All farmers who supply milk to a dairy company pay a levy. This includes sharemilkers and dairy farm leaseholders. The milksolids levy is collected under the terms of the Commodity Levies (Milksolids) Order 2020, which caps the levy at a maximum of 5c/kgMS.
The levy is currently 3.6c/kgMS and has remained at that level since 2007. Of the 3.6 cents collected by DairyNZ, 0.8 cents ($14.5M) is collected on behalf of Ospri and on-paid to them for the TB free programme, meaning DairyNZ retains approximately 2.8 cents per annum.
The DairyNZ Board reviews the rate every year against our investment commitments. Dairy farmers are consulted on any proposed changes to the levy and any decision to change the levy will be communicated as soon as is practicable after the decision..
All dairy farmers who pay a levy on milksolids can vote on whether to continue the levy. The next levy vote will be in 2026. Further information on the upcoming vote will be shared well in advance.
Grounded in scientific excellence and research, the programmes funded by your levy help create practical farm-systems solutions and advocate for farmers with central and regional government.
How is the milksolids levy calculated?
The levy is calculated on the quantity of milksolids supplied to the dairy company. For example, here’s how the levy is calculated for an average farm milking 448 cows.
(448 cows x 400 MS per cow) x (3.6 cents annual levy / 100) = $6,451.20 (+GST) per year
How much is raised through the levy each year?
The total amount raised through the levy each year fluctuates as it is dependent on the quantity of milksolids supplied to dairy companies. For the year ended 31 May 2024 DairyNZ collected $67.8 million from New Zealand dairy farmers.
$14.5 million of the total levy is collected on behalf of TBfree and passed directly to them for the bovine tuberculosis programme. The balance (approximately $53M) is invested by DairyNZ in programmes and operational costs to deliver on our strategy.
Who decides how the levy money is invested?
Our board, made up of five farmer-elected and three independent directors, approves how DairyNZ invests the levy money each year. The annual plan is informed and aligned to the DairyNZ Strategy.
How are investments monitored?
DairyNZ is subject to an annual external financial audit of its financial statements. KPMG’s audit report is included in the annual report. The Board are also responsible for governing Management’s achievement and performance against the strategy.
What was the last DairyNZ levy vote result?
During 2020 all dairy farmers who paid a levy on milksolids had the opportunity to vote on whether a levy on milksolids is continued.
The 2020 levy results:
We will continue to deliver the best research and on-farm tools to support and work with you on local farmer-led projects. Progressing a positive future for New Zealand dairy farming is the core purpose of the DairyNZ Board and staff and we are looking forward to continuing our work.