Farmers who have nitrate problems are going to have to find other ways of remediating the issue after the major fertiliser companies withdrew the DCD option.
Trace DCD - or dicyandiamide - has been found in milk.
Although authorities say it poses no health risk, Fonterra has persuaded Ballance and Ravensdown to withdraw the product.
Fonterra says it is concerned about the issue because it could present "a future trade issue".
About 400 farms are apparently using DCD as a way of meeting Regional Council nitrate target level reductions. Another remediation method will now need to be found.
A Fonterra Shareholders Council spokesperson said it wanted to work with councils to "review the targets".
“We have been assured by New Zealand’s regulatory authority – the Ministry for Primary Industries - that there is no food safety risk. However, DCD residues in agricultural products may present a future trade issue,” said Fonterra spokesperson Todd Muller.
“Although DCD was a promising option for reducing nitrate leaching, it is critical that New Zealand’s trade reputation is preserved. The voluntary suspension is the responsible approach in the absence of any internationally agreed standards for DCD residues in food,” he said.
MPI issued a statement saying "New Zealand’s reputation is based on the high quality of food we produce, so MPI is working across the board with primary producers to manage potential concerns for our markets and consumers."
In December 2012, MPI set up a working group with industry to assess the use of DCD on farm land that might result in residues in food. Today's announcements follows that review.
Greg Campbell, the Ravensdown boss said "As DCD has been used safely around the world for 30 years, there has never been a set of international standards around maximum residue level in food products. Because no standard exists for DCD, no detectable presence is acceptable. And because zero detection of DCD cannot be guaranteed, Ravensdown has taken the responsible, voluntary step to suspend its use while the trade issues are resolved."
Ballance said it had not sold its DCn product since July 2012 and had not promoted its use on pastures since late 2010. This means that only a handful of Ballance customers have recently used the product. As a precautionary measure Ballance will not reintroduce any DCD-based products to the market until the potential international trade issue of milk residues is mitigated, it said.