Fonterra has attempted to play down criticism from green campaigners over its use of a palm-oil product as feed for its New Zealand dairy cows.

Greenpeace has slammed the world's largest dairy exporter for using palm kernel expeller, or PKE, to feed cows.

The environmental pressure group said Fonterra, through a venture with palm oil trader Wilmar, was helping "destroy" rainforests in Indonesia and Malaysia.

"Fonterra [has a] direct link to Wilmar - one of the biggest rainforest destroyers in Indonesia and Malaysia," Greenpeace said.

"Palm grower Wilmar is one of the world's biggest rainforest destroyers and has a relationship with Fonterra through its half owned subsidiary RD1. RD1 has a joint venture with Wilmar to import huge amounts of palm-based animal feed into New Zealand."

Fonterra, however, called for "perspective" and told just-food that grass was "by far and away" the biggest feed source for cows in New Zealand.

"Grass makes up over 90% of all feed used on New Zealand dairy farms," a Fonterra spokesperson said. "PKE remains a very minor source of feed on New Zealand dairy farms - about 1% of the total feedstock this year."

Greenpeace has been vocal on the alleged impact the food industry has on the destruction of the rainforest.

Last week, Brazilian beef giant JBS was forced to defend its record on sourcing cattle and stand by its sustainability efforts amid criticism from Greenpeace campaigners.

Fonterra was quick to point to its credentials in building a sustainable business.

"We don't want anyone to be out there chopping down rainforest, which is why we have strived to procure from sustainable sources and we are very conscious of increasing consumer interest globally in where food and consumer goods are coming from and how they are being produced," the spokesperson said.

The spokesperson insisted that its RD1 venture was following practices to protect the environment.

"Our people at rural merchandiser RD1 who sell PKE have been at pains to make sure they've been getting the best product from a single sustainable source, Wilmar International," the spokesperson said. 

"Before buying products sourced from Wilmar, we visited their operations in Malaysia to review their environmental management practices. The company is a member of RSPO (Roundtable on Sustainable Palm Oil) and they are already well down the track in getting all their mills and plantations certified as sustainable."