An importer of palm kernel extract says demand for the dairy feed supplement is lifting again as the price comes down.
A drought in the Untied States has sent world grain prices climbing and pushed up international demand and prices for palm kernel extract, a by-product of the palm oil extraction process.
Grain growers' representative Ian Mackenzie says palm kernel is generally regarded as a cheap supplement for grass.
He says growers were hoping the higher price might encourage more dairy farmers to grow more grass and if a supplement is needed, to consider locally produced grain.
However, a director of one the main importers and distributors of palm kernel extract, Stephen Swap of J. Swap Contractors, says the price is coming down again.
Mr Swap says the demand from dairy farmers is strong.