The New Zealand milking herd is primarily pasture–fed, meaning the main feed supply is highly susceptible to weather conditions. Poor weather and declining milk prices starting nearly a decade ago sparked the need for supplementation. Because the country has significant restrictions to ingredients produced with biotechnology, traders introduced palm kernel expeller (PKE) to the New Zealand market for use during months with lower grass production, making it the go-to feed supplement.
In 2018, New Zealand imported more than 2 million metric tons of PKE, primarily from Indonesia. However, because as PKE inclusion rates increase, milk fat quality can decrease, the country’s largest dairy cooperative began considering discounts for lower-quality milk. The U.S. Grains Council saw this as an opening that could lead to decreased demand for PKE and the need for alternative feed ingredients like U.S. DDGS and corn gluten feed.
The Council met with New Zealand’s largest retailers, corporate integrators, feed millers and feed associations to evaluate potential in this market. The group learned about the local dairy market’s needs and how U.S. co-products could meet them. Members distributed nutritional materials to retailers as additional tools to promote high-inclusion rates of DDGS and corn gluten feed rations.
Proceeding the Council’s engagement in June 2019, 50,000 MT of DDGS were contracted (June and July). By contrast, more 180,000 MT were contracted from July to December of 2019. The Council plans to continue engagement in the dairy sector through the New Zealand Feed Millers Association and expand its poultry marketing efforts to include U.S. grain sorghum.
Ultimately, as a direct result of this engagement, the New Zealand dairy industry imported 208,571 MT of DDGS and 126,597 MT U.S. corn in 2019 for a total value of $73 million, compared to $57 million of U.S. coarse grains in 2018. This meant an added value of $16 million based on a Council investment of $17,000, for a total ROI of $941 for every $1 of Market Access Program (MAP) funds invested.
About The U.S. Grains Council
The U.S. Grains Council develops export markets for U.S. barley, corn, sorghum and related products including distiller’s dried grains with solubles (DDGS) and ethanol. With full-time presence in 28 locations, the Council operates programs in more than 50 countries and the European Union. The Council believes exports are vital to global economic development and to U.S. agriculture’s profitability. Detailed information about the Council and its programs is online at www.grains.org.