Ornua suspends dairy farmer levy in light of sector difficulties

Ornua has suspended its dairy farmer levy, in recognition of the on-farm challenges currently experienced by Irish dairy farming families, due to the global dairy market downturn.

In a statement today, it says that the Ornua Board is suspending the monthly Ornua milk levy from May 1, 2016.

Through the milk levy, Irish dairy farmers directly contribute to the Kerrygold brand and the marketing development of Irish dairy products in over 110 countries.

Notwithstanding the levy’s important contribution to Ornua, it is hoped that the suspension will go some way towards supporting farming families at this difficult time. In 2016, it is estimated that the suspension will return nearly €6m to Irish dairy farmers.

It said that the Board will reconsider the suspension of the milk levy when the Ornua Purchase Price Index returns to 103 (30.5c/L incl. VAT) for three consecutive months.

In its most recent Purchase Price Index (PPI), the monthly indicator of market returns on dairy products sold by Ornua, it continued its downward trend in February falling slightly to stand at 85.4.

The January the PPI had dropped to 85.7, which is suggestive of a milk return of around 25-26c/L.

It’s a record low for the Index, which had been in place since early 2011, and the current value suggests a milk price of around 7c/litre below the average for the five-year period.

The February return is down some 13% on the same month last year and a massive 36% on returns posted in February 2014.