Ornua PPI Shows Farmgate Prices are Lagging Behind

The latest Ornua PPI for March equates to 49.1cent per litre (cpl) farmgate milk price. This includes an increased cost of processing of 9.7cpl. When adjusted to include the Ornua Value Payment, the price is equivalent to 51.71cpl.

Commenting on the significant increase in the index compared with last month, the Chairman of IFA’s National Dairy Committee 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 42.5-45.2cpl. “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 50cpl,” he said.