New Ornua PPI Needs to Be Fully Transparent

IFA National Dairy Chairman Tom Phelan said farmers have always valued the Ornua Purchasing Price Index (PPI) for the transparency it provides in milk pricing.  The onus is on Ornua to ensure that this value and this transparency are continued into the future.

“An important new aspect of the Ornua PPI monthly communication is the Ornua Value Payment, which includes the value from premium, non-commodity products and the monthly trading bonus.  This payment is now being made monthly on a pro-rata basis to all member co-ops and is available to them when determining their farmer milk price,” Mr Phelan said.

“For farmers to correctly appreciate the full value of this payment, it is best expressed in cents per litre, even though Ornua is not expressing it in that fashion.  Therefore, IFA is committed to estimating the full value returned by Ornua to co-ops every month in cents per litre,” he said.

“For July milk, our estimate of this value is 0.99c/l incl VAT, which added to the basic PPI of 29.3c/l incl VAT would equal to a total net return to co-ops – our new IFA Adjusted PPI – of 30.29c/l incl VAT.  This is slightly higher than the old June PPI and confirms the trend from other international indicators,” he concluded.

Related Articles