New Zealand's state-owned farming company says it will stop using palm kernel products to feed its animals as it seeks to take better care of the environment.

Landcorp announced Monday that it will stop using the products by mid-2017. Environmentalists have linked growth in the palm oil industry to rainforest destruction in Indonesia.

Landcorp Chief Executive Steven Carden told The Associated Press that consumers worldwide are willing to pay a premium for natural products, including grass-fed meat and dairy.

Farmers typically use imported palm kernel cake as part of a diet for dairy cows, especially during the winter or when natural feed is low. The cake is a byproduct of palm oil production.

Carden said the company will replace palm products with locally grown alternatives like maize silage and chicory.