Calls for milk price boost following Ornua PPI increase

Calls have been made for a milk price boost following the recent increase in Ornua’s Purchase Price Index (PPI).

The chairperson of the Irish Creamery Milk Suppliers’ Association’s (ICMSA’s) Dairy Committee has insisted that farmers must receive a milk price that is “at least” on par with the Ornua PPI – which equates to approximately 33.5c/L.

Quain said that, for several months, the ICMSA has highlighted what he described as the “very significant and inexplicable” difference between the price the co-ops were getting from Ornua and the price the co-ops, in turn, were paying their farmer-suppliers.

Commenting on the matter, he said: “The ICMSA has consistently pointed out that, certainly since March/April, the Ornua PPI indicated a higher price than the co-ops were paying their farmer-suppliers.

The latest PPI – which has climbed from July’s 107.3 to August’s 111.1 – has again set out a situation where we know that the co-ops have received 33.5c/L – but Lakelands, for instance, has left its price unchanged at 32.78c/L.

“Farmers are entitled to ask what’s going on here? How is it possible that a processor can just pocket the increase it’s receiving from Ornua and not pass that better price back to its own suppliers?”

Quain believes this is particularly frustrating given the “cash flow crisis” that’s affecting all farmers at the moment.

That specific co-ops could be 0.5c/L or 1c/L below the Ornua price would be a matter for adverse comment in normal times, but in the circumstances we have now – in the environment we have now where every fraction of a cent counts – it’s incredibly disappointing.

“Farmers have every right to insist that they are paid at least what their co-op was paid and that is the absolute minimum that’s going to be acceptable,” Quain concluded.

Milk price announcement

Earlier this week, Lakeland Dairies revealed that it decided to hold its price for milk produced last month; it will pay its suppliers 32.78c/L including VAT for the second month in a row.

While milk powder prices have improved, butter prices have weakened “significantly” in the past month, the processor outlined.

It also stated that it will “continue to pay the highest possible milk price in-line with market conditions”.

Other processors are expected to announce their respective milk prices for August supplies in the coming days and weeks.