Overseas dairy customers alarmed

The four-month silence by the government and Fonterra after the discovery of DCD chemical residue in dairy products appears to have been extended to some of the country's independent dairy processors who are now fielding calls from alarmed overseas customers.

One exporter which did not want to be named, said it was unhappy to learn only last Thursday, at the same time as the public, that Fonterra found out about the DCD (dicyandiamide) residue in September, and that the agriculture chemical had subsequently been withdrawn from the market.

Other independents contacted by Fairfax said they had been told to refer calls about DCD to the Dairy Companies Association of New Zealand (DCANZ), of which they are members.

DCANZ was part of a DCD "working group" formed by the Ministry for Primary Industries (MPI) in December after Fonterra informed the ministry in November of its September discovery.

DCANZ chief executive Simon Tucker was not available for comment until this afternoon. Chairman Malcolm Bailey, a Fonterra director, could not be contacted.

Dave Stanley, chief executive of the Dairy Goat Co-operative, a major dairy goat product exporter, said his organisation also did not learn of the DCD discovery until Thursday.

The Waikato-based co-operative had received approaches from overseas customers asking for clarification around food safety issues, he said.

Stanley understood MPI had not contacted his company because the ministry knew that no goat milk suppliers had used the chemical on farmland.

But he said the company would have liked to know about the issue.

DCANZ members include Fonterra Brands, Waikato's Tatua Co-operative Dairy Company, Open Country Dairy, Westland Milk Products, Miraka and Synlait.

Tatua chairman and DCANZ representative Steve Allen said his company did not learn of the DCD investigation until last Thursday, but said Tatua did not have an issue with this.

He said his company and was content to leave the matter in the hands of MPI and DCANZ.

Allen said Tatua made specialised caseinates and anhydrous milk fat products, but did not make milk powders, which seemed to be where DCD residues were found.

He said "90 per cent of things in the industry would not be heard about" because they were Fonterra's business.

Fonterra, the country's biggest company and world's leading dairy exporter, controls just under 90 per cent of the New Zealand industry.

Allen said DCD had been used by "maybe one" Tatua farmer supplier, perhaps once a year.

Fertiliser companies Ravensdown and Ballance, also part of the working group, said on Thursday they had suspended sales of DCD for farmland treatment.

The chemical has been applied by some farmers for seven years to help reduce nitrate leaching into waterways and greenhouse gases.

Fonterra's tests in September were the first ever conducted for DCD on dairy products.

MPI said the residues were at very low levels and DCD was not considered to have any impact on food safety.

About 500 dairy farmers were thought to have used DCD on pastures.

Asked why MPI had not informed other New Zealand dairy industry exporters of the DCD issue earlier, MPI said when the decision was made by fertiliser companies Ravensdown and Ballance to voluntarily suspend sales of DCD treatments in January, the working group started a process of informing affected stakeholders, including dairy companies.

Deputy director general Carol Barnao in a written response said it was important to do a full assessment of the situation and make a measured response, which was why the DCD working group was set up by MPI early in December 2012.