Is DairyNZs Levy Increase Delivering the Payoff Farmers Were Hoping For

Source: Kapitales Research

Highlights:

• An independent review estimates DairyNZ’s levy funding delivered around $3 billion in value to the sector over the past five years.
• The levy was raised to 4.5c/kgMS this year, the first increase in 16 years, following 1,500 farmer submissions during consultation.
• Funding under the Commodity Levies (Milksolids) Order supports research, innovation and on-farm productivity, with returns seen across environmental, biosecurity and workforce initiatives.

New Analysis Shows Billions in Sector Gains

DairyNZ’s levy funding has delivered significant returns for New Zealand’s dairy sector, according to an independent review that estimates the organisation generated roughly $3 billion in value over the past five years. The findings underscore the impact of industry-wide investments at a time when farmers face mounting financial and regulatory pressures. At the time of writing, DairyNZ’s recently updated levy rate — now 4.5 cents per kilogram of milksolids (kgMS) — is beginning to reshape long-term planning and farmer engagement across the country.

First Levy Increase in 16 Years

Earlier this year, DairyNZ approved its first levy rise since 2009, lifting the charge from 3.6c/kgMS to 4.5c/kgMS. The decision followed an extensive consultation process that drew 1,500 formal submissions from farmers, highlighting both strong interest and differing views on what the next phase of industry investment should prioritise. The levy is governed under the Commodity Levies (Milksolids) Order, which requires a farmer vote every six years. The most recent vote, held in 2020, reaffirmed broad support for the levy structure, ensuring that all dairy farmers contribute based on each kilogram of milksolids produced.

Where the Money Goes

Levy funding supports a range of initiatives including environmental research, herd and pasture innovation, workforce development, biosecurity readiness and climate adaptation. The independent assessment found that these programmes collectively returned substantial economic and productivity gains to the sector.

A Strategic Reset for the Future

With rising compliance costs, climate expectations and global market volatility, industry leaders say the levy increase positions DairyNZ to better support farmers through the next decade. The new funding model is expected to strengthen research capacity and deliver more targeted tools for on-farm performance.

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