Farmers Frustrated at a Potential Loss of Transparency from PPI Review

Ornua should continue to publish PPI in the old and new format

IFA President Tim Cullinan said that farmers are disappointed with the decision by Ornua to amend its Purchasing Price Index (PPI).

“In particular farmers can’t understand the increased allocation for processing costs, despite the investments made in modern processing facilities,” he said.

“With over 50% more milk going through more modern plants, farmers cannot understand how costs are increasing when increased throughput should reduce them,” he said.

IFA has consistently communicated to Ornua, at the board table and at the top-level the serious concerns of farmers who feared the review would take away from the transparency of the PPI.

IFA National Dairy Chairman Tom Phelan stated, “It would also have made more sense to farmers for this decision to be considered by the new Ornua board due to come into Office later this year. The onus is now firmly on Ornua to prove to farmers that this new format will continue to serve them as well as the previous version”.

“IFA and farmers value the contribution to market and price transparency that the Ornua PPI has made over the years. Farmers fear that today’s changes may undermine the transparency of the index and its relevance to their milk price. Ornua must now come out and explain these changes to farmers, and prove to their satisfaction that it will continue to serve farmers well,” Mr Phelan said.

“In the interim, and in the interest of transparency, Ornua should continue to publish the index in the old format alongside the proposed new format,” he concluded.