Co-ops urged to pay ‘milk price that reflects market returns’

Processors and co-ops have been called on by the Irish Farmers’ Association (IFA) to pay a “milk price that reflects what the market is returning”.

Making the comments today (Thursday, July 8), IFA National Dairy Committee chairman Stephen Arthur said “time is up for processors on milk price”, pointing to current market indicators.

The dairy chairman highlighted that the Ornua Purchase Price Index (PPI) for June has risen by over three points to 119.9.

This converts to 35.9c/L, including VAT, based on Ornua’s product purchase mix and assumed member processing costs of 7c/L and excluding member margin, a spokesperson for Ornua said yesterday (Wednesday, July 7).

However, when adjusted to include the Ornua Value Payment, the “IFA adjusted PPI” indicates an equivalent farmgate price of 38.11c/L, Arthur claimed.

Farmgate milk prices “continue to lag substantially behind this”, the chairman stressed.

In the past 12 months, the Ornua PPI has only dropped once, with 11 months showing gains in market returns.

Since the start of 2021, the adjusted Ornua PPI has risen from 33.88c/L in January to 38.11c/L in June, Arthur said.

Continuing, Arthur said: “While the PPI continues to return solid milk prices, the processors are reluctant to pass it back to farmers.

“It’s about time the processors reflected what the market is paying,” the IFA dairy chairman concluded.