Ornua spokesperson Jeanne Kelly said the levy was being suspended “in recognition of the on-farm challenges currently experienced by Irish dairy farming families due to the global dairy market downturn”.

The board will reconsider the suspension of the milk levy when the Purchase Price Index (PPI) returns to 103 (30.5c/litre including VAT) for three consecutive months. In February, PPI continued the fall from March 2015 to a record low of 85.5 which equated to a farm gate price of 24.5c/litre assuming processing costs of 6.5c/litre.

The levy is taken at a rate of 0.14c/litre for each litre of milk produced. Through the payment, farmers contribute to the Kerrygold brand and the marketing development of Irish dairy products abroad.

“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,” Kelly said.

The announcement has been welcomed by IFA national dairy committee chair Sean O’Leary. However, he warned of the need for co-ops to continue to hold milk prices.

“While this gesture is important, it does not absolve co-ops of the necessity to continue supporting milk prices, and I urge all to hold their March milk price to avoid making what is already a critical situation on many heavily invested farms much worse,” he said.

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