PKE penalty talks begin
Fonterra has begun talks with its farmers about finalising penalties for excessive use of palm kernel.
Meetings are being held over the next two weeks and penalty options are being floated for palm kernel expeller, known as PKE, with the co-operative seeking farmer feedback.
Fonterra’s Bay of Plenty Farm Source regional head Lisa Payne said there were two options that were being put in front of farmers. She could not provide further details about the options, saying that the co-op wanted to talk to farmers first.
Payne said Fonterra hoped to finalise a decision on its preferred option by the end of the year for new rules beginning in September next year.
She said feedback had been positive during meetings she had attended.
‘‘What it shows me is that farmers really want to produce milk at the levels we need. They want the co-op to be doing its job of maximising the returns on the milk.’’
In 2015 Fonterra announced a voluntary guideline of a maximum of three kilograms per cow per day.
Fat evaluation index (FEI) guidelines were then introduced because PKE affected milk fat composition and caused problems with manufacturing and meeting customers’ specifications.
Fonterra rolled out the FEI nationwide in May after tests were carried out on 200 farms and confirmed by DairyNZ and AgResearch.
The co-op told farmers in June they would introduce a grading system for the FEI. The test is taken by tanker drivers when milk is collected and is based on a six day rolling average of a farm’s FEI. Test results are graded A, B, C, or D, with a C and D grade exceeding the threshold limit.
Payne said they had also given farmers 18 months of data showing how FEI levels had tracked to help them plan for any changes.
‘‘Our target date then was the beginning of next season. Since then, we have decided to delay that a little bit until September just to take the heat off calving time.
Fonterra would be working closely with DairyNZ to run workshops for alternatives to feeding cows PKE and to help them plan for any changes.
Payne said there had also been discussions around what would happen if there was an adverse event such as a drought or another challenging wet spring similar to the one much of the North Island had experienced.
‘‘It’s tough as this is about milk suitability and the need for that milk and its suitability doesn’t really go away during adverse weather conditions.
‘‘We will continue to do everything we can to support our farmers during that but what we are asking by giving these indications and these tools, is to please plan as much as you can and build resilience into your system.’’