Stance Agriculture has released a statement in the wake of discussions over the feeding of copra meal to horses.
It says copra meal - the generic term for the dried white flesh of coconut after the oil has been removed - is produced in many countries.
"The processing methods and quality of the copra meal produced vary considerably," the company said.
"The copra meal produced in Asia is smoke dried, and often contains high levels of aflatoxin B1 (above 20ppb).
"The Asian copra meal has been imported into New Zealand and fed to dairy cows, and Aflatoxin B1 has appeared in the milk."
The levels sparked discussions between the Agriculture Ministry and dairy giant Fonterra, which resulted in the company ordering its farmers to reduce the amount of copra given to milking cows in order to keep aflatoxin levels to acceptable levels.
Stance says that Asian copra meal with more than 20ppb of aflatoxins is banned for use in Europe.
"Aflatoxin is found in all feeds - including peanuts - but high levels of aflatoxins are associated with poor quality feedstuffs and poor quality-assurance."
Stance Agriculture says the the major producers are Indonesia and the Philippines, with comparatively smaller amounts from the South Pacific Islands such as Papua New Guinea.
The copra meal originally introduced into Australia and New Zealand in the 1980s was supplied from the coconut oil processing mill in Rabaul, in Papua New Guinea.
"The copra meal from Rabaul is consistently one of the highest quality copra meals available, and with levels of aflatoxin below the Level of Reporting (LOR), which is less than 5ppb.
The use of copra meal for horses and cattle in Australia and New Zealand was based on this meal, and was sold under the labels Cool Fuel and CopraGro (recently rebranded by the firm to CoolStance® and CopraStance®) The quality and aflatoxin levels were, and are, regularly checked, it said. The company says it continue to source its copra from Rabaul.
Stance Agriculture said the market for copra meal has grown, which has attracted other suppliers, and with the introduction of bulk shipments of palm kernel expellor (PKE) from Asia into the New Zealand and Australian dairy industry, traders began importing the Asian and other copra meal.
"The Asian copra meal is much cheaper, and has replaced the copra meal from Rabaul, Papua New Guinea, based on price."
"As with all feedstuffs, not all copra meal is of the same quality, and poor harvesting, storage and processing can produce low quality feeds that are prone to infection with micro-organisms that produce the aflatoxins.
The presence of aflatoxins reflects poor quality control and poor quality products, Stance said. It said that the copra meal from Indonesia and the Philippines was traditionally traded into the European Community, but its use in that market has been restricted because of high Aflatoxin levels.
Copra meal is considered an oil-rich feed. The key benefit for horses is that it contains very little starch, and so does not cause fizzy behaviour, tying up, colic or laminitis.
The company said it appreciated horse owners' concerns over the quality of the copra meal you feed to your horses, saying it took the quality of its feeds seriously. It said it welcomed calls or inquiries to Freecall 1800 782 623 or email@example.com.