains vigilant.
Just this week Fonterra was reported as saying it would not accept milk from any new farms created from marginal land using oil and gas drilling waste, which is spread on a number of properties in Taranaki. Who knew it took any milk from such farms?
Trust in food safety is hard won and easily lost. Producers have to manage not only the actual risks, but the perceptions of consumers bombarded by a whole spectrum of impenetrable science, pseudo-science, health fears, nutritional fads and perhaps paranoia over food production on an industrial scale.