The latest Ornua Purchase Price Index (PPI) shows that farmgate prices are lagging behind, according to the Irish Farmers’ Association (IFA).
Ornua announced today (Wednesday, April 6) that its PPI had risen by 12 points for March bringing it to 164.3, which equates to 49.1c/L, including VAT. This figure is up from 152.3 in the previous month, which equated to 45.8c/L, including VAT.
This includes an increased cost of processing of 9.7c/L, according to Ornua.
When adjusted to include the Ornua value payment, the price becomes equivalent to 51.71c/L, the IFA said.
Commenting on the significant increase in the index compared to last month, IFA national dairy committee chair, Stephen Arthur said that dairy farmer costs of production were also increasing significantly.
“In a normal year, a milk price in the forties would indicate a strong year for dairy farmers, but this year isn’t normal.
“Like the processors, our costs are also spiralling. It’s essential that we get the milk price the market is returning, and we are relying on our processors to deliver this,” he said.
In February, farmgate prices ranged from 42.5-45.2c/L.
“Based on what the market is returning, a substantial increase in milk price is justified for March milk, which reflects the current Ornua PPI of almost 50c/L,” he said.
ICMSA calls for 50c/L
Meanwhile, the Irish Creamery Milk Suppliers Association (ICMSA) is calling for a base milk price of 50c/L to be paid for March milk supplies.
Speaking in advance of co-ops’ announcements of March milk prices, ICMSA dairy chair, Noel Murphy, has called on all co-ops and milk purchasers to bring base milk price up to 50c/L.
He said that the price is fully justified by market returns, and is also required to deal with surging input costs.
He said that 2022 had, so far, seen unprecedented rises in all commodities, and milk products on wholesale markets were no different.