Landcorp ditches palm kernel feed to boost environmental credentials

Landcorp wants to move away from being a commodity supplier of agricultural products by developing higher=value products.

Landcorp Farming, the state-owned farmer, will stop using palm kernel expeller on its farms in the current financial year to shore up its environmental sustainability credentials.

Palm kernel, used by dairy farmers as a supplementary feed to grass during winter or in seasonal droughts, is imported from Southeast Asia and has faced criticism for its environmental impacts as the expansion of the palm oil industry spurs tropical forest clearance and peat fires.

Landcorp, New Zealand's largest corporate farmer, wants to move away from being a commodity supplier of agricultural products by developing higher=value products, inking long-term contracts with customers, and investing in branding to boost the value of its products. All Landcorp farms will move to alternative, locally-sourced feed supplements by June 2017, chief executive Steven Carden said in a statement.

"One of the real points of difference for New Zealand farming is our ability to grow grass and produce grass-fed animals. There is a growing interest in this food globally," Mr Carden said. "Landcorp wants our partners and customers to know they can trust that we farm sustainably and care for the environment. We need to anticipate shifting consumer expectations on how their food is produced and change how we farm accordingly. We think there are significant longer term gains in terms of our ability to attract new premium customers."

He said the shift away from palm kernel, or PKE, is expected to be "virtually cost-neutral."

Landcorp said 60%  of its farms don't use any PKE. The supplement isn't used on any livestock farms and a few dairy farms are already PKE-free.

In the 2014 financial year, Landcorp's peak year of using the supplement, PKE represented about 6% of the average total diet of a dairy cow, and last year that fell to less than 4% .

Guy Salmon, the chairman of Landcorp's independent Environmental Reference Group, said the group had been in discussions with Landcorp on the issue over the last year and it welcomed the announcement.

(BusinessDesk)

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