Fonterra has now acknowledged that fertilisers containing the heavy metal, and known carcinogen, cadmium, are causing increasing contamination of New Zealand soils.
The problem was raised at a discussion on the future of the dairy industry at the Annual Resource Management Law Association Conference in New Plymouth.
Massey University scientist Mike Joy told the conference that there were serious health concerns over farmers' heavy use of phosphate fertiliser, resulting in extremely high cadmium levels.
He says cadmium is a known carcinogen and 30 to 40 tonnes of it are being added every year to New Zealand soils.
Fonterra's general manager of policy and advocacy Carolyn Mortland acknowledged the problem, saying cadmium is a worry for the long-term productive capacity of the land.
But she says it is not a food safety issue, and there are no traces in milk.