Milk Price Has to Reflect Rapid Rise in Ornua PPI

IFA Dairy Chairman Stephen Arthur said processors must raise milk prices this month to reflect the full value of the Ornua PPI.

The PPI for November equates to a milk price of 37.2cpl, with an additional 2.9cpl equivalent derived from the Ornua Value Payment. The October milk price ranges between 33cpl and 35.5cpl.

“There is a significant gap between what Ornua is delivering in terms of milk price, and what milk processors are paying out,” he said.

He said the cost of production remains stubbornly high. Twinned with difficult weather conditions and reduced milk supply, farmers remain under significant financial pressure.

Since September, global dairy markets have rebounded significantly, with GDT auctions reporting mainly positive results. The futures markets are signalling strong prices into 2024.

Stephen Arthur also warned that the seasonality bonuses commencing in November do not constitute a rise in base price. “Seasonality bonuses were introduced to encourage out of season milk supply. They are not a prop for base price,” he said.