New feed crisis piles on the agony

Already hit by drought conditions and a poor season for haylage and silage, many Northland farmers could be facing a further feed shortage. Photo / Duncan Brown

Already hit by drought conditions and a poor season for haylage and silage, many Northland farmers could be facing a further feed shortage with palm kernel expeller (PKE) in high demand - but short supply.

Farm supply companies RD1 and Ravensdown said they only have enough PKE for already contracted farmers, but there is little available on the spot market and farmers who do not have contracts for the feed need to get in soon or miss out.

Palm kernel is used on dairy farms as a supplement for milking cows and is imported from Southeast Asia, with the greatest volumes coming from Malaysia and Indonesia.

As PKE is a by-product, a decrease in demand for the palm oil for consumer products results in a shortage of kernel extract.

Northland was declared a drought zone last Tuesday and Northland Rural Support Trust spokeswoman Julie Jonker said lack of available feed was another hit for the region's farmers, who were finding the situation desperate.

Ms Jonker said that, as well as a shortage of PKE, last season's haylage and silage production was low, leaving many farmers with few options but to dry out their beasts.

She said December and January were not too bad and with rain predicted for February many Northland farmers did not take up contracts for PKE.

But with the rain not coming some were caught short.

Ms Jonker said many farmers were relying on hay, but this was not good for milking and there was not a lot to go around.

She said that during the 2010 drought - the worst in Northland for 60 years - farmers from Waikato trucked up spare hay bales, but with that region also facing drought conditions Northland's farmers could not rely on them this time.

"Things are pretty desperate for farmers up here and it seems to be hit after hit [with the feed shortage]," she said.

An RD1 spokeswoman said its PKE stocks were low and there was none available on the spot market other than in Tauranga, where a ship unloaded a cargo of PKE last week - although that was for already contracted farmers.

"All contracted tonnage is guaranteed and will be delivered as per contract agreement," the spokeswoman said.

"We advise there is still some spot market tonnage available to Northland farmers out of Tauranga but this is not expected to last long," the spokeswoman said.

A spokesman for Ravensdown said the PKE situation was changing daily but all its contracted customers were guaranteed their delivery. The company had some PKE on its spot market, but this was going fast and farmers who needed it should get some contracted soon or risk missing out.

As of Friday, the three-month contract price for PKE was $330 a tonne.
Meanwhile, the Inland Revenue Department has announced help for drought-hit Northland farmers.

Those whose current or future income will be significantly affected by the drought will be able to make late deposits for the 2012 income year to April 30. The concession means farmers can better plan their financial response to the conditions.