Industry good body has begun consulting with farmers on band of options.
DairyNZ has begun talks with dairy farmers to decide how much should be paid in milksolid levies, which are used to fund the organisation.
The levy is currently set at 3.6 cents per kilogram of milk solids. Of that, 0.8 cents is paid to TBfree NZ (on-paid to OSPRI), leaving 2.8c for DairyNZ.
DairyNZ’s board is floating two options for farmers, which it will be consulting on over the next month: a 4.4c-4.6c/kg MS dubbed the “Maintain” option, and a higher, 4.7c-5c/kg MS levy called the “Accelerate” option.
“It’s never been adjusted in the whole time DairyNZ has existed. It hasn’t changed for 16 years. If it was inflation adjusted it would be 5.2c.
“There’s been no change over all of those years. The world has changed around us in the meantime and so have the challenges – there are more and they are bigger and we really want to set farmers up for the future.”
DairyNZ has offered a price band because it is unsure what the new levy should be and the eventual amount will depend on farmers’ feedback.
DairyNZ has also just had a major restructuring with a new strategy and it wanted to get that bedded in before having the levy consultation, Brown said.
The Maintain option would keep the current research and science programmes, retain some projects such as bobby calves and forages as well as allowing DairyNZ to meet its financial obligations.
“At that rate, if other challenges came along in the next couple of years, we couldn’t do a whole lot of other projects and that’s why we’re testing the 4.7-5c /kg MS, which is the Accelerate option,” Brown said.
“That’s about expanding investment in science and research, farm system extension and trying to keep ahead of the challenges. We can basically do more and quicker under the Accelerate option.”
Board-level conversations around raising the levy began in late 2023.
At 4.4c, it meant another $800 per 100,000kg MS while a higher 5c levy meant an additional $1400, replacing the 3.6c currently being paid by farmers.
The new levy is separate from the six-year milk solids levy vote, which will occur in 2026, when farmers will vote on whether or not to continue to support DairyNZ.
Letters have gone out to every milk solids levy payer. They contain a unique identifier that provides access to a secure online feedback form.
Brown, along with chief executive Campbell Parker, members of the management team and board members, will be holding in-person events across the country and hosting online presentations that will allow farmers to talk to them about the proposal.
Consultation closes on March 2, at which time the board will consider that feedback and make a decision on the levy by May 1.
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