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.
IFA National Dairy Chairman Tom Phelan today (Monday) said the milk price increases of 1 and 1.48c/l respectively implemented by Lakeland and Glanbia meant farmers would receive at least 30c/l for their June supplies (30c/l and 30.1c/l incl VAT respectively).
This increase, he said, was the minimum farmers needed for their June milk in what is a very challenging year of volatile markets and rising costs, and he urged all other co-ops to follow the Lakeland and Glanbia example.
IFA National Dairy Committee Chairman Tom Phelan said the whopping 8.3% increase in today’s GDT auction result is the clearest indicator yet than markets are recovering as global markets reopen and food services demand recovers post lockdown.
Speaking after a meeting of the National Dairy Management Committee on Friday last, IFA President Tim Cullinan said reports that Ornua were reviewing aspects of the Purchasing Price Index (PPI) had left farmers very concerned.
Responding to the dairy results in the 2019 National Farm Survey (NFS), IFA National Dairy Chairman Tom Phelan said the results, which suggested a modest dairy farm family income increase, were less positive than one might think, and needed to be examined closely.